There is a lot to think about when you add a new member to your family. To take some of the stress out of planning, here are a few bits of financial housekeeping you can do before your baby arrives –
- Check your health insurance coverage
- Check your employer’s parental leave policy (if applicable)
- Save for immediate expenses following birth
- Update your budget for the ongoing expenses of raising a child
Check your health insurance coverage
As long as you have provincial healthcare coverage, your baby ought to be covered for routine prenatal care at most provincial healthcare facilities. However, you may need to purchase health insurance if you are not covered by your provincial health insurance scheme.
Check to see if you have any extended healthcare coverage with your employer. If you are planning a hospital birth and think you’ll want additional services such as a private ward after delivery, your extended coverage may include this, or you may need to purchase additional insurance - or put money aside - to cover those needs.
Check your employer’s parental leave policy
Before baby arrives, you should determine how much time you and your partner can take off work and how it will affect your finances.
The government offers Employment Insurance (EI) to provide financial assistance to people who are away from work because they're pregnant or have recently given birth, or parents who are away from work to care for their newborn or newly adopted child. Consider checking your eligibility for this insurance – and make sure you take a look at the application process.
Your employer may also offer additional financial support beyond Employment Insurance, such as a ‘salary top-up’. You should ask to see if any additional support is available to you.
If you have a partner, you may wish to discuss how to divide parental leave between the two of you. Minimizing the financial impact to your household may depend on whether one or both partners will receive additional financial support from an employer.
Save for immediate expenses following birth
There may be a few one-time purchases you need to make before baby arrives. This list could include things like -
- nursery furniture
- a stroller
- a baby car seat
You can find out the prices of most of the items you want to buy before baby arrives. Once you have a rough sense of how much you’d like to spend, start putting money aside in a savings account. The goal is to have sufficient funds for these expenses about 1-2 months before the expected delivery date. This gives you enough time to buy the items just in case the baby arrives early.
Since you only have a few months, we don’t recommend investing these funds you put aside. Keeping them in a savings account means you’re guaranteed to get out what you put in, even if the markets suddenly take a turn for the worse.
Update your budget for the ongoing expenses of raising a child
If you haven’t created a budget yet, now might be the time. You’ll need to factor in new recurring expenses for babies, things like: clothes, food, diapers and wipes. If you’re planning on putting your child in daycare, it’s important to understand those costs too.
And it’s not just your expenses that might need to be updated; your income may be affected too.
One of the biggest challenges of raising a child is that you will now have less free time for yourself. If you were able to earn an income through the gig economy or working overtime, a child will reduce the time you have available to work.
Depending on your family income, you may be eligible for additional child and family benefits from the government. However, it is unlikely that these benefits cover all your recurring expenses – and you may only receive the initial benefits a month or more after the birth of your child.