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4. > Having children
5. > Preparing financially for a baby

Preparing financially for a baby

Whether it’s your first child or your third, now is a good time to review your finances.

Take steps to reduce the financial impact of big-ticket items, such as cribs and strollers, and ongoing expenses, such as diapers and child care.

You will be better prepared if you plan ahead and build the costs into your budget. Get started with FCAC’s Budget Calculator.

Things to consider

• Increase your savings and practise living on a reduced income before your child arrives.
  
  
  • Find out approximately how much money (Employment Insurance benefits and employer benefits) you will receive while you are on leave.
    
    
  • Set up an automatic transfer and transfer the difference from your savings or chequing account to a high-interest savings account or other investment option to help pay for baby-related expenses.
  
  
• If you decide to adopt or need medical services, such as fertility treatments, to help you start a family, research the options available to you and develop a savings plan.
  
  The cost of private adoption services can vary from about $10,000 to $30,000. Fertility treatments can easily cost several thousand dollars per attempt, plus the cost of medications.
  
  
  • Check your employer’s benefits plan to see if it covers adoption or fertility expenses.
    
    
  • You can claim adoption expenses and some medical expenses, such as fertility drugs, on your tax return. Certain provincial and territorial health plans may also cover fertility treatments.
    
    
  • If you have taken out a loan or used a line of credit to pay for adoption expenses or fertility treatments, remember to plan for the payments and include them in your budget.
  
  
• If you need it, child care is the single largest child-related expense you’ll have. Start looking into your child care options now and think about how to include child care costs in your budget.
  
  There are many child care options available to you, such as licensed daycare centres, licensed or private home daycares, a family member or staying at home yourself.
  
  Here are a few things to consider:
  
  
  • Check out child care providers well before your child is born to find one that you feel comfortable with and that you can afford.
    
    
  • Daycare centres are usually more expensive than home daycares.
    
    
  • Some people find that it is better financially to stay at home if one partner’s income would only cover daycare costs.
    
    
  • If you want to able to deduct your child care expenses from your taxable income, you’ll have to choose a licensed provider because you have to report his or her Social Insurance Number (SIN) to the Canada Revenue Agency when claiming the deduction.

Maternity and parental benefits
How to apply and how much you will receive.

Maternity and parental leave
What you need know from your employer before you take maternity or parental leave.

Saving money on baby expenses
Information and tips to help new parents control costs and stay within budget.

Reviewing your family’s insurance needs
How having children affects your insurance needs.

New parent financial checklists
Get organized. Checklists to help you prepare financially before and after the baby arrives.

Saving for your child’s education
Get started as soon as you can to minimize potential student debt.

Related Resources

Date Modified:

2012-04-26