How Losing $1500 in Monthly Income Changed Us For The Better

I’m currently on maternity leave. In Canada, through the Employment Insurance program (EI), you’re entitled to maternity and parental leave for a combined 52 weeks at the rate of 55% of your gross income to a maximum of $457.00/week. Some employers then give you top-up bringing you to 75-100% of your income, so for some, being on mat leave has little to no financial change. Not so much for us.

I work as a Dental Hygienist for a family practice. The dentist doesn’t provide top-up, one of the downsides of private industry. There are only a few employees and he needs to pay someone to fill my position while I’m off.

On EI I’m receiving $838.00 every two weeks. Pre-baby my net bi-weekly income was around $1500-1600 every 2 weeks (I’m paid hourly so it varies a little depending on my patients). That’s about $1500 a month in lost income. My question is, how the eff did we ever have money problems?

I’m so mad at myself when I think about how much money we were wasting rather than getting serious about our debt. It took us having a baby to really get serious about our budget and paying debt off. We always paid the minimum requirements but when I think about, what I now know we’re capable of, it sickens me.

Where the money was going…

-In all honesty we were probably spending $500/month in groceries throwing anything and everything in the cart when we went…for two people! Now we spend about $300/month and don’t want for much, we’re just much better at planning.

-Bank Fees we were spending between $30-50/month on bank fees. Since switching to PC we pay nothing. It’s great and we’re super happy with them.

-Eating out. This was huge…between hubby and I we were probably spending $300/month in lunch and dinners out. Mostly lunches when we, again, didn’t plan and would end up eating out at work. I’ve always cooked most all our dinners, we’d usually just have one dinner out-usually pizza or something when I didn’t feel like cooking Friday night after an exhausting week of work and long commutes. Now we budget for one meal out per week and we’ve been pretty good about sticking with it.

-Hobbies/Life/House. We have never been big shoppers/spenders on ourselves for clothes etc but I’d go to Michaels/Home Depot and drop some cash for my newest craft/DIY project. Hubby and I both love tinkering with house stuff and playing with tools. Not that I would consider this money wasted per se, we just cut it out entirely when I went off work.

How we’re managing…

-Given our huge debt load losing the $1500/month was really hurting us. Our minimum monthly debt payments alone were about $1500. A huge help was hubby getting a very generous and much needed raise, it was great timing.

-Starting the DMP and getting serious about budgeting and honestly, growing up when it comes to our spending habits. We now think about every dollar we spend. We were never really crazy racking up credit cards or spending beyond our means we just didn’t allocate the funds properly or responsibly.

-Paying interest only for my student loans. Of my debt, most of it is in the form of student lines of credit which offer no relief should you lose your job/mat leave etc. For government issued student loans, in Canada at least, you can apply for interest relief where the government makes payments on your behalf for a period of time, I didn’t qualify for this because I made too much money last year and they don’t take current financial situation (me being on mat leave) into consideration. I am however making interest only payments for the current time saving me about $180/month.

When I go back to work…

I will be working four instead of five days a week so I can be home with baby an extra day. I’d love to say me being home would save us money with the cost of childcare but it won’t. Daycare shouldn’t cost us more than $30-35/day and after taxes etc I bring home just over $160.00/day. Not to mention we simply couldn’t live off hubby’s income alone. I love my job and can’t wait to get back to seeing my patients and the routine work gives me but I also hate the idea of her being in daycare without me. We’re hoping hubby can work from home one day/week so she really only needs daycare 3days/week. Finding part-time care is a challenge though…

On top of the childcare expense we need to start buying bus passes for me which set us back about $80.00/month we only have the one vehicle and can’t justify the money for a second one when it would only be for me to drive to and from work which would cost probably $200/month in gas and another $200/month to park the stupid thing for the 8 hours I’m at work, no thanks. Public transportation is fine for me.

I do struggle slightly with giving up my one day/week. I desperately want to be home with baby girl. My mom worked so much when we were kids I hardly saw her and I knew when I had a family I would be home more and involved in her life more. A huge reason behind my career choice is that dentistry is usually a M-F, 9-5 type of job, important when it comes to family life. When I think about the extra debt I could pay off with me working that day though it kills me a little. In the end though I think she’ll only be young once and our parental influence is probably most important now. Once she’s in school full time and not care so much about her parents maybe I’ll go back 5 days…we’ll see!

When I started my mat leave and realized just how tough things were going to be we were panicked but in the end it was probably one of the best things that ever happened to us. It was the kick in the ass we really needed.

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