It took three weeks, but we finally got around to sorting out  our budget and financial goals for 2015. Putting together our budget for the new year was difficult; not only are there going to be a few unknowns, we’re are going to be taking on less income with more expenses. 2015 will be quite a year for us here at Urban Departures…

2015 Brings…

 

Whether you’ve noticed or not, I’ve been a little quiet for the past 22 weeks. It’s not without good reason: I’ve been growing a baby! A little baby girl will be joining this urban family in June. We are very grateful for this blessing and so thrilled to become a party of four.

Boo (our nickname for our toddler son) has affectionately nicknamed his sister-to-be “DD”; he likes to pet my belly and ask “DD, what are you doing? Are you coming out RIGHT now?” He’s also vowed to change diapers and share his toys (though the toys he’s choosing to share happen to be the ones he doesn’t like).

The impending arrival of a second child does bring many financial implications. When setting our 2015 budget and financial goals, we had to consider the additional expenses of preparing and raising a second kid (whom we will now refer to as DD till she gets a real name) as well as the significant decrease in income when I go on maternity leave.

2015 Budget

We’ve opted to approach the year with three separate budgets:

1. Beginning of the year to arrival of DD (Jan – May) – this budget is the same as the previous year.
2. First three months of mat leave (June – August) – Maternity leave kicks in when DD arrives and my salary will be limited to what employment insurance (EI) payments. My employer benefits provide some relief in the form of a top-up in addition to the EI payments. It’ll supplement up to 66% of my monthly pay for the first three months of maternity leave. At the same time, we expect our expenses to be highest during these months, having to pay for items such as health care fees and baby gear. Since I’ll be home full-time, we are debating what to do with our son and whether he should continue attending daycare.
3. Rest of the year (September – December) – Due to the significant drop in income, we’re cutting back expenses, such as our travel fund contributions, personal spendings, and possibly daycare.

We only have income and cost estimates for the maternity leave period; we will need to firm up the numbers and revise the budgets when time comes.

2015 Financial Goals

We hope to accomplish the following personal finance goals in this year:

• Max out the yearly TFSA contribution room contributing $5,500 in to each of our accounts.
• Contribute $2500 to each child’s RESP. We made the $2500 contribution to our son’s RESP during the first week of the year so now we only need to take care of the remaining account, which we aim to do shortly after DD arrives.
• Contribute the amount required to achieve the maximum employer match set out in our defined contribution RRSP plans provided by our employers.
• Maintain an average savings rate of 20% of net income.

Last Word

We anticipate a much smaller savings rate for 2015 compared to the savings rate in 2014, but we are thrilled to be growing our family. Baby #2 is what we desire and prayed for in 2014. We are very blessed. Financially speaking, it will take hard work, diligence and self-control (namely from me) to meet our goals for the year, but nonetheless 2015 will be an exciting year.

What are you most excited for this year?