You’re having a kid— congratulations! While everybody you know is busy giving you unsolicited advice on how to raise your child — like Aunt Meryl talking about the advantages of homemade baby food — you realize that not one single person mentions anything about financial planning.

It’s understandable. Our minds tend to go immediately to things directly related to raising a little human being. There are so many emotions that come along with having a baby and it can all be a little bit overwhelming at times.

I’m not here to add another layer to it all, but there are a few financial milestones that you should knock off the list before the newest member of the family arrives. Here are some things I encourage you to consider.

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Take advantage of the gift of time. 

Many of life’s events are unexpected. Things like job loss, sickness or marital breakdown are most often very sudden whereas planning for a new addition to the family comes with a fairly-defined timeline. 

Use this time to your advantage and one of the most important things you can do to prepare is to plan for the reduction in family income during parental leave. First, figure out roughly what that loss in income will be. 

In Canada, you can receive up to 55 percent of your income to a maximum of $562 per week.

Also, depending on your employer, they may top up your income to a certain percentage or for a set period (e.g. 8 weeks). Check with your employer to determine what you’re eligible for. 

Once you have an idea of your reduction in income and the time horizon you’re working with, you can begin to save by creating a pre-authorized deposit to a savings plan or even a conservative investment.

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Put the training wheels on

Once you have an idea of what that reduction in income looks like, try and experience your future reality by living on the reduced income before the baby arrives. This should help you with saving the extra cash while also giving you a fresh perspective on how much that income reduction will impact your day-to-day spending and how you should budget accordingly.

Prepare for emergencies with a line of credit

If both parents are fully-employed and very early in the planning stages, establish a line of credit that could be used for emergencies once your household income is reduced and savings have been depleted. 

Applying for a credit product when both parties are working and earning a higher income is always best practice. Not only with it increase your chances of qualifying, but it could also mean a lower interest rate, given that your debt to income ratio will be improved.  The caveat here is that the line of credit should be used sparingly and responsibly: this isn’t a free pass for unnecessary spending.

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Time to do some adulting

Life insurance and a will. You’ve probably heard these terms thrown around and wondered “when should I be getting those things?” If you don’t have them already, now is the time. 

A complete review of your insurance needs should be happening before the baby arrives. This will give you an idea of how much insurance you currently have and whether you need to increase your life/disability coverage to account for the newest member of the family. 

The main benefit here is that you are ensuring your loved ones (including baby) are taken care of should anything happen to you. There is a lot of information here, so I highly recommend that you consult an insurance expert to walk you through all your options.

Additionally, you’ll also want to make sure that you have a proper will in place. This can be done in consultation with a family lawyer or there are online alternatives that have popped up recently that can be explored as well.

Apply for any additional support government support

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Lastly, make sure that you are applying for any child and family benefits that exist. The Canada child benefit (CCB) is paid out to eligible families to help them with the costs of raising children. The amount you receive is calculated using several factors including your income.

Talk to your financial advisor about setting up a Registered Education Savings Plan (RESP) and subsequently getting the government to match 20 percent of your contributions through the Canada Education Savings Grant (CESG). This is an amazing way to begin saving for your child’s education very early on.

As with any major life event, sitting down with your advisor is always recommended. We can help you build a solid plan to ensure that you and your family are taken care of financially to allow your time to be creating cherished memories with your new family.

Stacey Agecoutay, CFP®, CIM, RRC, RIS, is a wealth planning specialist at Valley First, a division of First West Credit Union. Connect with Stacey at SAgecoutay@valleyfirst.com