If you are pregnant or planning to become a parent in the near future, it is important to understand what it means to be pregnant about your job and your income. When you decide to have a baby and start a family, it is necessary to start saving money right away. Start by estimating child costs, then assess your own financial situation and determine if you are able to have a child without getting into debt. Knowing how much you will need in the future will help you prepare a budget now. By calculating the costs for the first year, you can calculate how much you need to save each month. The average monthly cost for baby expenses can range from $ 400 to $ 500 a month, not counting emergency costs. For some, saving $ 500 more per month is manageable, while for others it can be difficult. That’s why it’s so important to be financially prepared for your particular needs.
What is maternity leave?
Maternity leave is the period during which a woman stops working to look after her newly born or adopted child. This leave is a form of benefit that our government offers to pregnant women who have just given birth or are caring for a newborn or adopted baby. This free time is protected because employers are required to occupy your position in your absence. In addition, maternity leave is a basic right that allows mothers to receive up to 15 weeks of paid and secure leave. The amount received during this absence is reduced to about 40% of your weekly salary. To qualify for this form of employment insurance, it is necessary to accumulate at least 600 hours of work in the last year. The maternity leave lasts 50 weeks in total and is divided into two parts. Of the 50 weeks of government benefits, 15 are maternity benefits and 35 weeks are parental benefits.
Maternity benefits from Employment Insurance
Maternity benefits are presented to birth mothers or surrogates unable to work due to pregnancy or recent delivery. This government benefit gives mothers up to 15 weeks of paid leave, which can start as early as eight weeks before the expected date of birth and extend to 17 weeks after birth. However, any extended leave beyond 15 weeks will not be compensated. Remember that the general rule in Canada is 15 weeks, but this may vary depending on the province in which you live.
Employment Insurance Parental Benefits
Employment Insurance parental benefits are available to birth, adoptive, or legally-recognized parents caring for a newborn or adopted child. This benefit offers a maximum of 35 weeks of leave that both parents can share as they wish. This part of the benefit is not compensated. It is important to know that the number of weeks of paid leave does not change, even if you have several births (twins, triplets, etc.).
What is a maternity leave loan
A maternity leave loan is to borrow from a lender to access money during or after your pregnancy. Applying for a maternity leave loan gives you a cushion of money that will allow you or your partner to stay home and take care of your child if you wish.
With a little extra money, the portion of your unpaid maternity leave will be funded so you do not have to worry about the loss of income in those months. In addition, the best time for a pregnant woman to apply for a maternity leave loan is when she is still working. Being an active employee and earning a steady salary will increase your chances of being approved. Once a woman has stopped working, the requirements are much stricter and it may be more difficult to be approved. In addition, having a good credit rating and a reliable and consistent source of income will greatly increase your chances of being approved.
We urge you to carefully consider whether taking a maternity leave loan is the right financial decision for you and your family. The money from this loan can allow new parents to become a harmonious family, without being stressed by the money. This will allow them to fully enjoy their first months with their baby. So, if you decide to take out a loan, you must be able to maintain a stable financial situation. The following loan conditions will help you determine if borrowing money is an option for you.
- The lender or creditor will need the first payment within eight weeks of the distribution. So make sure this money is ready in advance. If you think this can be difficult, reconsider taking a loan.
- Using the funds from the disbursement of the loan, make the first monthly payments. This way, you will not be late on the first payments.
- Confirm that your employer will keep your job open and available to you upon your return. It is essential to find a stable job once the leave is over to be able to repay the loan as quickly as possible. Lack of work can lead to serious problems because you will not be able to return to work immediately and you will spend time looking for a new job.
Borrowing money can be risky, but with the right advice, it can be extremely helpful. You should borrow an amount that will cover the baby’s extra expenses and lost income. Of this amount, you should also include an amount specifically for emergencies. It is very important to plan and budget for additional costs, such as medical care and emergencies for babies. However, do not get carried away and keep the main amount of the loan low enough to pay in small, affordable monthly payments. To ensure you have the best chance of getting a loan, keep your credit history strong and positive, as well as at least current and constant income.
Who can benefit from a maternity leave loan?
All parents can benefit from maternity leave loans, including birth parents, surrogates and adoptive parents. With lower incomes and additional baby costs, families may have trouble managing their daily finances, especially those that are already struggling. With a maternity leave loan, both parents can rest easy. With less pressure, a loan will allow one of the parents to stay home and take care of the child.
Many parents choose to stay at home with their 35-week newborns folds, so a maternity leave loan can ease this task. Obviously, it is important for a family to do what is right for them. If returning to work is right for the family, do it. In any case, parents who can stay at home for a long time, who are less stressed because of their finances or who are able to make good decisions for their family can greatly benefit from a newborn baby.
Why would someone want to take a maternity leave loan?
The maximum number of weeks of paid leave is 15, evening nearly four months. However, the first months of a baby are precious and essential for its growth. For parents who do not want to return to work quickly and prefer to spend more time looking after their child, a maternity leave loan will give them the time they need to relax with their baby. With a loan, a parent may be away from work longer. In addition, as mentioned above, due to loss of income and high expenses for the baby, it may be necessary to take out a loan. Most people do not realize how expensive it is to have a baby, so some people may not have much choice. Parents need extra money to prepare for the arrival of babies while generating only 40% of their usual income and keeping the same expenses.
The benefits of a maternity leave loan
- More money available to help with baby’s unplanned expenses and medical bills
- More free time to bond with your baby
- Peace of mind knowing that you can spend more time with your baby
The disadvantages of a maternity leave loan
- Repayment stress
- High interest rates (if you have a bad credit rating)
- All loans are risky, especially if you do not have a stable job
As you can see, with a loss of income, expenses for the baby and daily living costs, having a baby is an expensive process.
Fortunately, there are benefits and personal loans that could help you finance your maternity leave. Just be aware that saving as much as you can during your pregnancy is essential and will be more profitable than you think.
This is another loan option and these are generally more advantageous for borrowers with bad credit or who have difficulty qualifying for ordinary loans for any reason. To apply, you must have your loan signed by a trusted friend or family member. Ideally, this person should have good credit and decent finances (reasonable income, stable employment, etc.).
The benefits of a secured loan
- Secured loans are similar to ordinary personal loans, which means that you can often negotiate a payment schedule that will work with your finances.
- Instead of credit being the determining factor, lenders will take credit from your co-signer. Even if you have bad credit, you should still receive approval.
- You are still the principal payer of the loan. So, even if your credit is not verified, you will improve your credit rating with every responsible loan payment you make.
- Since you have a guarantor, you can receive a better interest rate for your payments than you would with a personal loan and bad credit (once you have been approved).
The disadvantages of a secured loan
- As with any loan product, you will accumulate penalties and interest each time you default on payment (incomplete or late payment, or missed payment). This could result in damage to your credit and unmanageable debt.
- Once your co-signer has agreed to be your guarantor, he or she becomes a secondary paymaster of your loan. This means that if you remain in default for too long and your lender thinks you will not repay it, the responsibility lies with your guarantor. If he also fails to pay, similar consequences could ruin his credit and finances.