Planning for a baby can be a pretty frightening and exciting thing. After all, having a baby is something that will change your life forever. Although you probably can’t wait to have kids of your own, you do want to ensure that you’re adequately prepared so that you can provide your child with the love and care they deserve. So if you’re unsure where to even begin, don’t worry — we’ve got you covered. Below, you’ll find the ultimate financial checklist to follow while planning for a baby.
Clear your debts
The most important thing to do while planning for a baby is to clear your debts. Caring for another’s life can be pretty costly, and having debts will only serve to bring you more stress than necessary. This is especially true if you have many debts. If that’s the case, and you don’t know how to best go about paying them off, then we suggest paying off the debt that has the highest interest rate first. This method of repayment is called the avalanche method and it will make it so that you’ll be paying less in the long run. And when it comes to caring for a child, every penny counts!
Go over your employer’s benefits with your partner
Another important thing to take into consideration is your employer’s benefits. Your employer’s benefits will include things like how much maternity or parental leave you’ll be able to get, and whether or not you can transfer some of your vacation or sick days to your parental leave. It also includes certain health benefits that could be worth knowing about before you have your baby. Parental or maternity leave can also affect your pension, so be sure to review that with your employer. If your normal weekly earnings are reduced by more than 40%, then you should request a record of employment from your employer so that you can apply for Employment Insurance (EI). Finally, you should come to an agreement with your partner about how you’ll split up your parental leave.
Look into childcare costs
One of the biggest costs when it comes to caring for a child is the cost of childcare. There are different types of daycares offered in Quebec — subsidized or private non-subsidized daycares. Subsidized daycares cost parents about 8.70$ per day per child. They’re non-profit and the board of directors is usually made up mostly of parents whose children attend the daycare.
Private non-subsidized daycares’ rates can vary between 30$-60$ per day per child. Although these rates are much higher, according to the Quebec Ministry of Finances, “parents are entitled to a refundable tax credit for childcare expenses. This credit corresponds to a percentage that varies from 78% to 67% of eligible childcare expenses paid, depending on family income”.
Keep in mind that you should make plans for childcare as soon as you can. Subsidized daycares fill up really quickly, and a lot of parents need to reserve their spots almost nine months in advance. That means that if the daycare only accepts children of 6 weeks or older, then you should start looking once you’re six weeks pregnant. Otherwise, you might just find yourself on a waiting list.
Draw up a budget and make room for savings
Possibly the most important thing to do when planning for a baby is to look into all of the costs of caring for one, and drawing up a budget before they’re born. Your budget should include things like baby clothing, a nursery, a stroller, a high chair, a car seat, baby toys and books, baby food, equipment for breast-feeding, maternity clothes and daycare/babysitting costs. You should also remember a lot of these things will need to be refreshed on a regular basis, since children grow very fast. You should also leave room in your budget for your child’s future education costs.
Caring for children is the biggest responsibility anyone can have. Not only are you bringing a life into this world, but you’re also going to be changing your own life. Because of that, you want to make sure to planned accordingly. If you’re having trouble fulfilling all of the requirements on your financial checklist, Allevia’s online budgeting tool can certainly be of help. It will analyze your personal situation and come up with the best plan of action so that you can meet your financial goals and have the life you’ve always dreamed of.
