Baby-proof Your Bank Balance

There’s nothing quite like that heady moment when you find out you’re going to become a Mama. In an instant, your heart grows—you can already picture those tiny toes, the sweet lips, the blue eyes that look just like yours.

Then, as inevitably as first-trimester nausea, reality sets in. Suddenly, your brain goes into overdrive with a litany of worries – will I ever sleep again? Should I kiss my pre-baby body goodbye forever?

And—perhaps most importantly—how  on earth are we going to pay for this?

We can’t tell you for sure whether your precious bundle will be a good sleeper (hopefully) or whether you’ll be back into those pre-pregnancy jeans within weeks (probably not, unless you have amazing metabolism or you’re an A-list celebrity with a nanny, a personal trainer, and a dietitian in your entourage. Either way, we’re jealous). However, we can definitely help you navigate your mat leave finances.

We asked George Boelcke, a financial consultant and author of It’s Your Money, to help us with a handy guide to baby-proofing your bank account, before, during, and after your maternity leave.

BEFORE
Try to change your spending habits
Most companies don’t top up your mat leave paycheque to your full salary—and many don’t offer any top-up at all. As a result, even if you have generous benefits, chances are you’ll be dealing with some loss of income. So, before the baby comes, take a look at your spending habits and see where you can cut back.

Start bringing a lunch from home, make a weekly menu and grocery shop for only the items you need, reconsider those magazine or cable TV subscriptions, and resist any impulse shopping (yes, that means that adorable-yet-impractical baby suit jacket. Trust me).

Boelcke says the sooner you can trim your budget, the better.
“You need to turn your finances around to make this happen,” he said. “And you can’t turn your finances around in 20 minutes,”

This one sounds obvious, but try to save as much as you can
Set up an automatic deposit into your savings account every time you get a paycheque—even $50 makes a difference over nine months. Scale back your vacation plans and put the extra cash aside.

Delay any unnecessary purchases or projects and use the money to pad your bank account. You’ll thank yourself later.

Talk to your bank or financial advisor
They’ll be able to help you with some options to get over the mat-leave slump, including consolidating your debt, offering interest-only payments on existing loans, or temporarily easing off on your RRSP contributions. You can even refinance your mortgage to take advantage of rock-bottom rates—just be careful to avoid any break penalties.

“You and your partner need to have a heart-to-heart to discuss what you’re prepared to do,” says Boelcke. “Are you prepared not to make RRSP contributions for a year? Ultimately, if your kid is more important, you’ll make it work.”

DURING
Try to avoid scheduling outings around shopping
This was a killer for me.  During my maternity leave, I found it hard to resist the siren song of the mall, Ikea, or Target, where Young Sir and I could happily wander indoors (especially during the winter deep-freeze). The trouble is, even if I didn’t intend to buy anything, I would rarely leave empty-handed—and those little expenses added up.

“The average person that goes to the mall leaves $104 behind,” Boelcke says. “The simple solution—don’t go to the mall.”

When the inevitable mat-leave cabin fever strikes, visit the library, an early years centre, go to the park, or schedule a playdate at a friend’s house. Free outings will save your sanity and your wallet.

Borrow your baby gear
Seek out other moms who may have a spare Exersaucer, Bumbo, or even a playpen that you could borrow. These handy items are only useful for a few short months , so if you can, try to snag one from a friend. Make sure to return the favour, whether it’s with a bottle of wine, a fresh loaf of banana bread, or—even better—an afternoon of babysitting.

Give yourself an allowance—and stick to it
It’s unrealistic to think that you’re not going to spend any money on yourself —you’re a hardworking new mom, after all. But take a look at your budget and set aside some mad money to spend on coffee or a new shirt that’s not covered with spit-up.

Planning for these types of expenses will actually help you out in the long run, says Boelcke. “You do need to have a life, or it’s going to be hard not to fight your budget,” he says. “It just makes you choose your priorities a little more carefully.”

Start thinking about your post mat-leave plans
Are you going back to work? Part-time or full-time? Are you thinking of switching jobs to something more family-friendly? Each of these options will mean different things for your finances. If you’ve been receiving a top-up from your employer and aren’t planning to come back to work, you will likely have to repay some, if not all, of that cash. Changing from full-time to part-time may mean you sacrifice benefits or vacation time. Make sure you investigate your options with your HR department or manager before making big decisions.

AFTER
Factor childcare into your budget
There’s no getting around it: childcare expenses are a doozy. There are ways to cut back—home daycares are usually less expensive than centres, for example, and some families are lucky enough to rely on relatives—but unfortunately, you should be prepared to pay an arm and a leg. Once you find a solution that works for you, fit it into your budget. And don’t forget about that (tiny) light at the end of the tunnel—you can claim your childcare expenses on your tax return.

Formulate a plan to get back on track
If you’ve gone into debt during your maternity leave, you’ll want to tackle it head-on. Sit down and make a budget that includes debt repayment. There are lots of handy tools to help you, from a good old-fashioned spreadsheet to online programs and apps like Mint or You Need a Budget. Less time spent worrying about finances means more time snuggling that baby.

Boelcke says the longer you can put off those purchases that were out of reach during your mat leave, the better shape you’ll be in.

“Try to delay your pent-up demand for another six months,” he said. “Resume your regularly scheduled broke life. The more you can delay, the more financially successful you’ll be.”

Emma Reilly is a reporter for a daily newspaper, the mother of a toddler, and a reformed mat-leave mall walker.

Photo: Antoine K on flickr