Majority of Canadians plan to fund parental leave from savings, not debt

Majority of Canadians plan to fund parental leave from savings, not debt 
-- TD Canada Trust provides advice to expecting parents on how to plan and 
save for their new bundle of joy and a year-long parental leave - 
TORONTO, Nov. 5, 2012 /CNW/ - From diapers and baby food to childcare and 
toys, caring for a newborn and affording a year-long parental leave can be 
expensive. The key to enjoying the first year of parenthood, instead of 
worrying about your finances, is careful planning and smart saving. 
Thankfully, most Canadians are on the right track. According to research by 
TD, 72% of Canadians say they would use savings to start a family and plan for 
a year-long parental leave, compared to 28% who would have to rely solely on 
other sources like the generosity of family or friends, loans or credit cards. 
However, almost half of Canadians (46%) admit they would be comfortable taking 
on debt to finance their new family. 
"The cost of caring for a baby can increase your annual expenses by up to 
$10,000 in baby's first year," says John Tracy, a senior vice president at TD 
Canada Trust. "The key to affording your new little bundle of joy, without 
taking on too much debt, is to understand the true costs of your parental 
leave and then work with your partner and a financial advisor to create a 
realistic budget and a savings plan to meet your goals." 
A father of two young boys, Tracy provides his advice on how to plan and save 
for a year-long parental leave: 
1, Understand the true costs of parental leave and write a budget 
Consider what additional expenses lay ahead, such as new furniture, baby 
supplies, food, clothing and toys, and add them to your list of regular 
expenses. Make room in your budget so you can keep saving (ideally 10% of your 
income) when your little one arrives, and add some buffer to cover life's 
little surprises, such as extra medical needs or even twins! Remember, before 
you can start receiving employment insurance benefits there is a two week 
waiting period during which you will not be paid, so ensure you have buffer in 
your budget to cover this gap, too. 
2. Set up a tax-free savings account (TFSA) and start saving 
To save that extra $10,000 for baby's first year, you would need to find $250 
per week for nine months, so planning and saving ahead for several years is 
ideal. A TFSA is a great saving tool, because you're not taxed on the income 
you earn and you can withdraw your funds tax-free at any time. 
"It can be hard to find money to save for your family's future when you have 
bills to pay today," says Tracy. "If you're having trouble saving, start 
small, set up an automatic transfer and gradually increase your savings. If 
money is tight, sit down with your family or a financial advisor to look for 
ways to compromise on your current living expenses so you have more money to 
3. Consider the implications of parental leave on your RRSP 
"Even a short departure from the workforce, like a one year parental leave, 
can impact the value of your retirement nest egg," says Tracy. "Where 
possible, try to stay on track with long term investment plans while on 
parental leave. In some cases, a spousal RRSP can be a smart family saving 
strategy by helping the lower-income spouse save and entitling the 
higher-income spouse to a tax deduction. Another way to boost your retirement 
savings is to invest your tax refund into your RRSP. 
4. Have open and honest conversations with your partner 
Talking openly and honestly about money is an important part of establishing a 
healthy financial foundation with your partner, but Tracy says it can be hard 
for couples to start the dialogue. "The bottom line is that you need to ensure 
you're financially aligned before your baby arrives," he says. "You need to 
have frank conversations about the financial realities of parenthood and how 
you will work together through the emotional and fiscal implications of a 
one-income household." 
5. Speak to an expert at your bank 
Find out if your new family qualifies for any government benefits or tax 
incentives, and speak with an advisor about updating your financial plan. For 
example, the Universal Child Care Benefit is a government program that gives 
Canadian families $100 (pre-tax) each month for each child under the age of 
six. You may also be able to deduct child care expenses from your income when 
you're filling out your tax return, so make sure to keep receipts for your 
child care expenses—from nannies and day care to nursery schools and sports 
For more information on planning for parental leave, please visit
About the TD Canada Trust Report on Savings 
TD Bank Group commissioned Environics Research Group to conduct an online 
omnibus survey of 1,022 Canadians 18 years of age or older. Responses were 
collected between January 23-27, 2012. 
About TD Canada Trust  
TD Canada Trust offers personal and business banking to more than 11.5 million 
customers. We provide a wide range of products and services from chequing and 
savings accounts, to credit cards, mortgages and business banking, to credit 
protection and travel medical insurance, as well as advice on managing 
everyday finances. TD Canada Trust makes banking comfortable with 
award-winning service and convenience through 24/7 mobile, internet, telephone 
and ATM banking, as well as in over 1,100 branches, with convenient hours to 
serve customers better. For more information, please visit: TD Canada Trust is the Canadian retail bank of TD Bank 
Group, the sixth largest bank in North America. 
Liz Christiansen / Steve Presant Paradigm Public Relations 416-203-2223 / 
Sandra De Carvalho TD Bank Group 416-944-7095 
SOURCE: TD Canada Trust 
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CO: TD Bank Group
ST: Quebec
-0- Nov/05/2012 13:30 GMT
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