Preparing for Baby 2.0

Source: Free Digital Photos

Source: Free Digital Photos

It’s hard to believe that we’re halfway through growing this little baby and that in a few short months our lives will change significantly. It was about this time with my first pregnancy that I was freaking out about, well, just about everything. Having a baby, the money, having a baby, the money…you get my point. We had no idea what to expect. Part of my anxiety stemmed from that fact that with pregnancy #1 we were not in a great spot financially. I mean, our bills were getting paid but we paid very little attention to the ins and outs of our finances. We didn’t have a budget, let alone any emergency fund and I really had no idea what to expect when I started claiming my maternity benefits (and losing over 60% of my income…).

Thankfully a few months into my maternity leave I discovered an online niche I came to know as ‘’personal finance’’ and my life changed for the better. Not only were my eyes opened to so many things (like the beloved ER fund), it changed my relationship with money and allowed me to take control. In the last four years I’ve learned a lot, and it’s through these lessons I can blissfully take a second maternity leave, stress free. Here’s how we’re prepping financially for baby #2.

Use What We’ve Got and Fill in the Blanks

We were in a weird spot for a long time about if we would have more kids, but because of our uncertainly we held onto quite a few things. Given the lack of storage at our house, a lot of smaller/cheaper items like infant and children’s clothes we donated (keeping maybe the equivalent of two totes only) but we did hold onto all larger items like the crib, pack and play, tub, swing. Pretty much everything outside of clothes if very gender neutral which helps too since we don’t yet know what we’re having. The only things we really need this time are a car seat since our infant seat had expired (we scored one already for almost 60% off!), a diaper bag (I used my first one religiously until Maria was out of diapers/not changing her outfit four times per day due to mess, and it fell apart behind repair. Again already purchased online for $36.00 down from $215.00), and a new monitor since ours was always terrible and we just never got around to replacing (still need to buy).

The fact that we have so much starting out is a huge help. I did need to buy a few maternity clothing pieces since we’re in opposite pregnancy seasons and despite my effort looking second-hand, I eventually gave up when it was forecasting 30 degrees (Celsius) and I had no shorts that fit my ever-growing belly. I didn’t pay full price though and may have made three trips with the same discount coupon to save me the 50% on the outrageously expensive maternity clothing items.

Budget Better

As I said we’re in a much better spot financially, not only have we paid off tens of thousands of dollars in debt in the last four years and have a decent ER fund set aside, in general we manage our money better. We’re in the process now of looking into how things will change when I go off and what we need to prepare. We’re fortunate that our daycare situation is so flexible and willing to do whatever works for us too, a huge help since as it looks now, due to my professional licensing requirements for work I’ll be off five weeks earlier than I’d like and will probably pull her out of daycare for two full months then resume in the new year part time (I can’t justify paying a whole years’ worth of fees to work for 5 weeks, financially it makes zero sense).

Shifting Debt for Savings

Until I go off work and we have an idea of our finances, we’re going to temporarily suspend our extra debt payments and stash everything in savings instead. Once my maternity leave money starts coming in and we have an idea of how much we can budget, we’ll then throw it all on debt but in case something happens I want to know we have a cushion to fall back on (though having gone through the process once I don’t foresee anything major happening).

I’m genuinely looking forward to the next half of this pregnancy and meeting our new baby, just as a pregnancy should be. I’ll be honest, getting pregnant when we did certainly derailed a few of our financial goals temporarily but honestly, such is life. I know some people would be torn apart about it, but something I’ve definitely learned in the last four years is that defining your relationship with money is important, and for me, I never want to allow my relationship with money to take away from actually living my life, babies included.

How did you/will you prepare for kids?

Having Fun When You’re Broke.

TTRI admit that a lot of the things I enjoy doing for ‘’fun’’ involve spending money. I love eating out, I love going out for coffee with friends, I love farmers markets, I enjoy going to the gym, I love going on road trips, I enjoy concerts and theater…all of these things cost money. There was a time (multiple, if I’m being honest since the inception of my money-earning days) that I was broke but was still looking to have a good time.

I actually love(d) these days though. I mean don’t get me wrong, people don’t enjoy the feeling of being strapped for cash or not having an emergency fund in place, but given the opportunity you can learn a lot about yourself and really understanding your wants and needs when money becomes an issue. It was during these days that I learned how to have a good time without spending much, if any money at all. Even though money isn’t an issue anymore, these are things I still love and regularly practice today.

Board games

Growing up, cards was something I always enjoyed but I’ll be honest, playing board games wasn’t a big part of my childhood. As an adult though, when I was trying to plan an evening in (because going out was not an option!), I decided to ask friends to bring some games that that had, with them. I wanted something to do that wasn’t watching a movie or sitting around doing nothing. I loved them. It was that year that my husband and I really got into games. My husband’s family had always played games so he already owned a few, we just hadn’t done much together or with friends. Over the years we have acquired quite the board game collection. A few we’ve bought new, some in great shape at second hand stores and a few as gifts. We have our favorites (Catan and Ticket to Ride top the list) but we’re always looking to expand.

Having a game-night in is not only uber cheap, it’s incredibly fun. I can honestly say I would rather spend an evening in with friends playing games than out at a restaurant eating and drinking our bank account dry.

Walks and Hiking

Most of my life I’ve had access to a rec center membership. I really enjoyed going to the gym but a time came when we had to give the membership up, it just didn’t fit in our budget anymore. I relied mostly on walks and hikes to get my exercise in and guess what…I really honestly enjoyed it. I would usually go with my sister or a friend, we’d meet up and go for a decent 4-5km walk a few times per week. When I was on maternity leave, my daily walks were the key to me losing weight. I love finding new places to explore and enjoy getting caught up with friends or being with my own thoughts for a little while. Best of all, it’s free to walk, and it satisfied that ‘’I want to be in a coffee shop drinking coffee with you’’ itch.

Cooking

I have a funny relationship with cooking. I actually don’t enjoy cooking for just two adults, but love preparing a meal for a crowd. When going out to restaurants regularly wasn’t an option, not just for us but many friends too (babies, wedding and new homes do that to you), I started offering to cook in much more. I have become pretty good at feeding a crowd on a budget and really enjoy it. Combine with a few board games and you can have a pretty decent time for minimal cash spent. You can easily turn it into a potluck style meal as well to save even more.

There was a time where I really thought I needed to spend money to enjoy myself. I’m appreciative of the times when spending money wasn’t an option though, as I’ve really learned what it was I wanted out of those situations and can easily replicate for little to no actual money being spent.

What’s your favorite way to have fun without breaking the bank?

How Much ‘’Extra’’ Money Did You Need When Buying a House?

Buying a house is likely one of the biggest purchases you will ever make. After a conversation with friends over the weekend as we visited them in their new purchase, we started to discuss just how expensive those first few weeks post-move actually are.

When we bought our house, we were somewhat prepared for additional costs but like our friends, were totally unprepared for how much the bottom line actually ended up being.

Things we Remembered to Consider

Outside of costs associated with the actual house buying process, we were also prepared to buy the following:

  • Paint for rooms
  • New locks
  • Various furniture
  • Lawn mower/rake/shovel
  • Garbage can
  • Some home linens (more towels, hand towels for bathroom, sheets for new bed etc)

I say prepared but in all honesty we hadn’t done near enough homework on what exactly these things were going to cost us, just that we needed them. We set aside some money and hoped for the best. We were more than a little shocked when we went to buy new locks for the house and came to find out even cheap exterior door knobs could be close to $100 and paint quality and price is hugely variant. It was a big wake-up call to go to our first store, spend close to $700 and still not have everything we needed.

In the first few weeks there were many other things that crept up and we ended up buying, putting us well over the budgeted amount we set aside. Things we needed which didn’t factor in were:

  • Vacuum (not sure how this got through the cracks)
  • New broom/mop
  • Window treatments (the previous owners left some (which were hideous) but not all rooms were equipped)
  • Light fixtures and CFL bulbs
  • Paint supplies (over and above what we previously considered)
  • Our first Costco visit….we may have been a little overzealous with this one.

It was so long ago now that I honestly forget just how much more everything was but I know we spent way more than anticipated and this past weekend our friends were explaining their same experience.

Preventing it From Happening Again

If all goes well, we will be moving in the next two to three years. We were initially aiming to place our house on the market for late 2017/early 2018, but with baby 2.0 on the way it will likely delay us until end of 2018/early 2019 as I will be spending a year on maternity leave, but we haven’t yet figured the numbers out yet so we’ll see.

When we move, not only will we be much, much, more financially savvy, we will do way more homework to prevent another huge budget buster from happening again. It will also help that we will be moving from one house to another house with most things a house would need, where in move number one we moved from a small apartment to a house and were hugely unprepared.

When we look to buy our next house, we will have much more knowledge which will help. I plan on spending a few hours walking through the house before we even put an offer in, itemizing everything that we will want or need. I will do this with every house we consider since initial money needed may be the deciding factor.

Houses are expensive and sometimes I wish we didn’t have one but at the end of the day I really do love having a home of my own where my family can put permanent roots down and create some great memories.

Were you unprepared for your first home purchase?

Explaining How Maternity Leave Works in Canada

Since announcing our pregnancy last week, I’ve had a handful of people ask me about exactly how maternity leave works in Canada (minus the province of Quebec- things are slightly different). A lot of the world seems to be under the impression that we’re entitled to a full year off work at 100% of our income which isn’t (exactly) true. So I’m here today to try and set the record straight.

I am so grateful for the basic benefits which we are entitled to. Having already been through a maternity leave once, I do not understand how people handle these 8-12 week leaves. By 12 weeks you’re still very much bonding and getting into what should be a natural groove. I certainly didn’t have breastfeeding mastered until around then either, it just seems so unnatural to be away from you baby at such a young age. Maybe you’re used to it, or simply tolerate it out of necessity but it makes me sad.

In Canada, according to the government of Canada website, you qualify to receive federal Employment Insurance (EI) maternity or parental benefits if you meet the following:

  • you are employed in insurable employment;
  • you meet the specific criteria for receiving EI maternity or parental benefits;
  • your normal weekly earnings are reduced by more than 40%; and
  • you have accumulated at least 600 hours of insurable employment during the qualifying period or, if you are a self-employed fisher, you have earned enough money during the qualifying period.

How it works is that your employer deducts EI premiums from your wages (this is NOT optional, if you have a job you must pay into these benefits). Again, directly from the site, in 2016, for every $100 you earn, your employer will deduct $1.88, until your annual earnings reach the maximum yearly insurable amount of $50,800. The maximum amount of premiums to be paid in 2016 is therefore $955.04.

Either biological parents or adoptive parents can claim the benefits. The 52 week period starts after the child is born or placed with you. On top of the maternity/parental benefits, if required, you are entitled to 15 weeks of sick leave should you be placed off work due to pregnancy related complications. The benefits can be claimed by either parent. Though it is most common to have the mom claim the benefits there’s no reason why dad can’t. Though you are allowed 52 weeks you do not have to take the full year off, you can take as little or as much as you want within this timeframe.

Should you meet the above criteria you can expect to receive 55% of your income to a maximum of $50,800. I earn more than this, so will receive the maximum benefit. Conversely, if you have a very low income (less than like $25,000/year) you qualify for more. Some employers will then ‘’top up’’ what you’re missing. Where I work for a private employer, I receive nothing in terms of additional top up, but some larger cooperation may offer something. A few examples are:

  • A friend of mine works for a major bank, she gets a ‘’top up’’ to 75% of her income for 6 months. After the 6 months she won’t receive any more top up and will just have the 55% federal EI benefit.
  • Another friend works for a hospital and will receive 90% top up for 6 months, then decrease to 75% for remaining time off.
  • I used to work for a large pharmacy chain and know they used to top you up to 85% of your wages for the full 12 months.
  • A friend of mine wanted to be off for 6 months with their baby but her job didn’t offer any top up but her husband’s job did, so she took 6 months at the 55% max and her husband took the remaining 6 months off also claiming the 55% plus his company topped him up to 80% for his 6 month leave. Though she would have loved to be home for the year, it didn’t make sense financially.
  • Some employers will top you up to the full 100% for all/partial time off.

So you can see, it really depends, but basically if you’re employed in Canada you’re likely entitled to the basic benefits of 55% of your income to the annual max (which is recalculated every year). Another huge part of having these benefits is that your job cannot be terminated while you’re off on maternity leave. They have to guarantee you will return to a job when your time is up.

I hope this helps explain a little more about how it works here. It’s not perfect but it’s better than a lot of other parts of the world. Scandinavian countries for example offer phenomenal parental benefits!

How did you manage time off when having kids?

Good Debt vs. Bad Debt

Good Debt vs. Bad Debt
When you hear the word “debt” it sends a chill up your spine. However, debt does not always have to have that affect on you. While no one wants a crippling amount of debt, having no debt may be negatively affecting you. Everyone has heard of “good debt” and “bad debt” but what does it really mean?

Well, in the most simplest of terms, not all debt is created equally. There is good debt, bad debt and really bad debt. Not all of these are clear when you enter the loan or credit card agreement. Because not all kinds of debt are clearly labeled, many people have begun to avoid debt altogether, according to Get Lenny.

Where is the distinction between good debt and bad debt then? Well, if you speak to billionaire Warren Buffett, all debt is bad debt. Warren Buffett, however, can afford to not have any debt. Most of us will encounter some type of debt in our lifetime though. In fact, eight in 10 Americans are in debt but that doesn’t mean it is out of control and it doesn’t mean it is all bad.

What is Bad Debt?

Bad debt is generally debt that you’ve racked up buying things you didn’t necessarily need or things that would not serve you for the amount of time you’d be paying for them. For instance, if you and your friends hang out on the weekends and you always charge the expenses of your hangouts on your credit card. Normally this wouldn’t be a problem and wouldn’t be considered bad debt (as long as you can pay it off). It becomes bad debt when the credit card bill does not get paid in full one month. You begin paying interest on your credit card at that point and your hard-earned money is going out the window.

Another example of bad debt is a purchase that will not maintain or appreciate in value. These are loans for things like vehicles, technology purchases or furniture purchases. By the time you are done paying the item(s) off, they have depreciated in value so you’ve paid the upfront price, plus interest on items that will never be worth what you’ve paid for them.

What is Good Debt?

Now that we’ve established what bad debt is, what is good debt? Well, for some people, there is no such thing as good debt. However, there are some lines of credit that can actually increase your wealth. The best example of this is purchasing a home. If you are able to watch the real estate market and list your house during a time when the national benchmark annualized appreciation is higher than your interest rate, you will be able to sell your home and make money on it. This means you’ll be able to pay out the remainder on your loan and potentially walk away with tens of thousands of dollars.

Educational debt is also considered good debt to many people. This is because, in theory, you will be able to pay for your entire life’s expenses with the career you will have from going to school for four years. You will not only be able to pay your debt with your salary but you will also be able to pay your bills, save and build a life for yourself from your educational debt.

Though it can be hard to decipher between the two, debt has a place in 80 percent of Americans’ lives. Be careful where you choose to have your debts lie.

Do you have any “good” debt?

We’re Preparing for Another Big Change…

There are some big changes coming our lives…I already mentioned that selling the blog was change number one, change number two and the biggest reason behind me needing to let things go is that we’re expecting again!

ultrasound

Though not totally unplanned, we were both totally shocked to be honest. I was not planning on being pregnant until sometime in May/June but I guess we can’t always have full control over these things. I was actually pregnant before our trip away in March though we didn’t find out until the week after we got home. I’m due the third week of December and selfishly praying I’m not in the hospital for Christmas (explaining this to my four year old won’t likely go over well!).

I started this blog while on maternity leave with Maria and I can say with 100% certainly that this blog, and community, is the reason why we can now plan for a second, much less stressful maternity leave. Since starting this blog 3.5 years ago, we’ve paid off tens of thousands of dollars’ worth of debt and are now in a position where we will be able to have me take an extended leave from work. Though I will be getting some money from our federal employment insurance program, I’ll be without about 60% of my income for a year and it’s ok.

This is only possible because of the debt we’ve managed to pay off (though still have some to go), the fact that we have an emergency fund, and a budget with some flexibility. I’ll talk more about how exactly we’re going to adjust to the changes later but for now I’m just happy we can be excited about this pregnancy and not worrying mostly about the financial side of things as we did with pregnancy #1.

So far this pregnancy has been less stressful for many reasons. Finances aside, my pregnancy with Maria was anything but stress free or ‘’normal’’. Every appointment left us with something new to worry about and it was overall a very unpleasant experience. I’m thankful that just over 15 weeks in and everything is looking great. I realize there are still 25 more weeks to go but it’s nice to know your OB is happy so far and not sending you to the high risk floor for bi-monthly checks at this point.

One of the big things with Maria was that aside from her developmental concerns in utero, I ended up suffering from literally debilitating carpal tunnel syndrome. Like most all pregnant woman, I held extra fluid but not in my feet and legs, all the fluid was being held in my hands and wrists which, combined with my job as a dental hygienist, led me to experience some of the worst pain I’ve experienced in my adult life. The round-clock sharp, shooting, pain in my hands and arms ended up forcing me off work almost two months before my estimated due date. It was an added stress in our lives since we were not planning on me being off without pay for an additional two months.

Though I am praying it doesn’t happen again with this one, if I was to be put off two months early we’d be fine financially. Such a good feeling to have.

In Canada I am entitled to 15 weeks ‘sick time’ (i.e. my OB putting me off work prior to due date) and a combined 52 weeks parental leave. I plan on using all 52 weeks and look forward to being home with our new addition, as well, being home to see Maria start school next year.

I’ll update with more detail of exactly how things are going to be changing for us on the financial side of things but for now I just wanted to share the news with you all and would love any advice on going from one to two kids!

Enjoying Our Summer, On the Cheap

wpid-20150615_161256.jpgThere seems to be this need to spend money come summer time. Take summer vacations, enroll the kids in 2568 different activities and camps, gardening and in general, stay super busy. Living in a climate where we do experience four seasons, I certainly understand wanting to soak up all that our few warms weeks seems to offer us, but it doesn’t have to mean dropping a few extra thousand dollars to do so. Over the years we have found plenty of fun ways to enjoy the summer months, without breaking the bank.

Camping

This is one of our favorite summer activities. I get that it’s not for everyone but we love it. If we stay relatively close to town we can get away for the whole weekend for less than $100 which includes camp fees, gas and food. We save money by packing our own groceries instead of doing a separate grocery store haul just for weekend food; instead of buying those overly expensive mini camping propane cans, we bring our big propane tank from our home BBq to use as fuel for our camp stove and lanterns and we usually pick campgrounds which are easily within an hour drive from where we live, which saves on travel.

We have a very well stocked camping gear collection which we have been accumulating since we were kids which definitely helps. If you’re new to camping and don’t have some basics like a tent, sleeping bags, or camp stove, then it can be quite expensive initially but since we have access to anything and everything we’d ever need, it’s usually a fun cheap family activity for us.

We’re Choosy With Kid Activities

I totally understand the desire to keep kids busy come summertime but it can get expensive, fast! The last two years our summer activity choice has been soccer. It’s a great activity and especially compared to other sports, it’s cheap. We paid $100 for Maria to play soccer this summer for 10 weeks. She plays twice per week and the $100 also included a jersey, shorts, socks and a soccer ball, all for her to keep. It’s a great price and a fantastic sport which she really enjoys playing.

Capitalize on Free

Pay attention to what’s free in your city. We have SO many free activities it can be overwhelming to choose. Through an initiative with our library system we will be able to get into all our provincial libraries for free this summer using our library card to download a museum pass- we will definitely be capitalizing on this!

There are many other fun, free activities which are always available. Spend a day at a beach, have a picnic, enjoy local free parks and playgrounds. Sometimes we can be so pre-occupied with other more expensive options for activities that we forget how fun simple things like a picnic and family walk can be.

Our summers are short and sweet, I don’t like the idea of too much extra spending in a two to three month span so we do what we can to limit costs. There are plenty of ways to enjoy the summer without breaking the bank.

How do you keep costs down when it comes to summer activities?

In Defense of Suburban Living

sunsetPeople seem to hate the suburbs. And I get their arguments. Paying more to live in the city usually means overall lower expenses; less in transportation, more free time with lower commute, and more amenities within walking distance. So why doesn’t everyone aim for that lifestyle? I certainly want more time with my family every day, and who wouldn’t love lower costs in any category? After all we did just buy a second car- arguably not necessary if we lived in the city. The honest truth though? Not everyone wants to live in the city. Here are some of the reasons why city life isn’t for me.

I Like Quite

The city I live in isn’t even that busy when compared to other major cities in the country, but it’s too much for me. I know because I work smack downtown every day so I get deal with it for eight hours a day. Come 5 o’clock though, I want to get out. I enjoy the option sitting on my deck in the summer evenings and hear absolute nothingness, in the daytime it’s a familiar buzz of lawnmowers and children playing. No cars. No yelling. No too-close neighbours. Just quite.

I Like My Yard

No one can argue that suburban living (especially in older neighbourhoods like mine) will have larger yards than those of a city. City living for some means forgoing a yard all together and I couldn’t do it, especially with a kid. There is something so nice about being able to sit, enjoy and play on your own little piece of land. My yard has gardens, trees which I’ve planted, a playhouse which my daughter loves to play in and a driveway that is always well decorated with chalk drawings. I’ve lived in an apartment, I know what it’s about and I didn’t like it. While some love the lack of maintenance, we get enjoyment out of maintaining our yard and would hate to give it up.

Lower Price Tag is Nice

If we moved to the city, for the same type of home and size of land we’re on now, we’d be looking at an easy 100k more. Not only is our mortgage less, our current property taxes are some of the lowest in the city, downtown (and surrounding area) it would probably be about double where what we’re paying now. Yes we have trade-offs (like the second car) but honestly it doesn’t bother me when we’re talking about at least a $700 per month difference in mortgage, property tax and home insurance. Our car is not costing us $700 more per month.

Not Everything Happens in the City

I currently work in the city but my husband does not. He actually works closer to our home and suburban living. Other than my job, we have no reason to come to the city and we’re perfectly happy with making our occasional trip in for a dinner out or hockey game. Everything we need can be found near our home in the ‘burbs. I would actually actively look for a new job closer to home, in the suburbs if the time was right.

Our lives happen in the suburbs. I would much rather be close to our friends and family than my job. Don’t get me wrong. I have days where I love the idea of walking out of the front doors of my office and walking home in about 10 minutes…but then I think about everything I would be giving up and suddenly my commute isn’t so bad.

Do you live in the city or the suburbs? Why?

Why Paying for Extracurricular Activities for My Child is Non-Negotiable

wp-1452556234373.jpgIt’s no secret that our main goal is to pay off our remaining non-mortgage debt. We’re pretty keen to get this done ASAP. Even with things like buying a second car this year, we’re still hoping to have another loan paid off by the end of the calendar year. I’m pretty proud of our progress in the last few years. We’re not perfect though. Far from it. We still have budget-busting moments and probably spend money on things others wouldn’t, but I feel like we’re in a pretty balanced place right now between debt progress and living life.

One area we bleed a lot of money is our kid. Really though, kids are not as expensive as some experts would have you believe but if all was the same and we didn’t have a child we’d have close to $800 more in our budget per month when you consider things like daycare and extracurricular activities.

Extracurricular activities is an area you could arguably find ways to cut if not eliminate, but for us, this is an area that is 100% non-negotiable.  Right now Maria plays both soccer and does ballet. Soccer is pretty cheap. Ballet, not so much. But she enjoys both so we won’t be asking her to stop anytime soon. It’s about so much more than money spent.

Yes we spend a small chunk of money for her to dance every week but we’ve seen a change in her that makes it worth every penny. Since she could sit unassisted, this kid could dance. She loves to move and when music is playing she is sure to be dancing her way around it. She asks all week if it’s time to see Miss Julia (her teacher) and if it’s ballet time yet. In the summer every time we drive past ‘’her field’’ she asks if she can play soccer yet.

While some may see that she’s just learning dance moves or how to play soccer, I argue it’s so much more. Paying for her to be involved in these activities has allowed her to learn so many more skills beyond the lessons each class.

This weekend was her final ballet recital (for the whole school). We had to be at the auditorium for 10:30am for a 12pm performance (their piece was about five minutes of the total show) where the kids then had to sit through for another two hour show. They’re four years old.

I was so skeptical about how long this day was and how they would behave but these kids were rock stars. They listened so well to their teachers, never having to be asked more than once. Took direction, payed attention and were more respectful than some of the parents in the audience. They pulled off a great performance doing exactly as instructed and I knew at that moment the class was worth it.

She is learning SO much more than just how to dance or play soccer. She’s learning about team work, respect, listening to her instructors and most importantly, confidence. So, for us taking out a little bit of money from our budget just so we can pay our debt off a little bit faster isn’t worth it when you weight these things out. Extracurricular activities are very important to us and our family, and will remain as a non-negotiable item for now.

How do you feel about extracurricular for kids? Are they important or a luxury expense that can be cut?