Baby on the way… how much will it cost?
The birth of a child is one of life’s miracles, but it may also be financially stressful. Here are a few tips to ease the financial pressure.
How much money will you get on parental leave?
When you’re on parental leave, your family income drops because you and your spouse will only get a percentage of your usual income. That’s why it’s important to calculate how much money will be coming in so you can plan accordingly.
Even though you’re making less, you’ll still have to pay income taxes and you’ll want to put some money in the bank.
Families in Quebec
The Quebec Parental Insurance Plan (QPIP) is responsible for paying maternity and paternity leaves.
There are two plans, Basic and Special. The Basic Plan allows you to receive up to 70% of your weekly income, whereas the Special Plan is up to 75%.
If you’re having trouble calculating the amount, a benefit calculator simulator is available.
Families in other provinces
The employment insurance plan is responsible for maternity and paternity benefits, representing 55% of your salary.
And what if your employer pays you an additional amount?
Some employers pay benefits to top up the benefits paid by the RQAP or employment insurance.
Ask your employer if they have such a program, if you are eligible and how much you can expect to get.
A financial break is always welcome! As a parent, you are eligible for certain tax credits, benefits or deductions, courtesy of the federal and provincial governments.
- Canada child benefit
- Goods and services tax/Harmonized sales tax (GST/HST) credit
- Child disability benefit
- Working income tax benefit
- Child care expenses deduction
Provincial benefits vary from one province to the next.
And how much does a new baby cost exactly?
When it comes to spending on a newborn, the sky’s the limit. However, most studies indicate that it can cost as much as $10,000 before the age of one.
To get a better idea, check out the First-Year Baby Costs Calculator.
How do you control your expenses?
- Separate what’s essential from what’s not. During the first year, babies don’t need clothes for every occasion and their room decoration doesn’t really matter!
- Ask for practical gifts like diapers. Not very exciting but certainly essential!
- Buy secondhand clothes or get hand-me-downs from friends and family.
- Breastfeeding is the cost-effective alternative to infant formula.
- Make homemade purées: tastier and a lot cheaper.
When in comes to safety, however, there are some things you can’t afford to cheap on:
- Car seats
- Safety gates
- Baby carriers
- Change tables
Expect to have new financial needs
A new baby will affect your: