A couple smiles and cuddles their newborn and wonders how to financially plan for their baby's future.

How to Financially Plan for a Baby

Learning how to financially plan for a baby is a tough concept when you haven’t had one yet. Imagine you are having a baby and it’s due in one month. How do you feel? Nervous? Probably. Excited? Likely. Tired? Definitely.

Consider the following:

  • How prepared are you for the costs of a baby?
  • Do you have a baby budget?
  • Have you checked what employment insurance options are available?

Presumably you’ve sorted out maternity leave. Now let’s skip forward 17 years. Your baby is all grown up and thinking about post-secondary education. How do you feel now? A little sad perhaps. And what about their university or college options? Did you set up an RESP? Chances are, if you started off your parenting journey with a solid financial plan, that planning and organisation will carry you through to your child’s later years.

Having a baby can be the most amazing and scary moment of your life. The beauty of bringing a new human into the world is impossible to put into words. However, it also means a lot more responsibility. Financially preparing for your baby and setting some goals can help to make the experience more wonderful than it is worrisome.

So, Money Mentors is here to help. Our parents on staff have been in your shoes and have shared five steps you can take that will help you financially prepare for a baby.

  1. Make a baby budget
  2. Learning how to budget for a baby is the first step for a reason. Budgeting is the most important step in any financial planning.

    Here’s what our experienced team of parents have to say:

    “You may want to get a head start on saving up to purchase essential baby items. If this is your first baby, you will want to make a list of baby items that you will need for the first few months and year and then decide if you want to buy brand new or second hand. You might want to start a baby registry at a store, or someone might organise a baby shower and you may receive some items as baby shower gifts. For expenses, there will be one-time items to buy (examples: crib or bassinet) and recurring monthly expenses (examples: diapers and formula) and you may decide to purchase some of these items in advance or incorporate these new expenses into your regular household budget when the baby arrives. If you need a refresher on creating a budget, try our free Budget Boot Camp online course

    Need some help with your baby budget? We’ve got you covered. Click the image below to download your very own baby expenses checklist. And if you need some inspiration, here is one we filled out with some examples.

     

    A button graphic for a baby budget resource.

  3. Check if you can apply for maternity leave in Alberta
  4. Find out if you can apply for maternity or parental leave benefits. When you are expecting a baby, it’s important to get all the help you can – whether that’s from friends, family, or the government. Afterall, you’ve paid your EI and that’s what it’s there for.

    From the mouths of babes’ parents (aka our team):

    “Decide financially whether you should take the 12-month standard leave or 18-month extended leave and what makes most sense for your family and for your career. It is also recommended to calculate ahead of time to ensure that you will reach the mandatory 600 insurable hours to qualify for the maternity and parental leave benefits and decide when you want to start your leave. Check with your employer to review your HR leave policy and inquire if they have a workplace parental leave top-up plan. Visit the Government of Canada’s website to learn more about the Employment Insurance (EI) maternity and parental benefits programs and updates about these program requirements.”

    We have prepared a helpful cheat sheet for you to download that sets out the benefits and tax-credits available to you in the province of Alberta. Click the image below to download.

     

    A button for a downloadable baby budget resource.

  5. Research child care options and the Alberta daycare subsidy
  6. Let’s face it, with the current cost-of-living crisis, the amount of people that can afford to stay home with their kids is diminishing fast. Having a good understanding of your future child care options will help you budget for the future and get a better understanding of how you will return to work.

    Effective January 2022, the Alberta Government vowed to make child care more affordable with a new federal-provincial child care agreement and is offering the Alberta daycare subsidy. As well as expanding the current subsidies, they have provided grants to child care providers in an attempt to lower fees and make child care more affordable.

    When it comes to applying for the child care subsidy, there are various criteria to be aware of. Find more information on the child care subsidy on the Alberta Government website.

  7. Conduct a financial check-up
  8. It’s not only health check-ups that are important around the time of having a baby, you also should be doing financial check-ups. We’ve identified the importance of doing a financial check-up and have an in-depth blog post you can check out for more tips and best practices on assessing your financial health.

  9. Pay off outstanding debts if you can
  10. We’ve left one of the hardest steps to the end. We know paying off debts is easier said than done, but that’s what we’re here for. Luckily, when you are financially preparing for a baby in Alberta, Canada, there is lots of help. However, as with many things, knowing who to ask for help is a big part of the puzzle. The same applies when it comes to paying off your debts. Search Google for “debt help” and you’ll see a number of advertisements from companies promising their own methods for helping you with your debt. What makes Money Mentors a little different is that we’re a non-profit. We provide unbiased credit counselling to all Albertans, no matter what the situation. So, if this final step sounds like the toughest of them all, then get in touch and let’s come up with a plan together.

Here are some final tips from our team:

A happy and financially healthy baby waves goodbye.

 

  • Research baby companies that might be giving away free baby samples (formula, diapers, etc.) such as Canadian Free Stuff
  • Research new baby/parent support groups in the community
  • Look into starting up an RESP account (registered education savings plan)
  • Find some time to take extra care of yourself (resting up, asking for help, meal planning to save time and money, and try to spend some time doing your favourite activities/hobbies – before and after the baby arrives).
  • As your family grows, keep in mind these 10 {Fun & Easy} Money Tips for Families to stay on budget throughout the years.

Thanks for reading. If you have any questions at all, please get in touch.

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