Tips for New Parents (3 Minute Debt Break)

Parenthood happens differently for everyone. But the one thing the same for everyone is the impact on your finances. You are now responsible for a whole other person who depends on you for everything. The good news is you can start planning for these financial changes from the time you find out you’re expecting — and reduce the chances of ending up with debt you can’t manage. 

As with most things, this is easier if you break it up into smaller chunks. In this case, over the short, medium and long-term.

First consider the short term and investigate if you’re entitled to maternity and parental benefits. Canadians are fortunate to have both maternity and parental leave benefits. You will need to consider how much time you can afford to take off work — and perhaps who takes advantage of the parental leave to maximize the household income.

Some additional costs you’ll want to start preparing yourself for include housing costs. Will you need a larger home or different living arrangements to accommodate another person in your household? The first child usually fits quite easily into an existing home, but once you start adding more, your one-bedroom apartment might not cut it. 

Then there’s the future… with toddlers, children and adolescents. The more distant financial impacts will largely depend on what happens after the first 12 or 18 months. Will you go back to work or be a stay at home parent? Will you enroll your child in sports? Will you require any medical or support services?

The important thing to do is budget. And budget. And budget. Get everything down on paper and discuss considerations with the other members of your household. This will ensure everyone is on the same page, help you stick to your budget and ensure you can make any necessary changes along the way.
If you’re carrying existing debt and find your new budget will not allow you to pay it back, you may need to consider ways to deal with it before the baby comes.

During a Free Confidential Consultation, a Licensed Insolvency Trustee will review your financial situation and help you to figure out the best option for dealing with your debt, such as a Consumer Proposal or Bankruptcy. These, and a range of other potential solutions, can help you wipe the slate clean and get the financial fresh start you deserve. More importantly, your Life-Changing Debt Solution will allow you to focus all your time and attention on your growing family.

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