Month: April 2014

The Costs of Not Vaccinating – How “Big Pharma” would benefit if we stopped.

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I know this is supposed to be a blog about money management for families. However, because this is MY blog, I will occasionally use it as a platform to speak about things which I strongly believe in. And one thing that I strongly believe in (based on what vast majority of the medical and scientific community believe and have proved) is the importance of vaccinations.

I decided to write about this because yesterday my youngest son had his 12 month doctor visit where he received three vaccines: MMR, Pneumococcal and Hib.

Yesterday I went into the appointment calm and ready, only nervous about the fact that they will hurt a little and wondering if I should buy some extra painkillers on the way home.

But I also look back to almost 6 years ago when my older son was to have these vaccinations and how shit scared I was. It was the time when the whole “MMR causes autism” scare was in full force and I was terrified to vaccinate him. I remember searching online for alternatives, to see if I can get the vaccine as three separate doses and wondering if I should postpone or follow an alternative schedule.

Luckily, his doctor convinced me to get it, arguing that the real risk of him getting meningitis (and ending up with brain damage that would render him similar to someone with severe autism) or other complication from measles is much more likely than him getting autism from the vaccine (which is very true, considering we know now that chance is 0). Being a numbers girl, I like it when someone puts these kinds of things to me in the form of statistics. The fact that the city we were living in was having a measles outbreak at the time sealed the deal. But I do remember being anxious for months afterwards, closely examining him for any signs or symptoms of autism. Wondering, did I just do some terrible damage to my darling little son, who I loved more than anything in the world and whose life it was MY JOB to protect?

When the news broke that the “study”, which was the cornerstone for this real fear that many parents had, was proven not only to be completely false, but also fraudulent, I was both incredibly relieved and incredibly angry. Relieved that I made the right choice but angry for the fear and anxiety it caused me and angry because so many parents did avoid the vaccination because of it.

But what is worse, is that it strengthened the anti-vaccination movement, which to this day refuses to acknowledge this fraudulent study and persists in insisting that “not enough is known” about the side effects (while ignoring the real consequences of not vaccinating, such as DEATH or permanent disability), that it’s “unnatural” (as this blogger so succinctly put it, “You know what’s unnatural? Having almost all children survive infancy”  which they are surviving, thanks in large part to vaccinations) and that its all a big conspiracy by “Big Pharma” to make money.

I was inspired by that same blogger, who is also a mother to a child with autism and wrote on the subject of vaccines, to crunch some numbers to address that last argument (which I hear all the time) and see how much money the big pharmaceutical that makes the MMR makes and how much they would make if they stopped.

The cost of an MMR vaccination (in the US) is $20 for the CDC and $56 for the private sector. I couldn’t find the cost in Canada, since they are covered by our healthcare system, so I decided to take an average of those figures – lets say therefore that the “big pharma” company that makes it sells it for $30 a pop.

In Canada, about 380,000 children are born every year.

So 380,000 x $30 = $11,400,000. Meaning that the pharma company would earn just over $11 million in revenue every year if all of those children were vaccinated. Wow, $11 million – that’s a lot, you might think!

But now suppose that we stopped vaccinating our kids. Before the vaccine was introduced in the 1960’s, approximately 300,000 to 400,000 people were getting measles annually in Canada. So, ignoring population growth, lets use the average of 350,000 cases of measles every year that would result (as not just the children born that year would be vulnerable but everyone who isn’t vaccinated).

According to the CDC (Center for Disease Control in the US), approximately 20% of measles patients are hospitalized.

So 350,000 x 20% = 70,000 people would be hospitalized every year due to measles.

Now consider that the average cost of a hospitalization is $7,000 (based on a week long hospital stay) in Canada (and lets ignore that a measles hospitalization would likely last longer than two weeks).

70,000 x $7,000 = $490,000,000 = So $490 million (that’s almost half a billion).

Of course, that isn’t just the cost of pharmaceutical drugs and supplies, but also the doctors’ and nurses’ salaries, utility costs etc. But it does include the cost of drugs and supplies – all provided by “big pharma” and “big corporations”. Even if we allocate just 10% of that to those “evil” corporations, that is still $49 million that they would earn PER YEAR.

So $11 million vs $49 million (using an extremely conservative assumption). Which is higher? Obviously, treating illness is much more expensive than preventing it. And I only used the financial impact from measles alone – I didn’t include the instances and effects of mumps and rubella, which the MMR helps to prevent as well, that would occur.

I also didn’t factor in the real financial costs to families and individuals who would be forced to miss work (as measles is contagious and lasts for over 2 weeks) to care for sick family members or to recover, costs of treating the illness at home and cost of the long-term potential consequences. Or the cost of healthcare in general going up so high that our government would be forced to either tax us more or shift a huge chunk of that cost on to us by making us pay ourselves.

But the real cost of stopping vaccinations is the 1.5 per 1,000 or 525 deaths that would occur every year in Canada from measles alone. This is a cost that no parent, no matter how wealthy, can afford and is a cost that even big pharmaceuticals can’t benefit from.

So please, please vaccinate.

 

MLK says it best.

MLK says it best.

 

 

 

Budgets for Beginners – Part 2: Creating a budget

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household budget cartoon

So you’ve decided to start a budget. Great! Creating a budget is primarily about math. You have an income which you have to allocate to various expenses – some essential, some not. The goal is to have a budget that balances – so that your expenses do not exceed your income, because otherwise you will go into debt. Pretty simple, right?

In theory, yes. In practice, not necessarily. It can get confusing and frustrating. So I wanted to share with you how I create a budget. This is what I’ve determined to be the best based on reading what financial experts say (I’m always reading financial advice books to learn new and better ways to manage my money) as well as my own personal experience (trial and error).

You CAN Start NOW.

One thing that I’ve read in many financial advice books is that you should track your spending for X amount of days before you create a budget in order to see where you spend your money. I disagree – unless you primarily spend cash, there is no need for this. In this day and age of electronic statements and real time updates, all you need to do is download the last 6 months to a year of bank and credit card statements and you will have a much clearer picture – one that is true to your actual spending habits and will catch all those expenses you don’t think about (bank fees, interest, any direct debits etc).

So here we go. I like to follow a monthly budget the most, since many recurring expenses are monthly (mortgage, car payments, insurance etc).

I’ve included a budget template below which can help you get started and where I go into more details on categories. When you are filling out the budget, I think its a good idea to start with what you REALLY spend in certain categories just to get an idea of what you are spending your money on and then tweak it afterwards. It might be eye-opening (those daily coffees may seem cheap at $3 a pop, but that does come out to over $90 /month and over $1,000/year) or you might look at it and say, yup that’s about right!

 BUDGET TEMPLATE –>Kasia’s Basic Family Budget – updated template

1. Determine your NET monthly income

So many people mistakenly take their annual salary, divide by 12 and think that is is their monthly income. Its NOT. What you need to do is use the cash you get every paycheque to determine your income. This is net of taxes as well as other expenses (your portion of health insurance at work etc).The best way to figure that out is to look at your bank statement. If you get paid bi-weekly, take that amount, multiply by 26 and then divide by 12. If you get paid twice a month, take the amount and multiply by 2.

Ex. You are paid bi-weekly $2,127 in to your bank account.

$2,127 x 26 = $55,302 –> this is your NET annual salary

$55,302/12 = $4,608 –> this is your NET monthly salary, and your starting number.

If you don’t have a set salary, but make commission or charge for services (say you are a massage therapist, real estate agent or photographer etc) then this is going to be more difficult – you need to determine what you actually earned net (after considering taxes, overhead costs etc) and what portion you want to “pay yourself” and what portion you want to keep within your business. However, you can figure this out by going over your bank statements and come up with what you take home on average (I think a year would be the best, but 6 months should be enough unless you have very seasonal work) after paying your taxes and business expenses. I will be doing a post on running your own business and will include a general business template to help you determine what your income is and how to manage your cash flow.

Next, add in any other steady income you get such as:

– government benefits (for example, disability, Universal Child Benefit)

– spousal/child support

– rental income (if you have a rental property or are renting your basement)

However, there are some things you should NOT include in income – anything you haven’t earned yet or that isn’t guaranteed (like a bonus) shouldn’t be part of your budget. If you do end up getting a bonus or gift of cash, use it to pay off a chunk of debt, boost your retirement fund or even put it towards a vacation or whatever you and your family want.

2. Determine your expenses

I have come up with four main expense categories and have allocated what I believe is a reasonable amount of my budget for each: Housing & Fixed, Utilities, Transportation & Food, Future and Life.

HOUSING & ESSENTIAL FIXED – 35%

Housing expenses are those expenses required to put a roof over your and your family’s head. They are mortgage/rent, property taxes, condo fees etc. Essential fixed expenses are expenses that don’t change month to month (like insurance, childcare) and that you are obligated to to meet and that you need. These you should easily get from your bank statement. Again, if you pay any of these bi-weekly simply multiply by 26 and divide by 12 to get your monthly average.

UTILITIES, FOOD & TRANSPORTATION – 25%

This is my category for essential variable expenses – things that you can’t get away with not spending money on though they are not all necessarily fixed. You should have a good idea of what your utilities are – just take an average of what you spend in the past 6 months to a year and use that as the amount. I include things like tv, internet and home security in this category.

Your food budget should be your groceries. I don’t include restaurants or any kind of eating out in this category.

Transportation includes car payments, gas costs, public transportation costs, parking, tolls etc. While car payments are a fixed cost, I put them with transportation to make it easier to see how much is going towards overall transportation costs.

FUTURE – 20%

The future category is for debt repayment and various types of savings. Most financial experts recommend having a few different types of savings – emergency savings, long-term savings, retirement savings and education savings for your kids.

Emergency savings should be for true emergencies – such as a job loss or medical emergency which would cause you to be unable to work (so not for expected or routine house maintenance, like replacing a leaky roof). This amount should be enough to cover your essential living costs, like housing, basic utilities (cable doe NOT count) and food for about six months. You should make this category a priority. Next would be retirement and education savings. Lastly, I would set up a savings account for long-term wants and needs (like a vacation, new roof, down-payment for a house etc).

The debt repayment category should go to pay off any credit card debt, line of credit and, if you have no other debts, additional mortgage payments. Now, this amount should NOT be whatever your minimum balances are – the amount you are paying should be 10 to 15% of your overall budget. If your minimum balances are greater than 15% of your total budget however, you have a serious problem – I’ll address what to do in this case at a later date.

LIFE – 20%

Once you deduct all the financial obligations from your income, the amount remaining is what you have left over for all those other expenses for life, such as entertainment, kids activities, clothes, gifts etc. You can further subdivide the Life category into smaller categories, such as if you want to make sure you have a specific amount allocated for your kids activities or recurring medical costs (prescriptions, orthodontics) or even a set amount for yourself and your spouse (so you don’t feel guilty about that manicure or expensive haircut and he can indulge in that movie collection). When my husband and I were doing a lot of home renovations, we also had a Home Renovation category to which we allocated a portion of our Life budget because we wanted to pace ourselves and not let the house renovation leave us with little to live on.

3. Analyze your budget – and tweak it

Once you have put your figures into a spreadsheet or done the math on paper, there are a few things you need to do.

YOU have to decide what is reasonable and works for you. Your grocery budget may be high but if you mostly buy organic, and that is a priority for your family, thats ok, as long as you aren’t skimping on savings or paying down debt.

That said, there are some things you should keep in mind though. If you are overspending, you need to cut back. Start with the stuff you can control and that is completely unnecessary – manicures, eating out and yes, organic food. See if you can get out of any commitments or lower your packages (reducing your cable to the most basic package, increase your deductible to get a lower insurance premium etc).

However, make sure its realistic – you need to be able to stick to this budget. If you have a family of 5, but budget $200 a month for groceries, you will very likely go over budget every month, which defeats the whole purpose of it. Also, you need to have some sort of budget for fun – this is your life and you should enjoy it – just make sure its reasonable.

Next see if you are saving enough. I can’t stress enough the importance of getting into the habit of saving. I hear from people “I’ll save once my debt is paid off” or “I have plenty of time to save later, I’d rather have fun now”. Getting into the habit of saving, even if you have debt, is always a good idea – if you wait until your debts are all paid off you may be much older than you expected and what, you’re suddenly going to stop wanting to go on vacation or to the movies? Your habits are suddenly going to change? Even putting aside $50/month is still $600 a year.

Its ok if your budget isn’t perfect.

Many people are shocked when they try to do a budget and the reality of their financial situation hits them. Your budget may not hit the recommended targets right away, and thats ok. If you are stuck paying a high rent and can’t get your savings up to the recommended amount don’t stress – but strive towards those recommended budget allocations. You may end up with an unexpected expense that blows your budget and that oks too. Following a budget should be a plan for life, so you need it to be flexible. If one month ends up not going as planned, just dust yourself off and start again.

Whew! Next I will be posting about “Sticking to Your Budget” – how best to track it, make sure you stay on track and tips on how to maximize it.

If you have any questions, feel free to contact me via my Facebook page: https://www.facebook.com/mommiesandcents

How to throw a child’s birthday party – without breaking the bank

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Image

Happy birthday to my little son!

I know I promised to post the next part of budget series, however I’m still tweaking it (and trying to figure out how to post a downloadable template), so thought I’d add this entry in the mean time about budgeting for certain very important events: namely, kids birthdays. I thought it would be fun, especially since it was my own little son’s first birthday this past weekend.

Its seems like nowadays birthday parties have reached the status of weddings when it comes to lavishness – largely thanks to sites like Pintrest, Facebook and Instagram which motivate (or pressure) people to show off how much they must clearly love their kids by showing the world how awesome a party they threw them. Back in my day, that was achieved by having your party at McDonald’s or Pizza Hut. But now there are just so many more options and ideas, it can easily get out of hand.

But I have to admit, I’M one of those people – I LOVE celebrating birthdays – especially my kids’ birthdays. Even though a part of me is a bit sad that they are growing up so quickly, I’m nonetheless so excited about the next phases of their life and I do want to make it special for them and create a fun memory for the whole family (and post the results on Facebook). But special doesn’t necessary mean expensive. So I’ve come up with some great ways to make the day special without going out of control and breaking the bank.

1. Set your budget and stick to it

Whether its $50, $500 or $5000, its always good to come up with an amount that you can afford and that you WANT to spend. This will also help you focus on the type of party you will have and the number of guests to invite (even having your child pick one best friend to take to the movies and for pizza afterwards could end up being much more fun than a huge and expensive party).

Now, I’m NOT one of those people who disapproves of throwing big birthday parties for kids. In fact, for my son’s 6th birthday last year, we threw him a pretty fancy Lego themed party, where we had a company come in and organize Lego based activities for the kids. But I was able to keep costs in control by following my budget.

2. Plan in advance

The sooner you start to plan your party, the better for your budget. Especially if you want to do a bigger party, planning ahead will not only help you spread the cost (all the better for your cash flow), you will likely get a better deal.

If you are on a tight overall budget, working a small amount into your budget every month for birthdays is always a good idea, especially if you are one of those people to whom a big party is important.

3. Do some research

If there is a specific theme or activity you  want for the party, make sure to do some research before you commit (i.e. tell your child) to avoid disappointment if it turns out to be too expensive.

I wanted to rent a large room for the Lego party because I just didn’t have the room at my house (and didn’t want to spend hours cleaning before or after). So before I sent the deposit, I researched various community centers in my neighborhood and found one where I could rent a large room for $20/hour. I did have to look around because costs varied and were as high as $75/hour.

4. Do it yourself (or as much as you can)

Doing things yourself will almost always save you money. For the party, I made my son’s cake (it was awesome). We opted out of the party organizers catering package and bought our own snacks and drinks. However, we did end up going with a pizza chain’s $5 pizzas instead of making our own because when we did the math, we realized that the cost would be pretty similar to making them from scratch (vs the cake, which would have cost upwards of $50 from a bakery). In the end we spent less than $50 on food for 15 kids. I also made the invitations and thank-you cards by printing out a template online and used plain envelopes  instead of buying them.

5. Consider the age of your child

Personally, I don’t make a big deal over birthday parties for babies and toddlers. They are too young to remember it, appreciate it and I doubt many of them even enjoy it. My friend, who did throw a big party for her daughter’s first birthday admitted to me that she thought it was totally unnecessary and looking back wishes she had made it more low key. For my son’s first birthday I decided I didn’t want to spend a bunch of money or exhaust myself on a party. But I did want to make it  fun for the family, so I took to Pintrest and found some good ideas for a cake. My mom offered to make dinner and I spent the remainder of the budget on some birthday hats, the present (a new crib sheet – he loved it, lol) and the photobook of his first year that I plan to make over the next few weeks. We had a wonderful (stress free) evening and got some great “cake smash” photos.

6. Don’t go overboard

It’s so easy to get carried away with the fun and excitement of a child’s birthday. But always remember its just a party and its not worth it to go over the top for (and blowing your budget). With the Lego party, I knew the organizers would be giving out small prizes to the kids so I decided to make the goody bags as cheap as possible. They were mostly full of leftover Halloween candy (don’t judge me, his birthday is early December and those candies have a very long shelf life) and some stickers from the dollar store. And the kids loved them (at least, they said they did to my face). I also totally skimped on the decorations. Other than a colorful tablecloth and cups/plates from the dollar store, the only traditional decoration I bought were some (dollar store) balloons (which ended up doubling as party favors, since each kids decided to take one home).

7. Skip a year…or two

Throwing a big party for your child every year can end up costing your family a lot over the years – especially if you have more than one child. Plus, I feel like it sets a precedent and perhaps a sense of entitlement of a big party every year. To avoid that, I’ve decided that we won’t do big birthday parties every year. The Lego themed party we threw our older son was for his 6th birthday. It was a ton of fun and he and his friends had a great time. But this year I plan to keep it low key (except for the cake, which, like always, will have to be fabulous), just like his 5th birthday.

 

Lego birthday party

 

Budgets for Beginners – Part 1: Why a budget?

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I love budgets. I find that they are the single best money management tool out there and everyone should use them. Especially whoever manages the family money.

The first budget I ever created was when I was off to university. I was incredibly lucky because my parents were paying for my tuition (hurray for RESPs!) and they were also going to give me an allowance to cover my living expenses. However, my dad made me create a budget for this allowance. He said the amount I would get would depend on how good my budget was. Obviously, it had to be reasonable, but he also wanted me to make sure I really thought about what I would need – and live with it. I remember cheekily adding a budget of $100 per month for Starbucks, arguing that I will need it to help me study. He accepted it.

It was a great lesson because I really needed to stick to it. It had to cover everything from my cell phone bill, to books, to laundry, to going out. I got a fair amount, but its crazy how quickly it went – especially when I wasn’t paying attention to my budget.

To put into perspective WHY budgets are so important – and not just for university students, but everyone: over 50% of Canadians don’t have a budget. So its no surprise that:

1. Almost 1/3 of Canadian families are living pay cheque to pay cheque. This means that they never, or almost never, have any money left over after paying for essential expenses, according to this article in the Globe and Mail,

2. 25% have never made a contribution to savings – which is scary, since almost 40% of Canadians feel they will need to have $1 million to $3 million saved for retirement and another 34% will need between $500,000 and $1 million. And yet of the Canadians who are saving, more than half are saving less than 5% of what they earn, based on responses from this poll.

3. Over 75% of Canadians surveyed have an average of $16,000 of consumer debt. Though I bet its actually higher especially if you consider things such as car leases or financing to be consumer debt, which I do.

Having a budget, on the other hand, can truly help avoid a lot of those problems.

I’ve been using some form of a budget ever since the one I started in university with varying degrees of strictness. I feel like it keeps me line and keeps me honest about what I can and can’t afford. And, speaking honestly, there have been months where we have been over-budget. Sometimes because something we budgeted for ended up being more than we expected and sometimes because we were lazy about monitoring the budget and spent money on stuff that perhaps we shouldn’t have.

But by reviewing our budget regularly, at least I KNOW where we stand and it gives me a signal if we should cut back a bit (such as buying a bottle of wine and hanging out at home instead of going out for drinks) or a lot (such as put off buying anything except necessities like food or gas – this would include haircuts, clothing for myself/hubby/kids or anything that we really don’t need) over the course of the next month.

I’m going to detail how to best go about creating a budget for a family in my next post, which I will be putting up in a few days. In the meantime, if you don’t already have a budget but will want to create one, start compiling all your financial data (bank statements, credit card statements, tax bills etc) so you will be ready to hit the ground running.

The Wonderful World of Maternity Leave

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Ah, maternity leave. If you are pregnant or thinking about becoming pregnant and you live in Canada, this is a post is a must-read.

I remember when I was pregnant with my first son, I was so excited to go on mat leave. I felt so blessed to live in a country where I was guaranteed a year off from work (I hated my job, so I was really excited by the idea of being away from it for a year) and that I would actually still make some money not working (until I discovered that parenting is incredibly hard and that mat leave is a pittance for the amount of work I did).

I also soon discovered that its actually all quite complicated. I had a lot of questions from the most important (how much money will I actually get) to practical (how to I actually get it). To make this user friendly, I’ve decided to do this in a question/answer format.

However, I do want to preface this by saying that this is MY experience and that while I do reference the Service Canada website, I am human –  I may interpret some things incorrectly or they may not apply to your situation. PLEASE always confirm and verify everything with Service Canada before you act! I hope this post gives you a good idea where to start and the types of questions to ask, but in the end, the ultimate responsibility is yours.

Now that the legal mumbojumbo is done, here are some questions to ask about maternity leave.

1. What is maternity leave?

2. How much are maternity leave benefits?

3. Am I eligible for maternity leave benefits?

4. Can I work while on maternity leave?

5. How do I apply for maternity leave benefits?

6. What else should I know about maternity leave?

1. What is maternity leave?

Maternity leave is a period of time that all employers in Canada HAVE to give you – they legally have to hold your job or one of equal status and pay for you for up to a year – so that you can take care of your newborn baby or adopted child.

In Canada, when women take maternity leave they are entitled to certain benefits, which fall under the Employment Insurance (EI) program. It is a monetary benefit that you can claim when you are pregnant, have recently given birth, are adopting a child or taking care of a newborn. This is a benefit that is provided at the federal level for all provinces except for Quebec, which has its own maternity/parental leave program. I only discuss the former.

The monetary benefit is broken up into two parts: Maternity Leave and Parental Leave.

Maternity Leave benefits are paid for a maximum of 15 weeks and only to biological mothers, including surrogate mothers, who cannot work because they are pregnant or have recently given birth. The 15 weeks can start as early as eight weeks before the expected date of birth, and can end as late as 17 weeks after the actual date of birth.

Parental Leave benefits are paid for a maximum of 35 weeks and can be taken by biological or adoptive parents.

So this means that only the biological mother can claim the first 15 weeks of leave benefits but either the mother or the father/other parent can claim the parental leave benefits. The mother can, of course, take all 35 weeks of the parental leave, which combined with the 15 weeks of maternity leave is what makes that 52 weeks or year that everyone talks about.

Things to note about the 35 weeks:

  • Both maternity and parental benefits are the same even if you have multiple births (like twins) or adopt more than one child at a time. So you don’t get any added benefit for having more babies (sucks, I know since its that much more expensive).
  • If one spouse decides to return to work after taking a few weeks of parental leave, but then realizes a few weeks later that he or she would prefer to stay home with the child, he or she is still entitled to the unused weeks of parental benefits, as long as the 52-week period after the birth or adoption placement has not expired.
  • Like I said, the mother can take the entire 35 weeks or can share any portion with the father.
  • Both parents CAN take the leave at the same time (which we actually considered by realized we couldn’t afford).
  • If your newborn or newly adopted child is hospitalized, the 35-week timeframe can be extended by the number of weeks your child is in the hospital

2. How much are maternity leave benefits?

Honestly, not that much. I think many people are unpleasantly surprised by how little they actually are.

Ok, here we go. If you are eligible to claim them (see below where I discuss eligibility), the basic rate for calculating EI benefits is 55% of your average insurable weekly earnings, up to a maximum amount. As of January 1, 2014, the maximum yearly insurable earnings amount is $48,600. This means that you can receive a maximum amount of $514 per week which works out to about $2,227 per month. This amount, though, is taxable, so the net amount is actually less (and this depends on the province you live in). For example, for Ontario, that would be about $452 per week or $1,958 per month. I like this website for helping figure out the net amount. Remember to put in 55% of your gross annual income, so if you make $48,600 or more per year that would be $26,730 for the purposes of calculating your benefit.

Now, this is the MAXIMUM. If you earn less than $48,600 per year then you need to do the math. This might also be the case when, although your salary is over $48,600, you actually earned less in the 52 weeks before you go on leave.

So say you earned $40,000 in the 52 weeks before you go on mat leave, the calculation would be as follows:

$40,000 x 55% = $22,000 per year

$22,000/52 weeks = $423 per week less tax based on the province you live in.

The only exception is if you qualify as a low income family – i.e. your net family income is less than $25,921. In that case you can get an EI supplement based on your income and the number of children you have.

Also, just a quick note – usually the maximum salary amount is increased each year. However, the benefit you get is based on the year you give birth and doesn’t change if you leave takes place in two calendar years. So for example, if you had your baby in December 2013 and qualify for the maximum benefit, you will receive a slightly lower benefit amount than someone who gave birth in January 2014. Its not going to be a huge amount, but its something to keep in mind when making your mat leave budget.

3. Am I eligible for Maternity Leave & Parental Leave Benefits?

In order to qualify for Maternity Leave and Parental Leave there are some requirements you have to meet.

  1. You are employed in insurable employment and have been paying your EI premiums (this is usually deducted straight from your pay cheque). So, if you are a stay-at-home mom or have job where you don’t pay EI, you won’t get it.
  2. You are the biological mother (for Maternity Leave Benefits) and biological or adoptive parents (for Parental Leave Benefits). So this excludes, for example, grandparents, if they wanted to take leave from their jobs to care for your baby.
  3. Your normal earnings are reduced by 40% or more due to having to care for your baby or adoptive child.
  4. You have accumulated at least 600 of insurable employment over the past 52 weeks before going on leave or since your last EI claim (say you were unemployed and claiming EI 6 months before you went on leave), whichever is less.

4. Can I earn money while on Maternity Leave?

The answer to this question is: yes and no.

While you are receiving Maternity Leave benefits (i.e. the first 15 weeks that can be only taken by the biological mother), the government will deduct the entire amount you earn dollar for dollar from your benefits.

While you are receiving Parental Leave  benefits, you can earn up to $50 per week or 25% of your weekly benefit, whichever is higher. The government will deduct any money earned above that amount dollar for dollar from your benefits.

Its a bit of a pain though, because if you do earn income while on leave, you need to fill out a report every 2 weeks detailing how much you made. So say you selling something on the side, like Arbonne or Mary Kay, you need to figure out an approximate profit for that period (and profit is NOT the same as commissions). Its easier if you work somewhere and get paid by the hour, but its still annoying to have to fill out that report.

This is a topic which really annoys me. No, not because I think its a “precious time to be with your baby and how could you think about working” but because I wish the government would let parents supplement their income while on leave without being penalized for it. I know the point of the benefit is to help parents financially so they can care for their baby but there are many ways to be able to care for your baby most of the time and still make some money on the side. A family’s expenses don’t go down when they have a baby – if anything, they go up. And there are so many side jobs one can have to earn a bit extra to help maintain a certain standard of living or avoid  going into debt that can be done all while maintaining excellent care over the baby. But the government seems to be taking note of this and have launched a Working While You Claim project which will allow people to earn a bit more income while claiming EI benefits (of which Parental Benefits, but not Maternity Benefits, will be included).

I will do a post on working while on mat leave though. I think there are creative ways to earn some income and still take advantage of being on maternity leave.

Also, please note that there are certain types of income that don’t affect your maternity and parental leave benefits, such as disability benefits, employer top-ups and others which can be found on the Service Canada website.

5. How do I apply for Maternity & Parental Leave benefits?

You apply for both Maternity & Parental Leave benefits online. You can find everything you need to know here.

Just remember, this is a government program and so of course it takes time and requires a lot of information and documents. Check out the link above to make sure you have everything you need ready to go so you aren’t scrambling for it while trying to deal with the sleep deprivation you will have while taking care of a newborn.

6. What else should I know about maternity leave?

I’ve touched on the most important parts of maternity leave benefits that are provided by the government. But there are a few more things to consider regarding maternity leave.

  • Employer top-ups. Your company can give you a top-up (an amount over an above your EI benefit amount) that does not reduce your benefit. While this can be an amazing benefit, make sure to read the fine print. Many companies that offer this benefit often obligate you to return to work after you maternity leave for a specific period of time. For example, the firm where I worked topped up my salary to 100% of my salary for 17 weeks, but I was obligated to work for them for a full year after my leave or be required to pay back the top-up on a pro-rated basis. If you don’t plan to return to your old job (whether it is because you decided to stay at home with your child or simply get a different job), keep this in mind.
  • You can continue to receive maternity and parental benefits even if you leave Canada – this is different from regular EI benefits. This is good to know as many people like to take the opportunity to visit family and friends abroad during their leave.
  • If you don’t want to share you 35 Parental Leave with your partner, they can still take up to 35 weeks of unpaid Parental Leave and be covered by the same laws as you regarding job security. This may be an option for those who want their partner or spouse to take some time off to be with the baby, but don’t have enough vacation time or don’t want to use it.
  • While you are entitled to take a year, don’t feel you have to or feel bad if you can’t. Realistically, not everyone can afford to have their income so drastically reduced for such a long time and not all parents want to be off work for that long. I, personally, hated my job when I went on leave, so for me it was a great escape and took 11 months with my first son. If I had loved it, I probably would have taken less. Its a choice you have to make together with your spouse or partner and don’t let anyone make you feel bad about it. I will also do a post on tips on how to be able to afford your maternity leave and how best to prepare for it.

 For complete information on Maternity and Parental Leave Benefits, visit the Service Canada Website.

Welcome to Mommies & Cents!

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I’ve been itching to create a blog. I love the idea of having a creative outlet for my thoughts, but didn’t want to do just any old blog of personal musings, but something that would actually be useful to people.

There are a lot of things that I am interested in: cooking, science, travel, medicine, parenting…but I’m not an expert on any of those things (doesn’t mean I don’t have opinions on them though)! But one thing I kept coming back to is something that people DO come to me for advice for and something which I feel I am adequately qualified to provide. And that is money management.

However, there are already a ton of resources out there for money management and I wanted to do something that stood out. And that is how I decided to make money management for moms (or really, for families in general) to be my focus.

In this day and age, life has gotten very complicated. The “traditional” family of dad works (and probably manages the money) while mom stays home with the kids is now just a small percentage of what families look like. Women are not only working and contributing to the household financially more than ever, many of them earn more than 50% of the household income (I really hate the term “breadwinner” – it somehow implies that earning money is a contest and that there is a “winner” and “loser” which is just counter-productive and I refuse to use it). They SHOULD be involved in how the family’s money is managed. However, this leads to other problems – for example, many women WANT to stay home but because their families become so dependent on the income they bring home, they can’t.

It is also more important than ever that families are smart about how they manage their money. The press is full of articles warning us that by the time we reach retirement, that there will pretty much be no pension left (not that its that great now, but at least its something). That it costs on average $250,000 to raise a child. All the while people have more debt than ever, there is less job security than ever and economic uncertainty seems to be the new normal. And there is no denying that its true.

Money ends up being a major factor in some of our life’s biggest decisions, such as where to live and how many (if any) children we can afford to have. No wonder that money problems is one of the leading causes of divorce and relationship breakdown, no wonder it causes so much stress.

Proper, or at least, decent, money management has always been important to me. Partially because of the way I was raised to respect money, and partially because I did go to business school and did get that CA/CPA. So I know a lot about it, especially at the business level. But also because my husband and I became parents very young and have had to adjust our parenting/working structure many times to make it work. So far we’ve had times where I worked while my husband was the stay-at-home parent/student, where both of us worked, where he worked outside of the home and I worked from home and to our current  situation where he works outside of the home and I stay home. Through trial and error as well as research and planning, over the years I’ve learned a lot about managing my family’s money so that we can be comfortable and secure (though we are by no means “rich”). That, and because we were the first of our friends and family to have kids, we had to figure out a lot of it on our own. We’ve developed budgets, navigated the fun world of maternity leave benefits and made plans for all types of  savings goals.

I hope to use this blog to share the experiences that I’ve had, what has worked and what hasn’t, as well as what I’ve learned along the way. However, I know there is a lot more to learn and I know many moms out there have unique money worries or questions, so please let me know what you’d like me to look into and write about!

In the meantime, please excuse the boring look of this blog…its going to be “under construction” for a bit as I figure out how to use all the features. Feel free to leave me constructive criticism on improving it.

Happy reading!