Maternity and Parental Leave Part 2: Budgeting

Maternity and Parental Leave In Canada Budgeting Part 2


Ideally, you’ve gone on maternity leave only after working for at least the minimum 600 hours (about 15 weeks full-time) in the last 52 weeks or since your last Employment Insurance claim. This will ensure you receive the current maximum payment per week.

For many families, this means mom (and maybe dad later on) will be bringing in half of their previous income for a year unless they have a paid maternity leave or top up with their employer. In many cases, maternity leave benefits can be far less than half.

Budgeting for a new baby

Here are some ideas on how to budget for this change in your family’s finances.

You can download our FREE budget now to get you started!

  • Plan ahead. If you’re pregnant, or just planning to get pregnant, now’s the time to go on a money diet and begin budgeting for a baby. Trim your budget and do your best to live off your projected maternity leave income. Save that unused income to provide you with a cushion during your mat leave, to cover some of the larger baby items, or to pay down debt. Don’t assume it will be easier to save more money when you’re not working, because you won’t be tempted by eating out or clothing or events. You’ll be just as tempted, if not more, by baby deal websites and the goods on display at your mall play dates.
  • Make friends in the same boat. Join baby groups where the moms want to meet at each other’s houses, not the local play place. Arrange walking dates that don’t go past an expensive coffeehouse. Find friends that you can share meal planning ideas or coupons with, swap baby clothing with, and generally support you in sticking to your budget.
  • Take a breather. If you’re finding it hard to make ends meet on the basics and you’re being honest with yourself that you’ve cut out the extras, start looking at your fixed costs. You may need to change your mortgage from Bi-weekly to monthly, eliminate your cell phone, cut back on the cable bill, sell unused items for cash, applying for a consolidation loan to ease interest headaches or putting a hold on RRSP payments. Some of these moves are truly for extreme cases only, and if you’re considering them, be sure you’re doing it for the right reasons – not because you’re in a cycle of spending on frivolities and then slashing important things like debt repayment.
  • Bring in extra income. As noted in Part 1, if you work while you’re receiving parental benefits, you’re allowed to earn $75 per week or 40% of your weekly benefits, whichever is higher.  If you’re earning the maximum of $447 per week, you can add an extra $178 in income each week without being penalized. Any income earned above that amount will be deducted dollar for dollar from your benefits for maternity while off the job. Please read 2018 updates here.

There are plenty of things you can do to earn extra income while on leave that don’t require you to pay for childcare.

You can look into babysitting, house cleaning, freelance work, consulting, working in a retail store that allows you to bring your kids to work with you, or another part-time job that fits around your spouse’s schedule or any free babysitters you might have (family, friends).

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  1. These are all GREAT suggestions. My boyfriend and I have talked about it and we decided that after we get married, we’ll save up a $10K baby emergency fund before having a baby – unless things happen without planning, in which case that will be a lot harder.

    If I stay with the company for which I currently work, we get a mat leave top up. Meaning we get an additional 45% of our income for half of the leave. So that’s cool too.

    1. You my dear are in a good place, better than most so good for you. You know you have your head on straight when it comes to finances and the more you read, blog and network the more you learn. I’m so happy we walked the right path. I’m so impressed with most people who read my blog posts and say “thanks”, or “wow I never thought of that”. It’s important to share the knowledge. Saving 10k for the baby if that’s your goal, I say go for it. Cheers Mate, and great blog! Cheers Mr.CBB

  2. I was lucky to get 3 weeks of paid paternity leave with my kids. I did get bored and built a desk and sold a bunch of stuff on Craigslist. It’s interesting to see what different countries offer when it comes to parental leave.

    1. You know the more I hear about what other countries get the more I realize we have nothing to complain about here in Canada. We are very fortunate for what we get and we should be working towards setting goals to make the maternity/Paternity experience less painful on the budget by planning ahead. Thanks for sharing John, cheers mate and enjoy your weekend. Mr.CBB

  3. Excellent read. Ive taken advantage of earning the extra income during my parental leave portion. I work once to twice a month 🙂 and all that extra goes into our emerg savings 🙂

      1. Sorry Im replying so late – the kids are only down now! Well one is and the other is glued to the soccer game! I actually let quite a few of my other mom friends know (although a lot are not going to take advantage of it, why I do not know!) You can not work at all in the first fifteen weeks unless you want it to be deducted dollar for dollar but after that time period you can earn quite a bit a week! My weekly allowance is 186! That is a lot of extra cash a month (well not a huge amount but every penny counts!) I work every other weekend so my boys are watched by my husband (which is great bonding time for them otherwise its hard for him to get that one on one time with them) and I get to get out of the house and re-connect with my colleagues! It is also helping me to transition back to the work force as I am going back full time in just over a month.

        My only other advice is stock up ahead of time (we had four months worth of diapers/wipes/shampoo, etc…)! but it was perfect cause we were all so exhausted it helped out so much, so it helps two fold!!.

        And surprisingly Im saving more money being home. Ive made the effort to cook daily, make lunches, look for fun and free things to do!! Good luck to all the pregnant couples out there!!


  5. Really wish I had read this post when I was on Mat leave! Thanks for the info, I’ve passed it on to some new Mama’s!

    1. We don’t have any kids yet but we did use her principal of saving like we were paying a mortgage and taxes and we saved alot of money. I think if couples think this way before they conceive and after they can put away alot of cash when mat leave comes around. Thanks for your comment Jenny! Mr.CBB

  6. Mr. CBB I’m new to this whole coupon game but my good friend stacey mullins grant has turned me on to couponing as a start n here i thought it was cool to get my free canadian samples n shes getting whole boxes of stuff free i now read your fb post n look at your site daily n i just started but ill get it eventually thanks to you on behalf of us all. your work is greatly appreciated

    1. Welcome first off, and thank you for your kind words. I truly hope that I’m making a difference in someone’s home. Couponing is a great way to save money and we have been doing it for years. We recently started The Grocery Game Challenge so we would stick to our Grocery Budget. I hope you get a chance to post your shop. Have a look around the blog there are so many posts to read that are full of important information for Canadians. If you are on Facebook or Twitter please join me there as well and introduce yourself. Cheers Mr.CBB

  7. Great article! I saved money in an ING account while pregnant to help with mat leave. We also ended up using our TFSA’s by the end of it. I didn’t plan how much we’d need saved so I didn’t have enough. I’ve learned a lot from Mr CBB so I know better now 🙂 I joined 2 mommy and baby groups run through the region so they were free, we went on walks and hung out with family. I enjoyed my mat leave and miss it.

    1. Hi Jen, thanks for your kind words .. I’m glad you are learning alot from me. I know now you have the tools and the knowledge because I’ve given that to you. By the time your next child comes around I hope you are better prepared and your budget of course will be stellar by then right?.. cheers darlin. Mr.CBB

  8. I would advise everyone to plan ahead like was said above, because your income really is cut a lot. Try to prepare as much as you can before the baby comes:)

    1. I thought it was a great idea what sarah says, live like you are already on mat leave and put the extra money away for when you actually go on mat leave. We did this before we bought our house. We lived like we paid a mortgage and taxes and used that money to help with our downpayment. Thanks for your comment Wendy

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