Becoming a parent is one of the biggest joys in life, but it can also be a major source of stress. After all, parenthood goes hand-in-hand with new responsibilities and expenses.
In 2018, Desjardins Insurance surveyed 3,000 Canadians on financial health and well-being. The findings of this survey revealed that:
55% of respondentssaid that a lack of savings is their main source of financial stress.
46% saidthat expenses are a source of financial stress.
That’s why it’s important to set priorities and adopt good habits for managing your family budget. Once you have a budget in place, you’ll see that it’s an essential tool for:
- Helping you set spending limits
- Enabling you to develop strategies for cutting costs in key areas
- Reducing your stress levels and improving your family’s financial health
What’s the best way to effectively manage a budget? First, you need a solid understanding of your financial situation. Test your financial stability and create your financial profile.
Once you’ve tested your financial footing, check out the other articles in our Advice Center. You’ll find helpful tips for reducing financial stress, especially when you’re starting a family or raising children—two very important stages of life.
How to set financial priorities before baby is born
- Draw up a budget. This involves entering your current income and expenses to get an accurate overview of your finances. Then you can project your income levels during your parental leave. This will help you determine how much you can allocate to your new needs.
- Talk to other parents to find out what items are essential and make a list of your new family expenses.
- Set aside an emergency fund, in case something comes out.
- Review your life and disability insurance needs, as well as your will, taking into account your new beneficiary.
How to save after baby is born
- See if you can borrow items from families with older children.
- Check whether your community offers benefits or programs for new parents.
How to keep your budget in check as your child grows
Here are some ideas:
- Buy used sports equipment.
- Sign your child up for school clubs and teams. These are often less expensive than activities offered outside the school.
- Buy a used car and carpool with other parents.
- Encourage your child to make cards and gifts for their friends’ birthdays.
- Check with the provincial and federal governments to see which expenses can be deducted from your taxable income or provide tax credits (e.g., childcare, child fitness expenses, etc.).
- Find out whether you’re eligible for government programs such as the Canada Child Benefit.
- Set financial goals, such as contributing to a Desjardins Registered Education Savings Plan (RESP). For example, you could invest your Canada Child Benefit in an RESP or ask your child’s grandparents to contribute. In addition to investing in your children’s education, you’ll receive significant government grants.
Raising happy and healthy children doesn’t have to put your finances at risk. With proper planning, you can reduce your stress levels and protect your family’s financial future.