Welcoming a new baby is an exciting and joyful experience, but it also brings with it new financial responsibilities. From diapers and formula to medical expenses and child care, the costs can quickly add up. That’s why it’s crucial to have a solid financial plan in place. In this article, we’ll discuss the financial contributions of Canadian maternity leave and explore how refinancing your mortgage or securing a line of credit can be viable options to alleviate the burden of new expenses.
Canadian Maternity Leave Benefits
In Canada, new parents are fortunate to have access to maternity leave benefits that provide a degree of financial support during the crucial postpartum period. The Employment Insurance (EI) program offers eligible individuals up to 55% of their average weekly earnings, with a maximum benefit amount. This financial assistance helps to bridge the gap in income while parents take time off work to care for their newborns. But this only amounts to a maximum of $638 per week.
The Financial Weight of a New Baby
While maternity leave benefits offer some relief, it’s essential to recognize that the arrival of a new baby brings additional financial obligations. From medical expenses not covered by insurance to unexpected emergencies, the costs can stretch the budget. Child care expenses, diapers, clothing, and other essentials can place a strain on your finances, especially when transitioning to a single-income household during the parental leave period.
Refinancing Your Mortgage
One option to manage the financial strain is to consider refinancing your mortgage. By refinancing, you can tap into the equity you’ve built in your home and secure a lower interest rate or extend the repayment period, resulting in reduced monthly mortgage payments. This can free up additional funds to allocate towards the new baby expenses, allowing you to navigate the financial challenges more comfortably.
Securing a Line of Credit
Another avenue to explore is securing a line of credit. A line of credit provides a flexible borrowing option that can be accessed as needed, making it suitable for covering unexpected or larger expenses associated with welcoming a new baby. By having a line of credit in place, you have the financial safety net to handle unforeseen costs without resorting to high-interest credit cards or depleting your savings.
Your wellness is as important as the baby fear
By taking proactive steps and making informed decisions, you can enjoy the precious moments with your little one while maintaining financial stability. You don’t have to sacrifice support and guidance from a certified doula and traditional birth companion. Your entire wellness is critical to having a gentle, safe journey from pregnancy to birth to the 4th trimester.