Here are a few tips on how to find a balance and better plan for your daily needs.
Money can quickly become a source of stress within a family. Here are a few tips on how to find a balance and better plan for your daily needs.
A supper at a restaurant here, a night at the movies there… Amélie and Simon always liked to treat themselves and enjoy life without worrying too much about money. They were able to pay their rent and their bills each month, even if they were a little late sometimes. It was a delicate balance, but they managed.
When Amélie got pregnant, she and Simon were very excited about having a child. They started shopping for furniture and baby items. Shortly after, the bank called to say that their rent cheque had bounced. Fortunately, Simon’s parents were able to lend them the money they needed. They then decided to try to cut down on expenses a bit, without realizing that their financial situation was showing signs of debt.
About four weeks before her due date, Amélie stopped working to take care of herself and finalize preparations. Imagine her surprise when she saw her new paycheque. Instead of $577 per week, she was now receiving only $317. She hadn’t realized her income would drop so drastically during her maternity leave!
Calculating your income during parental leave
The basic formula to calculate benefits is usually 55% of your average taxable weekly earnings up to a maximum of $911. This means that the most you can receive is $501 per week. If your net family income does not exceed $25,921 and you receive the Canada Child Tax Benefit, you are also entitled to the Employment Insurance Family Supplement, which could increase your benefits to 80% of your average taxable earnings.
In its French publication Un bébé à bas prix… pour parents avertis (A baby at low cost… for informed parents), the Montreal East ACEF (Association coopérative d’économie familiale) family finance cooperative calculates that it will cost at least $1,500 to prepare for a new baby if you buy everything new. To that amount, you need to add cloth diapers ($300) or disposable diapers ($720 per year), baby formula and bottles ($120/month minimum) if required, toys, clothes, and hygiene and health products.
Some municipalities subsidize the purchase of cloth diapers. Make inquiries!
The Montreal East ACEF encourages parents to use their support network (family, colleagues, organizations) and to go to bazaars and thrift shops to get everything they need. Most baby items can be borrowed from friends or relatives, or bought second-hand. Make sure, however, that everything you buy second-hand meets current standards.
Bartering still exists!
Do you have sewing or carpentry skills? Well, you can exchange them for other services. Dotted across Quebec are Local Exchange Trading Systems (LETS), which group together people wishing to exchange skills, know-how and products with other members in their LETS. More simply, why not offer to babysit your friends’ children in exchange for them babysitting yours when you need a sitter.
Key signs that you may be in debt:
paying regular bills after their due dates
writing cheques that bounce
making minimum payments on another credit card
getting calls from collection agencies
borrowing money from friends or family
having services interrupted (telephone, electricity, Internet, etc.)
cutting down on daily expenses (e.g.: activities, clothes and food)
sometimes needing to find a second job or to work more hours
Tips to make it through your parental leave
As soon as you know you’re pregnant, start putting aside some money at each pay to build an emergency fund.
You can also cut a few unnecessary expenses and put this money in a higher interest account to save for your parental leave.
Know your environment and the resources available to you to help you save (family assistance, community organizations, free or low-cost services, thrift shops and so on).
Adjust your budget to prepare for a lower income due to preventive withdrawal or parental leave.