- Reduce, re-use, recycle. Chances are your first child was born into an embarrassment of baby-gear riches, as friends and relatives showered you with too-cute-to-resist gifts. Free up some cash by selling what you definitely don’t need; then organize the items you do plan to use with the new baby (sort sleepers and onesies by age; resurrect receiving blankets for swaddling, bring out the burp cloths, etc.). Then you’ll be able to identify if there are any items you still need and source those out as economically as possible. For instance, if baby No. 1 is still in the crib and you feel she isn’t ready to graduate to a big-kid bed, you might borrow cousin Amanda’s crib or check out gently-used options on Craigslist. Just be sure that any used items meet current safety standards.
- Curb your cash flow. A common financial mistake is waiting until your new baby arrives to trim spending. If you’ve been a two-income family, remember, unless your employer generously tops up government benefits, you’re about to face a year or so with substantially less money coming in (see Divide and conquer, for tips on that front). So start living on your future, lower income now and sock away the spare cash in case of emergencies (a leaky roof won’t wait till you’re back at work!).
- Divide and conquer. If you and your partner both qualify for parental leave top-up payments from your employers, it probably makes sense for you to divvy up the year at home with baby. Say mom gets 15 weeks of salary top-up; after those 15 weeks are over, she’s back to the bare-bones government benefits, which max out at $447 per week, before income tax. Unless dad’s salary is significantly higher than mom’s, you’ll probably pull in more cash overall if she goes back to work for baby’s final weeks at home, while dad claims his share of government benefits plus the full amount of top-up his employer offers.
- Take a second look at your daycare decision. Can you afford to keep your first-born in daycare while you’re on leave? Do you even want to? Consider that, especially in big cities, taking your child out of care for a year could mean your family goes back to the end of the waiting list. Now’s the time to decide how you’re going to handle child care after your next leave. Can you afford to have two kids with your current care provider? If not, brainstorm other alternatives with your partner; for example, would it make sense for one of you to stay home? Our online calculator can help you decide. Find out about lower-cost, reliable care from friends or neighbours, and investigate those options as soon as you can.
- Dial back your lifestyle. Simpler is cheaper, so see if there are ways you can scale back. If you have two vehicles, could you live with just one? Suddenly, you’ve saved more than $3,000 a year in insurance, fuel and maintenance. (Need help? Find tips for ditching your second car.) Do you have a designer handbag addiction? Put it on hiatus, and feed your need for new and different by swapping with friends. Look at your financial statements: Are bad habits (paying service charges, withdrawing money from ATMs that aren’t operated by your own bank, carrying a balance on your credit card) costing you unnecessary bank fees and interest payments? If so, it’s time to pull up your socks.
These changes may seem difficult at first, but remember most behavioural experts say it takes at least three weeks to form a new habit, so stick with it. You’ll be much richer in the long run.
A few ideas for making life less expensive:
- Instead of meeting friends for dinner at a restaurant, have a potluck at your place or theirs.
- Switch to no-name packaged foods and cleaning products, at least some of the time. And stick mostly to the perimeter of the grocery store when you’re food shopping — that’ll help you avoid high-priced processed foods.
- Buy in bulk when it’s a good deal, and cook bulk meals to freeze; this will reduce the temptation to order takeout or rely on pricey frozen dinners.
- Keep your maternity clothing purchases to a minimum. Yes, you still need to dress yourself, but no one but you will remember if you wear the same skirt twice this week. And, once the baby’s born, you may never wear it again!
FILED UNDER: Bringing baby home Family finance New baby New mom
