When we found out we were expecting in May of 2010, we were ecstatic! Then I was nervous. How will we pay for all the baby things we’ll need? How will we pay for childcare when I go back to work? How will I keep paying off all my debt? So many nerve-wracking thoughts flew through my hormone-riddled brain I didn’t know where to begin.
When I have a million questions, I find the best place to start is Google. Google knows all.
A quick search proved there wasn’t a lot of information available for Canadians planning a budget on parental leave. It was time to get off of Google and do some real research.
I tried to calculate what my net take home Employment Insurance amount would be (it was the max amount for my area, which is $411 weekly). I looked through my employer’s benefits to see if I was eligible for any top-up (I wasn’t). I opened up my budget spreadsheet and played with the numbers: again, and again, and again. I ran different scenarios to see how I could divide up my debt payments. Which ones were essential, and which ones could wait. I calculated how much I would need to save up to keep making my debt payments while I was off in order to maintain my Debt Free Date (a lot). I tried to plan how much money I would spend while I was off on parental leave so I could make a skeletal budget.
How did it all work out? Not too bad. I did end up moving my Debt Free Date back into 2012, but I continued to make all my financial commitments, including my contribution to the house account. I’m grateful to my husband for taking up some slack on things like groceries, gas for trips to see family, and any necessities for the kid. But we did ok. And I have a lot of gratitude for life in our province and country, where we are given the opportunity to take a year off to care for our children in their first year of life. Plus we get paid to do it.
Now, this pay is not free. Certainly it’s something we pay into as employees of this country. It is an amount taken off every paycheque we receive, unless of course you are self-employed. (Now the self-employed can actually pay into this program if they would like to take advantage of its benefits, but that’s another post)
Here’s what my budget looked like while I was off on leave:
House/Utilities: $700 a month
Car: $310 payment plus $110 insurance plus $25/week gas
Student Loans: $300 a month
Insurance: $15.08 (life), $18.35 (pet)
Pet: $25/month for food
Miscellaneous Money (this is what I used for any groceries, baby items, or other things I ended up needing cash for while I was off, including social engagements like my baby groups): $40 a month
Now here’s the kicker:
Debt Repayment: $100 a month to LOC – and that was it. It was just a little more than the minimum payment and it killed me every month I made the piddly contribution. BUT I didn’t go into any further debt, which is something to be proud of.
Many parents go into debt while one is on parental leave, and this was not something I was going to do.
So this was the budget I lived on for 10 months in 2011.
Next post: how I made that $40 a month s—-t—-r—–e—t—-c—-h!