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Budgeting for Baby

By Terryl Allen

Budgeting for Baby - November 2017 - Barrie_Blog Graphics

From pre-natal preparations to preschool to post-secondary, raising a child in Canada is not for the financially faint of heart. The average annual cost for raising a child to the age of 18 has been estimated to be a cool $13,000 which, of course, will not necessarily decrease at that age if you plan to pay for college or university tuition. While overwhelming, it can be useful to remember the old adage that Rome wasn’t built in a day (and neither will your RESP!).

However, if you are expecting a joyful new addition, the time has never been better – or more crucial – for prioritizing your personal finances. Before you begin preparing the baby’s room, set some time aside to prepare your bank account first – as a new parent, you will have enough to worry about in the months to come! Paying down your debt now, building up your savings and planning ahead with a budget are the best ways to set yourself up for financial success.

If you have debt, pay it down now

 While you may not be able to pay all of your debt off within the coming months, make sure you are managing it as effectively as possible. According to a survey by TransUnion earlier in 2017, Canadians are spending more on credit even though we are now carrying fewer cards.

Here are a few strategies for taking charge of credit cards:

  • The stacking method – If you want to hit your debt where it hurts most, focus on the card with the highest interest rate first because this is your most expensive debt, and pay at least the minimum on the other cards.
  • The snowball method – If you are more motivated by momentum, try focusing on paying off the smaller, more bite-size chunks first. While you may not be paying down the most costly credit, understanding what motivates you and having the best plan in place for you are important steps toward success.
  • The consolidation loan method – If you have several sources of debt overwhelming you with interest and stress, talk to a Debt Relief Specialist about consolidating your loans into one manageable monthly payment, preferably at a more attractive interest rate.

Don’t forget to save

 While it is important to manage your debt, you need to balance your payments with your savings. Debt repayment plans and savings plans are not mutually exclusive. Building up some cash reserves is another important step toward overall debt reduction – the more expenses you are able to cover with cash in hand, the fewer expenses you will need to cover with credit.

One strategy for freeing up more cash in the short-term is to focus less on long-term savings, such as RRSP contributions, which will be less useful if you’re in a lower tax bracket anyway. Additionally, savings help to cushion the blow of any unforeseen expenses or emergencies, such as having to leave work earlier for your maternity leave due to health concerns. Think of your savings as your insurance plan; think of your credit cards as your last resort.

 Make your budget your new best friend

 The best way to plan for the future is with the help of a budget. While preparing for baby is more fun than preparing your budget, start thinking of your budget as your new best friend. Like any best friend, your budget will help you through the tough times and keep you motivated the rest of the time. The most important advice you need to ask of your budget before baby comes is:

  • How will our spending habits change with a baby in our life? For example, diapers are not currently part of your monthly spending, so you will need to account for those. Think about everything else you will need to spend more on – such as your water bill – and the things you may get to spend less on – such as gas, if your current commute is a costly one.

 Once you’ve created a budget, start using it – now! You can update your budget as your needs evolve, and it will help you to distinguish baby’s needs from parents’ wants. There is a lot of good advice available to new parents, and balancing needs and wants is a common thread.

 If you’re expecting a new bundle of joy but feeling overwhelmed by a bundle of debt, don’t be afraid to ask for help now. Debt is a major source of stress, and you will have enough of that to deal with as a new parent. Call your local 4 Pillars Barrie office to set up a free consultation session with a knowledgeable Debt Relief Specialist.


At 4 Pillars Barrie we understand your debt concerns.  We appreciate that your debt situation is unique to you.  So, with this in mind we create a Debt Settlement Strategy that will work best for you in your current situation.  I’m the one who will negotiate on your behalf and create the strategy to help you reduce your debt by up to 80%.  Then I will present you with a payment structure that will have your debt paid off within 5 years!  During this time I will also help you create a realistic and manageable budget.  If it’s determined that a consolidation loan is your best debt relief option, my team and I will help secure it.  If a Consumer Proposal is your best solution, you can count on the 4 Pillars team to structure the proposal on your terms as we represent you throughout the whole process.

You may have been told that bankruptcy is your only option, it’s not. Talk to 4 Pillars Barriebefore you file with an Insolvency Trustee. I may be able to find you a less drastic solution, one that provides the perfect happy ending for your very own rags to riches story.

If you have concerns about your debt or if you’d like to discuss your debt settlement options, call me, Terryl Allen at 4 Pillars Barrie, (705) 812-0578.   Read our reviews











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