And Baby Makes Three
So now you are a family. What a wonderful and tumultuous time of life! And why didn’t anybody tell you how torn you would be by the decision to stay at home or return to the office? You may have decided before the baby came that of course you would return to work, but holding that precious darling can change minds, melt hearts and thaw rock hard resolutions in the space of a baby burp.
It isn’t only about the money, although money is important, that’s for sure. But if you love your job, go back to work. It may even cost you to go back into the workforce, but it’s worth it-for you and the baby-to be doing what you love. Childcare is expensive, and juggling a child and a career is tough, but thousands, likely millions, of women (and men) do it every day. You can too.
See where you can cut back on expenses if you haven’t already, so that the money crunch (and there’s always a money crunch with a new baby no matter what your salary is) doesn’t hit you too hard. Once you set up a budget, and really take a hard look at what are “wants” and not “needs” and cut back accordingly, you may find the money for daycare pops up in the most unexpected places.
Be sure you keep your partner on board with all the major decision-making. If you’ve decided you do want to stay at home, and your partner disagrees, make a budget for costing out the return to work. Be realistic. But when you make the stay-at-home comparison budget, consider adding in an at-home part-time job-which can cut costs big time, and make the stay-at-home choice pretty appealing. Then be sure to get the job, or work something out with your current employer. You may be surprised at how accommodating your boss may be to the idea.
And don’t ask your mom. No matter how much you love your mom, now that she’s a grandmother, chances are she won’t be able to bear the idea of her little grand-darling being in a daycare (and will advise you accordingly). But unless she’s ready to come and take over while you’re at work, the decision to stay at home or return to the office, has got to be entirely your own.
The decision whether or not to stay at home or return to work is as personal as who you marry, or where you choose to live. No one can make the decision for you, so whatever you choose, make sure it’s the right choice for you.
Staying Home With Baby
The decision to stay home with your new family member or return to work can really tear at some parents’ hearts. There are lots of unknowns, but guessing at the financial costs and expenses should not be one of them. What it will cost you to stay at home, or choose to return to work, is one aspect of the decision that you can get down in black (or red).
Taxes are one of those things that change when you have a child, with that now deductible family member. You also receive child tax credits. Be sure to make the calculations to figure out two things: how much (less) you’ll have to pay, and who should be claiming the baby costs on their tax return.
Childcare is a big question that carries plenty of worry for new parents. If you return to work, will you use childcare at all, or try to get family members to cover those early mornings and late nights? Either way, this is probably going to be the biggest cost for you to think about with the new baby. Oh-and don’t forget to consider who will stay at home when the baby’s sick-day care outlets will not generally allow a sick child to come to the daycare, or stay in daycare once they become ill.
Clothing that you once wore to work isn’t likely going to be needed if you stay at home. That also likely means lower dry cleaning bills. Be sure to work out what you spend on work clothing when you do this calculation. Hair and beauty treatment costs, magazines, and other personal services can also likely be cut back.
Another consideration is time going to and from work as well as the cost of travel. Even if you ride share, or take the bus, these costs will drop tremendously if you stay at home with your newborn.
Food costs, gift costs and charitable giving are all parts of the working world. Even though you are on a budget, once in a while, you’ll likely want to eat out, participate in the office pool, and support someone’s charitable venture. These costs drop off if you stay at home.
When you consider whether or not to return to work, don’t forget the non-monetary aspects. Do you love your job? That might be enough to get you back in the office even if you don’t make a cent after all the costs. Whatever you decide, take the time to work out the finances so that your decision is the best one for your family and future.
Baby Expenses That you Can Live Without & Ones your Baby Shouldn’t
You can go through a wad of cash as a first-time parent trying to sort out the must-haves, want-to-haves, and what-to-avoids when buying for your newborn. Some purchases don’t need to be made at all-like brand name toys or clothes. Some purchases are optional-like a mobile over the crib. Other purchases are absolute must-haves, and some are strictly regulated to ensure your baby is well protected. A car seat and your baby’s crib are perhaps two of the most important purchases you’ll make for your little one, so be sure to do your homework before you buy.
Car crashes are the number one cause of death for children, so a baby car seat is a purchase not to be lightly made. They are considered so important that you can attend a car seat clinic to be sure yours is installed properly. When you do buy, here are some key considerations:
- Car seats are specifically designed to carry children of a certain size and weight.
- Do not put your child in a seat that is either too big or too small. Newborns do not use the same seat as, say, a 2-year old.
- As your child outgrows a car seat, a new seat must be purchased for their continued safety.
- Always follow the manufacturer’s height and weight guidelines when buying your car seat, and read installation instructions carefully.
- For newborns, car seats are installed facing the seat.
- Consider attending a car seat clinic to be sure your baby’s seat is properly installed.
Transport Canada has terrific advice and information on baby and child seats. You can contact Transport Canada at 1-800-333-0371, or by email at roadsafetywebmail@tc.gc.ca.
Your baby’s crib is another critical consideration, and new parents may want to do some serious research before buying their child’s first. Here are some pointers:
- Health Canada warns that cribs made before 1986 do not meet current safety standards and cannot be bought or sold or even advertised for sale. Be sure that, if you buy a used crib, the original labels and dates are intact, and that the crib is dated later than 1986.
- Second, Health Canada also recommends that bumper pads should not be placed in your baby’s crib, nor should toys or other soft items be put in the crib.
- Third, the mattress should fit snugly on all sides to keep your child from slipping between the mattress and the crib bars. Worn out mattresses should be immediately replaced.
- Fourth, be sure that the crib is securely put together. Lock the sides of your child’s crib in place when you put your baby in it.
- Finally, keep your baby’s crib well away from windows, electric sockets, cords, or any other source of potential danger.
For more information, contact Health Canada at 613-952-1014, or by email at cps-spc@hc-sc.gc.ca.
Learn to Save Your Money-and Teach Your Kids Too!
Sometimes parents are nervous about letting their kids in on the financial picture-but it might be one of the best decisions you make for you and your family. Kids already always know what’s going on, anyway, so you might as well ‘fess up in the money department. And you might be surprised what your kids come up with, to help the family out.
Save a little bit each month
One thing you and your kids can both start is to commit to saving at least a small amount of money each month. Do you give your kids an allowance? Then, you could start there. Depending on how old your kids are, you can have them divvy up their allowance into jars-mad money, saving towards a special purchase, savings to go into the bank, and so on-or if they’re old enough, actually tracking their spending and receipts in a log of some kind. Whatever you choose to do, long-term savings that your kids don’t touch should be part of the plan. A general guide is 10%.
Save together for something special
If you’re planning a family trip, save as a family. Have a jar or envelope where anyone can make a contribution at any time. When you or your kids contribute, mark your contribution on the envelope. Whoever contributes the most (make sure it’s proportionate now!) gets extra say on some outing, or gets to choose where you eat, or something else you can do as a family.
Keep it upfront to keep it going
Another trick is to keep the logbook, or the jars, in plain sight where the kids can check on them whenever they want. Don’t make money a dark secret to be squirreled away, hidden, or something to be ashamed of. Now that doesn’t mean they need to show your family management plan to the neighbors! But make money management as natural as making dinner, or doing homework-something you can talk about, discuss, and plan together. Then, take a page from your kids savings plan. Do the same thing for yourself.
Now you try
Write down what you spend each month, and on what. Reduce every expense that you can-like groceries, mad money, other discretionary spending-by 10 per cent. Sock that money away, just like your kids are doing. You might even have a competition with your kids. See who can find the best way to save. Have a tip jar where the loser has to put in $1.00 and the winner gets to take it out every week, or every month, whatever your finances can afford, and do whatever they want with the winnings. If you make saving money fun, your kids will be glad to do it. They’ll learn a really valuable lesson, too. And so will you.
Teaching your Kids About Personal Finance
It is never too early to teach kids about personal finance. Many elementary schools are coaching children about money. They encourage students to set up a store of their choice and allow them to ‘do business’ with one another. Fake money and creative imaginations have gone a long way. These children see the results of how quickly their fake money disappears from spending too much or from making bad business choices. In kindergarten, these lessons begin by teaching needs versus wants.
The days of the old Home Economic courses are coming to an end. Learning to sew, bake or jigsaw woodcarvings just does not cut it any more (pardon the pun). Instead, home economics is being converted into personal finance courses and are being taught at many high schools around North America. The Council for Economic Education feels these courses are extremely important, so much so, that thoughts of implementing them as mandatory for high school graduation is being considered.
These early economic lessons include managing credit, balancing a budget and buying large items such as a first car or home. Many experts feel that the current recession’s length and impact could easily affect a student’s future financial behaviour in the same manner the Great Depression affected their grandparents.
The fact is that the life skills required for the 21st century are dramatically different from the current generation’s high school days. It’s imperative the upcoming generation learns to avoid the financial pitfalls that we have all recently fallen into. It’s imperative they understand the repercussions of overspending and accumulating debt.
Children are vulnerable and pick up the spending patterns of their parents, albeit good or bad habits. The recession has put into play the results of bad financial choices and they are experiencing first-hand the dangers from watching their parents lose jobs, walk away from the homes they can no longer afford or by going on free or reduced lunches in the school system.
The bottom line is personal finance has become more complicated. Teaching them age-appropriate lessons now could save them from the pitfalls of the next inevitable recession. It may be a good idea to take your children to a local bank or financial lending institution with you the next time you go. This will provide them with a one-on-one banking experience so they can better inform themselves for their first loan.