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It’s been about a month and half now since my wife and I became parents and despite some setbacks, we’re finally settling into a routine. Well, a routine with our finances. As any parent knows, infants don’t tend to have fixed schedules. We’re now used to a single income, but like many other parents, sometimes it can be a struggle.

First off, I have so much respect for what parents sacrifice for their kids. I can’t imagine how my parents dealt with my brother and me while being relatively new immigrants who recently brought over my grandparents.

My wife and I have minimal expenses, and I have a pretty good salary, so overall we haven’t been affected too much. But as we manage living on a single income, it’s not hard to see why some people may struggle. If you’re expecting or you’re struggling with your budgets, here are some of the things we did to help us deal with a single income.

We updated our budget

This seems obvious, but many people still don’t have a budget. Without a budget in place, it’ll be near impossible to keep things on track. The first thing we did was update our income. My income obviously didn’t change, but my wife qualified for Employment Insurance (EI), so at least she would still be making some money. We then updated our expected expenses which included new things such as diapers and an increase to our monthly grocery budget. I should also note that we already had a fully funded emergency fund and we purposely topped up our vacation fund in advance so we would have money available if we needed it.

We prioritized things

We realized pretty quickly that we had to be ruthless with our budget. At the start, we just assumed we would have zero savings since we had to focus on our fixed expenses. We don’t have that many expenses so my income covered everything, but we did cut back on our eating out budget since my wife would be at home instead of work. With the money that was left over, we decided to set up a Registered Education Savings Plan (RESP), but that’s technically optional. The remaining money went to our savings.

I’ve continued my side hustle

As many of you know, I freelance on the side which helps out quite a bit. We’re not depending on this extra income to keep our budget balanced, so it’s just a nice bonus for us which allows us to save even more. I don’t think I need to explain why extra money is a good thing, but there is something you need to be aware of. If you’re on EI and take on a side job, that income reduces an equal amount of your EI pay making it a wash. Now if the spouse or partner who’s currently still working takes on an another job, it’s just classified as additional income.

We planned for things in advance

Besides our emergency and vacation funds, another thing that we pre-saved for was my wife’s “maternity spending account.” My wife read about this idea in a book where you set aside money in advance so you have money to spend when you’re on maternity leave. She built that into her budget when she was still working so when it came time to withdraw from that account, it wouldn’t affect our single income budget. More importantly, with this account, my wife never needs to feel guilty for spending on the things she wants while she’s off on maternity leave.

We talked about it

Throughout our relationship, we’ve always talked about our finances and it’s no different now that we have a child. Sure, I drew up the first draft of the single income budget, but my wife and I looked at it together and made the necessary adjustments. We both agreed the RESP was the right thing to invest and have decided to manage it ourselves. I’m sure in the future we’ll continue to talk about any financial decisions together.

Final thoughts

There’s no doubt that dealing with a single income can be tough. You may be forced to make tough decisions, but if you prioritize things and have open discussions with your partner, things will hopefully be easier to manage

How We\'re Dealing With a Single Income
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About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi

14 Comments

  1. Avatar MrDoublingDollars on August 7, 2017 at 1:42 AM

    Good points here. My family was always on one income so we never had to deal with the loss of income, just the (slightly) increased expenses. Though I have found that I had to tone down my side hustles to give my wife a break from the kids.

    My kids (I have two, 2y/o and 5 months) are pretty cheap right now, but in the future airline tickets are going to be a killer cost. Advanced planning will be a must for vacations.

    Just found your blog, but it’s great! Thanks. 😀

    • Avatar Barry Choi on August 7, 2017 at 8:18 AM

      MrDoublingDollars,

      I’ve found that I also had to cut back on my side hustles for time management reasons. We also cut back on eating out with the little one here as we find it easier to stay at home and cook.

  2. Avatar Kate on August 7, 2017 at 2:51 AM

    Thanks for this post! My family is being thrust into single income life (we’re moving abroad and we’re granted the visas we were hoping for), so it’s great to hear that it’s more than do-able!

    Kate | http://www.petiteadventures.org/

    • Avatar Kate on August 7, 2017 at 2:51 AM

      we weren’t granted*
      (sorry, I hit post too soon, clearly need more coffee!)

    • Avatar Barry Choi on August 7, 2017 at 8:19 AM

      Kate,

      I really wish that my wife and I lived abroad before we settled down. Maybe we’ll get a chance to go on an extended holiday with Scarlett in the future.

  3. Avatar Mrs. Adventure Rich on August 7, 2017 at 6:46 AM

    I love the idea of a maternity leave fund. We did not do this with our son and it was ok, but I plan to have a fund in place when our next kiddo comes around. Good luck with the new single income budget adjustment!

    • Avatar Barry Choi on August 7, 2017 at 8:20 AM

      Mrs. Adventure Rich,

      The maternity leave fund was all my wife’s idea. I love it as now we don’t need to stress over the small things e.g. her treating herself to an ice coffee when she’s out walking the baby.

  4. Avatar Darren on August 7, 2017 at 9:42 AM

    We dont live in Canada but I like to follow your posts in order to help some friends who do. Overall it looks like you get taxed more heavily than in the US.

    Eating out with the soon to be toddler may be difficult too so you may decide that it’s easier to eat at home. My kids love to eat out but the Mrs started cooking more. 🙂 $

    • Avatar Barry Choi on August 7, 2017 at 10:09 AM

      Darren,

      I think it depends on how you look at it. I’m in the highest tax bracket due to my income, but our taxes also pay for our healthcare. We’re already finding it easier to eat at home as opposed to eating out. Of course, we don’t mind getting take out as a treat.

  5. Avatar The Luxe Strategist on August 7, 2017 at 12:38 PM

    Sounds like you have a solid plan. The maternity spending account is genius! To be honest, I’ve been so scared straight by baby costs (daycare, ugh), I’m saving money now even though we haven’t decided on having a baby yet. It’s better to have too much money than to scrape by later.

    • Avatar Barry Choi on August 7, 2017 at 12:40 PM

      The Luxe Strategist,

      I don’t know how we would be able to handle the expenses without a plan. We already looked into daycare and it’ll cost us about $1700 CAD a month at the start.

  6. Avatar Pia on August 7, 2017 at 7:46 PM

    Love, love, love that idea of a maternity leave fund. With us actively trying for a child, it’s good to read of these ideas that we can hopefully implement as well. Good luck with your parenthood journey!

    • Avatar Barry Choi on August 7, 2017 at 10:21 PM

      Pia,

      The maternity fund was all my wife’s idea and I thought it was great. It took us longer than expected to get pregnant, so it’s a pretty good size.

  7. Avatar Mary on May 31, 2019 at 1:36 AM

    I wish I could have read about this Maternity Leave fund!

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