How Losing $1500 in Monthly Income Changed Us For The Better

I’m currently on maternity leave. In Canada, through the Employment Insurance program (EI), you’re entitled to maternity and parental leave for a combined 52 weeks at the rate of 55% of your gross income to a maximum of $457.00/week. Some employers then give you top-up bringing you to 75-100% of your income, so for some, being on mat leave has little to no financial change. Not so much for us.

I work as a Dental Hygienist for a family practice. The dentist doesn’t provide top-up, one of the downsides of private industry. There are only a few employees and he needs to pay someone to fill my position while I’m off.

On EI I’m receiving $838.00 every two weeks. Pre-baby my net bi-weekly income was around $1500-1600 every 2 weeks (I’m paid hourly so it varies a little depending on my patients). That’s about $1500 a month in lost income. My question is, how the eff did we ever have money problems?

I’m so mad at myself when I think about how much money we were wasting rather than getting serious about our debt. It took us having a baby to really get serious about our budget and paying debt off. We always paid the minimum requirements but when I think about, what I now know we’re capable of, it sickens me.

Where The Money Was Going

  • Groceries. In all honesty we were probably spending $500/month in groceries throwing anything and everything in the cart when we went…for two people! Now we spend about $300/month and don’t want for much, we’re just much better at planning.
  • Bank Fees. We were spending between $30-50/month on bank fees. Since switching to PC we pay nothing. It’s great and we’re super happy with them.
  • Eating out. This was huge…between hubby and I we were probably spending $300/month in lunch and dinners out. Mostly lunches when we, again, didn’t plan and would end up eating out at work. I’ve always cooked most all our dinners, we’d usually just have one dinner out-usually pizza or something when I didn’t feel like cooking Friday night after an exhausting week of work and long commutes. Now we budget for one meal out per week and we’ve been pretty good about sticking with it.
  • Hobbies/Life/House. We have never been big shoppers/spenders on ourselves for clothes  and alike but I’d go to Michaels/Home Depot and drop some cash for my newest craft or DIY project. Hubby and I both love tinkering with house stuff and playing with tools. Not that I would consider this money wasted per se, we just cut it out entirely when I went off work.

How We’re Managing

  • Given our huge debt load, losing the $1500/month was really hurting us. Our minimum monthly debt payments alone were about $1500. A huge help was hubby getting a very generous and much needed raise, it was great timing.
  • Starting the DMP and getting serious about budgeting and honestly, growing up when it comes to our spending habits. We now think about every dollar we spend. We were never really crazy racking up credit cards or spending beyond our means we just didn’t allocate the funds properly or responsibly.
  • Paying interest-only for my student loans. Of my debt, most of it is in the form of student lines of credit which offer no relief should you lose your job/mat leave etc. For government issued student loans, in Canada at least, you can apply for interest relief where the government makes payments on your behalf for a period of time, I didn’t qualify for this because I made too much money last year and they don’t take current financial situation (me being on mat leave) into consideration. I am however making interest only payments for the current time saving me about $180/month.

When I Go Back To Work

I will be working four instead of five days a week so I can be home with baby an extra day. I’d love to say me being home would save us money with the cost of childcare but it won’t. Daycare shouldn’t cost us more than $30-35/day and after taxes I bring home just over $160.00/day. Not to mention we simply couldn’t live off hubby’s income alone. I love my job and am excited to get back to seeing my patients but I also hate the idea of her being in daycare, without me. We’re hoping hubby can work from home one day/week so she really only needs daycare three days/week. Finding part-time care is a challenge though…

On top of the childcare expense we need to start buying bus passes for me which set us back about $80.00/month we only have the one vehicle and can’t justify the money for a second one when it would only be for me to drive to and from work which would cost probably $200/month in gas and another $200/month to park the stupid thing for the 8 hours I’m at work, no thanks. Public transportation is fine for me.

I do struggle slightly with giving up my one day/week. I desperately want to be home with baby girl. My mom worked so much when we were kids I hardly saw her and I knew when I had a family I would be home more and involved in her life more. A huge reason behind my career choice is that dentistry is usually a M-F, 9-5 type of job, important when it comes to family life. When I think about the extra debt I could pay off with me working that day though it kills me a little. In the end though I think she’ll only be young once and our parental influence is probably most important now. Once she’s in school full time and not care so much about her parents maybe I’ll go back 5 days…we’ll see!

When I started my mat leave and realized just how tough things were going to be we were panicked but in the end it was probably one of the best things that ever happened to us. It was the kick in the ass we really needed!

Comments

  1. Isn’t it amazing how we see our money from the other side when we are put in a different situation. Almost reminds me of my mates wife who always said she was chubby when she was working out at the gym, then as the years went on she put weight on and said, man I was thin back then what the heck was I moaning about. Sometimes we fail to look at the overall picture and where we are at. We compare ourselves to other people, we spend more than we earn to keep up with wants instead of needs and friends and family. You are doing the right thing and when you get back to those patients and start bringing in more cash you will be delighted to have all that extra money in your hands. Keep up the good work!!! Mr.CBB

    • mrsplungedindebt says:

      I know, hindsight is 20/20 right? Comparing oneself to others will easily kill your soul too, I really haven’t ever worried too much what others think of me, it’s my life. Hubby cares a little more (probably just as much as an average individual) but I’ve always beat to my own drum haha.

  2. That’s unbelievable for maternity leave!! I would totally take the full year if we could afford it (and if it were an option). we only get 12 weeks here, and apparently, t’s often frowned upon if you take the full 12 weeks, but you can bet I plan on taking the full 12 weeks. I am also thinking of asking for an extended leave maybe when I have my second. who knows…
    we do spend a ton on groceries and I really need to crack the whip on it. We are eating so much better though! the majority of extra money has gone to produce…

    • mrsplungedindebt says:

      I know, Canada is much better than the states. Some states is less than 12weeks too, 6 for natural birth, 12 for c/sec. I can’t imagine being away from her at 12 weeks, especially with breastfeeding. EI is something we pay into but not a whole lot, I don’t understand why the US doesn’t adopt the same model, not to mention I receive top knot prenatal/postnatal care and a big whopping cost of ZERO (I did want a private room upgrade that was billed to my personal insurance but it doesn’t have to cost you a thing to have a baby in this country-I thank my lucky stars for universal healthcare). The Parental leave can be taken by either mom or dad too…or split.

  3. I always wondered how things and finances change when you go on mat leave, something that I’ll have to experience at some point (though not soon!). Great post!

    • mrsplungedindebt says:

      Friends who went off before me kept telling me ”it will just work out” and it really does, you change your lifestyle if you have to but it works out if you really want it to.

  4. I think you are doing quite well, esp with your grocery shopping!

    We too were wasting a lot of money up until this year. We always had nice money coming in and never dreamed it would stop. When we made some changes and that reduced our income we didn’t make any changes to reduce our spending so we ended up in a mess.

    • mrsplungedindebt says:

      It’s so easy to end up in a financial mess quickly! It’s easy to just put your head in the sand and ignore it for a while too which is even worse. Glad you’re doing better :)

  5. I’d love to know what you’re eating and only paying $300 a month! My partner, our 2-yo son and myself go through $500-700 a month on groceries. I do a lot of cooking at home and don’t use processed foods.

    • mrsplungedindebt says:

      haha I think a lot has to do with where you live as well, I might actually start posting some recipes. I do eat well though!! I just make sure we only buy what we need for meals and shop the sales for meal planning this week boneless/skinless chicken was on sale so 4 of our 7 meals include it in different ways. It’s possible :)

      • We live right downtown in TO. We have a chest freezer and fill it up when we find stuff on sale. My gluttony knows no shame, but still I’d love to know how you’re not starving to death on $300 a month.

        • mrsplungedindebt says:

          ha ok I’ll do a post for you :)

        • mrsplungedindebt says:

          Maybe I’ll do a post for you! I think the biggest thing is not stocking up. I use to buy anything and everything when it went on sale and freeze it/save it for later use, subsequently tying up hundreds of dollars in food I might not eat for months, so I stopped. We pretty much ate everything out of our freezer and now only buy what we need for that weeks meals. We shop on tuesday so sunday or monday we look at the sales and decide what we want for dinner for the week (I shop weekly) based on such sale. For this week, boneless/skinless chicken was on sale so we’re having meals that mainly consist of chicken (we’re having grilled chicken sandwiches, grilled chicken salad etc). I bet if you stopped ‘stocking up’ you’d be surprised, I certainly was! If you don’t already follow him, check out Canadian Budget Binder (Mr. CBB), he has a weekly grocery store challenge that might interest you! http://canadianbudgetbinder.com/

  6. If only I could do that… my little boy requires variety or he just doesn’t eat… Then wakes up screaming with hunger at 3 or 4 or 5 am. We need the freezer! I don’t mind having an cache of food since it gives me the ability to vary the menu for my picky little man. And the freezer isn’t really an budget trap for me since nothing ever gets thrown out. We use it all eventually. (sorry for not posting with my linked profile before! I’m thestarvingartistcanada.blogspot.ca)

  7. And I suspect our food budget woes are mostly due to my unashamed gluttony. I have to eat ALL OF THE FOODS! If I don’t portion control during the cooking process, I’ll eat everything that’s leftover. EG: last night I cooked $10 pork roast. I froze a tiny bit of it (which will help feed my son 3-4 times) as an “instant ready meal” for the little man. And sadly there’s only enough for 1 or 2 sandwiches for lunch after we finished our dinner. My (and my wife’s) metabolism are no doubt to blame as we somehow have the ability to eat to past full every day yet not require double-doors to exit our home!

  8. I stand corrected… after more closely examining my grocery bills, we’re spending closer to $1000 a month.
    thestarvingartistcanada recently posted..MONEY: options update Jan 2013 part 2My Profile

  9. We took a huge hit when I took my first Maternity Leave. We were so nervous as we were reducing our income substantially, plus taking on a car payment. We were amazed how easy it was to live on less and realized how much money we were wasting! Being able to budget and live on less helped us do back-to-back Maternity Leaves!

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