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Debt Advice: How to Plan for Your Mat Leave

The months before a new baby can be exciting, joyous, exhausting and hectic. Once your baby arrives and maternity leave begins, the last thing most women want is to worry about their financial situation. As you’re planning for your maternity leave, it’s important to take into consideration the possibility of additional debt due to your reduced income. We’ve pulled together some great online resources and debt advice that can help you avoid money worries during your mat leave.

The reality is that taking time away from work sometimes compounds other financial issues that women face. According to Statistics Canada findings from May 2018, women are more vulnerable to low income than men. Part of the reasoning for this is that women are more likely than men to care for children, and women are more likely to reduce their work hours or take time off to care for family.

With Canada’s Employment Insurance parental benefits, women are provided around 55 percent of their usual income. Existing debt obligations like credit card debt, a mortgage or an auto loan (or two) can really affect your ability to make ends meet during maternity leave.

Preparation is key. Here are a few key things that women should explore before mat leave begins.

Be aware of new laws. In 2017, the federal government added a new benefit for those on maternity leave: the ability to take 18 months off instead of 12 months. The lifestyle blog, Yummy Mummy Club, goes into the details of this benefit, the key one being that it only spreads out the same amount of money over a long period of time. It’s a great read if you have maternity leave in your sights.

Visit with HR, find side income, and more. While this article from Today’s Parent goes into the details of Employment Insurance, it also provides other action plans you can put in place before taking leave. One is to make sure you understand your individual employer’s benefits by visiting with HR. Another is to lock down a source of side income that can help you pay bills, rather than be left seeking debt solutions.

Talk with a debt expert. If you’re carrying multiple forms of debt, it’s best to make a plan for paying it off before your income reduces on mat leave. Is it possible to make a lump sum payment? Should you explore debt consolidation — combining your debts into one monthly payment? By scheduling a visit with a Licensed Insolvency Trustee (LIT), you can get advice on different debt solutions and find one that fits your situation.

Explore local resources. Before taking leave, explore what public programming exists for parents to-be or parents of young children. The Province of Ontario website is a great starting point. Their Ministry of Children, Community and Social Services page can help you find an Early ON child and family centre near you. You can also learn more about the Ontario Child Benefit.

Do you have a tip to share or debt advice for mothers heading on maternity leave? Join the conversation on social media using the hashtags #LeaveDebtBehind, #ParentingTips, and #IWD2019.

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