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.
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