Preparing Your Finances For Maternity Leave
Expecting a child can be an exciting time, but it’s also a situation that could leave your financial situation in ruins if you’re not careful.
Having a child can incur a lot of expenses, but it also means you have less time to spend actually working.
This eventually results in a lower income and it can be challenging to pay off debts, bills and save at the same time.
To help you out, we’ve prepared some tips that will show you how to prepare financially for maternity leave.
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It’s all about being proactive
Staying ahead of your finances is arguably the best way to prepare yourself financially for maternity leave.
It’s all about understanding your money situation and balancing it correctly so that you’re prepared for the responsibilities involved in having a child.
It’s vital that you know what’s going in and out of your bank account each month and you need to think ahead when it comes to your expenses, debts and employment situation.
For starters, make sure you’ve started taking a better look at your finances.
Look at where you spend the majority of your money, where you could save and also how much money is coming in.
You should be able to balance your financial situation so that you’re comfortable with your incoming and outgoing.
If you’re having difficulty managing your budget, we’d suggest starting slowly by recording your expenses and taking a closer look at bank statements.
There are several software options that can help you track expenses too, such as cloud-based accounting solutions or budgeting apps on your smartphone.
Cutting back on unnecessary expenses
There’s a good chance that you’re currently spending money on things that offer little value.
This can include everything from entertainment subscription services to expensive takeout foods.
These should show up on your bank statements, but you might also want to keep hold of any receipts that you get so you can examine how much money you’re actually spending each month.
Once you’ve identified problematic areas of your spending, you’ll be able to select certain areas and choose what to cut back on.
Anything non-essential should be removed and you should refocus that money on important items for your child.
You should also consider saving as much money as possible so you have money to cover any emergency or unexpected expenses.
This becomes much easier once you identify the biggest areas of your spending and start cutting back.
Reducing debts while you still can
It’s also important to not ignore your debts before and during your maternity leave.
While many people choose to pay the minimum per month, you’ll see a lot of benefit by actually paying more so you can clear your debts faster, resulting in less stress when you begin your maternity leave.
While it can be daunting to do so, build up a list of debts that you currently have and make sure you pay them off as soon as possible, ideally in full before you consider having a child.
You may be able to reduce your debts by switching credit card lenders or even consolidating your debts if you’re in a tough financial situation.
There are many options to have some of your debt erased too, but these solutions should be researched thoroughly before you decide to go with them.
Speak to your employer about maternity leave
Your employer will likely offer some temporary financial assistance during your maternity leave.
In addition, employment insurance programs might also be able to contribute to your financial security.
By speaking to your employer, you’ll create more transparency regarding the support you can get and also your options for re-integrating into work.
For instance, some employers may allow you to work from home even during your maternity leave to continue generating income, while others might ask that you don’t return to work until you are prepared to take back your old role in the workplace.
Understanding your financial options during maternity leave is important, which is why doing your research and looking at parental benefits can be a huge benefit.
If you’re in need of financial advice to help you prepare for maternity leave, then don’t hesitate to contact us for more information.
We’d be happy to offer impartial advice based on your circumstances to help you lessen the financial stress involved during maternity leave.
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