How can you manage financially if one parent leaves a job to care for the family? Can you really survive on one income in today's two-income world?
The truth is that it doesn't take a huge salary to make it work, but it does take some careful planning. Make sure you both understand how your choices can affect your family today and in the future.
Can your family survive on one income?
- If you take a year or less off work: Payments for maternity leave or parental leave from the government or your employer help fill some of the gaps. Plus, you keep your pension, life insurance, health insurance, and disability pay from work, as long as you keep making the same contributions you did before. To learn more about Employment Insurance (EI) benefits for new parents in Ontario, visit the Ontario Ministry of Labour website, .
- If you take more than a year off work: You will need to adjust to living with a lot less income. Some of your living costs will also drop. Here?s a short list of areas where you will likely spend less:
- Transportation (including cheaper car insurance if you no longer drive to work)
- Lunches and work-related social activities (gifts, parties, charity donations)
The best way to understand all the changes is to sit down with your partner and create a new family budget. It will be easier to find areas where you can cut your costs to fit your income.
Becoming a one-income family: Zack and Zoe's story
This young couple had three children under the age of six. The wife hoped to take time off work until their youngest child went off to school. How could they make it work? Read Becoming a one-income family: Zack and Zoe's story
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.