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Baby Expenses

Baby Expenses VII

The post is part of the Baby Expenses Series. See the entire series here.

This post is a list of items that either we used or things that I know people typically get with a new baby – I’ve indicated whether I think it’s mandatory and the timing of when you need it. I’ll put an approximate price for new items which is generally on the lower end – you can spend much more if you want . I’ve split it up into a number of posts which is in keeping with my tradition of not having excessively long posts.

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Diaper Genie:

This little device basically does sort of a shrink wrap on the dirty diapers so that you don’t have to smell anything until garbage day. In

Toronto we have a green box recycling program which takes diapers but not wipes so what we did was put the #1 diapers into the green box and the #2 diapers (and wipes) went into the diaper genie and eventually into the garbage.When: When the baby is born.Cost: $30-$40. Bag refills are $10 and last about two weeks.Rocking chair:My wife did a lot the feeding on this and sometimes we rocked him to sleep on it. Definitely not essential but it came in handy.

 

Cost: $250.

When: As soon as the baby is born.

ExerSaucer:

We borrowed one of these from friends. Junior really enjoyed it for a couple of months but once they get mobile then they lose interest. One of the big benefits of an exersaucer is that once they start crawling, Mom can stick junior into it while she goes to the bathroom.

When: Not before about three months.

Cost: $100

Play mat:

This is a cloth mat with shapes on it and it has some suspended toys above it. I really thought it was a complete waste of money. When babies are born their vision isn’t that great and over the first three or four months it gradually gets better. What this means is that they can be entertained and learn just from looking around their environment which is constantly changing (in their eyes). Another thing I read is that they love looking at different patterns. Stripes are a particular favourite of newborns. Rather than buy an expensive play mat I think providing the baby with different patterns to look at would be more beneficial.

When: Six weeks to when they start to crawl.

Cost: $70.

Baby monitor – mandatory:

You put the “listener” end of this device in with the baby and keep the speaker near you when the baby is sleeping. You will know right away if he wakes up.

When: When baby is born.

Cost: $30.

Nursing pillow:

This pillow is a firm U shaped pillow that is placed on the mother’s lap and helps hold the baby up for breast feeding. Here is a link to a rather nice looking pillow. This is more of a personal choice since theoretically any pillows will do, but we found it worked quite well and would recommend one.

When: As soon as the baby is born.

Cost: $40.

Baby Swing:

I have friends who swear by their baby swings and said that it helped calm the baby on many occasions. Our little guy however, didn’t seem to like it that much and we found it awkward getting him in and out of the one that we borrowed.

When: Probably not before three months.

Cost: $100.

Baby Bath:

We borrowed one of these from friends and liked it quite a bit. It’s definitely not essential since you can use any large basin in the beginning or even the sink. Once the kid gets a bit bigger and can hold his head up – probably around two months then you can just wash them in the regular tub.

When: As soon as that baby is born.

Cost: $30.

Pack and Play portable crib:

I would rate this as almost essential. You don’t really need one for your own house although they are very useful, but if you are going to travel anywhere with a child that is mobile and normally sleeps in a crib then it is essential since you won’t be able to bring the crib with you.

When: Once kid starts to get mobile.

Cost: $60 for a small one at Zellers.

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Baby Expenses

Baby Expenses VI

The post is part of the Baby Expenses Series. See the entire series here.

This is a list of items that either we used or things that I know people typically get with a new baby – I’ve indicated whether I think it’s mandatory and the timing of when you need it. I’ll put an approximate price for new items which is generally on the lower end – you can spend much more if you want. I’ve split it up into a number of posts which is in keeping with my tradition of not having excessively long posts.

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Changing table:

I would say these are useful but to be honest we never got one because we figured we would just change Junior on the floor until we got a table and we liked the floor option. Once the child starts rolling then it’s definitely safer to change on the floor. We just put a towel and a change mat on the floor and that worked fine.

When: If you’re going to get one then you should have it when the baby is born.

Cost: I saw a nice one at Sears that had a couple of shelves underneath for $129.

Change mat – mandatory:

You need one for the diaper bag one for changing diapers at home regardless of where you change them. You put it on top of whatever you’re changing the baby on and then put the baby on the change mat.

When: When baby is born.

Cost: Cheap – $5?

Dresser – I saw an ad recently for a used crib set which included a crib, mattress, cradle, change table, dresser (matches the crib), valance and wall hangings (what the hell are these for?) which they paid over $2300 for new and were now asking $600. All I can say is that a dresser is necessary because you will end up with quite a few baby clothes and will need a place to store them, but the condition, age and colour of said dresser doesn’t matter at all. We used a simple dresser that I had purchased in university for $20. It has been repainted a couple of times but it works just fine and looks great, even if it doesn’t match the crib.

When: Ideally you should have one by the time the baby is born, but you can get away without one for a while.

Cost: $100 at Zellers. You can spend a lot more if you want, especially if it’s part of a fancy set.

High Chair – mandatory:

You need this for feeding the little girl/guy. Normally they don’t start eating regular food before about 5-6 months but we started to put our guy in it around 3 months so that he could hang out with us at meal time.

When: 3-6 months old.

Cost: $100

Booster seat:

This is a seat you strap onto a normal chair so that Junior can sit at the table with you if you don’t have your high chair handy. We got one of these when Junior was about 7 months. They are pretty useful if you are going out somewhere and want to feed him (ie a relatives/friends house). Also good if you have visiting babies who are hungry and need a place to sit.

When: Six months or later.

Cost: $35.

Baby gates:

These will be essential once the baby starts to get mobile which is normally around 7-12 months. From the time our baby starting being able to move around a little bit, it took about a month before he could crawl so we had lots of time to think about baby gates. There are different types of gates – the best type is where you screw the hardware in to the wall/trim and attach the gate. This type is mandatory for the top of the stairs. There will be a bit of damage to your walls/trim but that’s nothing compared to the damage the kid will do when they get older. You can probably install one of these in about an hour or so. Another type of gate we have doesn’t screw into the wall but instead has four bolts that can be adjusted to get the gate to stay up. The last type we have which we didn’t use was a sliding plastic gate. You are supposed to put the gate in the doorway, open it up until the pressure holds it in place and then lock it in position. This might work in a house where the door frames are approximately 90 degrees but in our 90 year old house it was useless.

When: Probably not before six months and sometimes well after that. I would wait until the kid starts to move a bit before worrying about these. They do get in your way so there is no point in putting them up before you need them. This also applies to the baby proofing. Don’t stress out about this, you will have plenty of time to prepare an area of the house so it’s safe for baby and you can relax and watch them play. Don’t try to proof the whole house – impossible.

Costs: $70 at Ikea – very nice ones. We used five in our house, but the number you will need is dependent on the house configuration as well as how much of your house you want to baby proof.

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Announcements

Carnival of Personal Finance TTINF Edition

I entered another submission into the carnival which is hosted by My Open Wallet this week. She did a great job organizing the carnival and even picked my entry as an editor’s choice.

A couple of other blogs I follow also have postings in the Carnival – Million Dollar Journey entered his post on his Centurion credit card which he denies owning, and The Financial Blogger pans a Trump/Kiyosaki book entitled “Why we want you to be rich” – as if they really care how rich you or I am!

My post also got mentioned in a carnival roundup on a new blog called The BagLady which looks like an interesting blog.

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Baby Expenses

Cribs and Bassinets – Baby Expenses V

The post is part of the Baby Expenses Series. See the entire series here.

This is a list of items that either we used or things that I know people typically get with a new baby – I’ve indicated whether I think it’s mandatory and the timing of when you need it. I’ll put an approximate price for new items which is generally on the lower end – you can spend much more if you want. I’ve split it up into a number of posts which is in keeping with my tradition of not having excessively long posts.

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Crib – mandatory
Not much explanation necessary except that some cribs also convert into beds which will extend their useable life. [EDIT] As Brip Brap pointed out in the comments, try to get a crib where the side is quiet and easy to lower and raise. This makes a huge difference with most babies. [EDIT]

When: Sometime between birth to about six months depending on when you want to put the baby in the crib. We started using a crib around the 3-4 month age. Some people put the kid in the crib right away. I think the reason a lot of people don’t use the crib from the beginning is because if you are breast feeding then in the first month or two there will be many late feedings and it’s easier to get the kid out of a bassinet or basket or side bed rather than a crib.

Do not put the child in bed with you. The risk of SIDs is higher, you won’t sleep as well and as one of my friends found out, if you try to take a kid who’s used to sleeping with his parents for several months and put him in a crib – he won’t be happy!

Cost: Zellers has a basic crib for $129 and a mattress for $50. You also need a couple of mattress sheets. We paid about $300 at the Bay for a rather nice looking one (on sale) plus about $100 for a mattress. Part of this was paid for with a gift certificate we received and the remainder from my mom 🙂. Just so you know, we went through the hassle of getting two hand-me-down cribs but one of them didn’t have any hardware and the other one was broken and you couldn’t lower the side properly. After that we decided to buy a new one. We also paid about $35 dollars for delivery. The box that the crib comes in is fairly large and it wouldn’t fit in my smallish suv only because I couldn’t put the full backseat down because of the car seat. This might be a good reason to get the crib (if you buy new) before installing the car seat. If you buy a used one then make sure it fits the new standards and isn’t too old (should be build in 1986 or later).

Bassinet or co-sleeper

A bassinet is basically a small bed (or cradle) which you can put on the floor beside the bed. A co-sleeper is kind of like a crib with one side open. They are set to the same height as the bed and make for very easy access to the baby. We didn’t have either of these because we borrowed a basket which had a foam layer on the bottom from some friends. It was pretty good because it had a handle and you could carry him around in it if necessary. This is one area where you really don’t need to spend much if you don’t want to. The first few months the kid can’t move so any kind of container (cardboard box?) will do. In my case I was an unexpected twin so I spent my first few months in a drawer lined with blankets and I turned out just fine (I think).

When: Immediately. Whatever you end up using, you should have this prepared before the birth.

Cost: $50 for bassinet, $200 for co-sleeper, an old drawer…priceless!

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Baby Expenses

Car Seats and Strollers – Baby Expenses IV

The post is part of the Baby Expenses Series. See the entire series here.

This post starts a list of items that either we used or things that I know people typically get with a new baby – I’ve indicated whether I think it’s mandatory and the timing of when you need it. I’ll put an approximate price for new items which is generally on the lower end – you can spend much more if you want. I’ve split it up into a number of posts which is in keeping with my tradition of not having excessively long posts.

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Car seat and Stroller – mandatory:

We bought a car seat / stroller combination for about $300 from Zellers which worked very well for us. Basically the car seat clicks into the base which is installed in your car and it also clicks into the stroller. The benefit of this system is that you can strap junior into the car seat inside your house, bundle him up if necessary and then carry him out to the car or the stroller. If you are going somewhere, you can take the seat out of the car and the baby can just stay in the seat while you are shopping or visiting. One of the downsides of the newborn car seat is that it will get outgrown in the first year.

This type of stroller is quite large so we just keep it at home since it takes up a large portion of the trunk. It’s great for grocery shopping and walks around the neighbourhood. We also bought an umbrella stroller for $14 from the Bay which we keep in the car. Check the age on any stroller you buy – umbrella strollers can’t be used with newborns for example. They have to be about 3-4 months old and be able to keep their heads up.

There are many options for strollers/car seats. A lot of people buy them separate which is fine – I’m not sure if one option is better than the other although buying them separately will give you more choice of strollers. You can buy a jogging stroller if you are always on the move. One thing about newborn strollers is that you can spend anywhere from $100 to around $600 or $700 for a deluxe one and then spend a lot more on the extras (rain cover etc). Personally I don’t see the value in spending more than you have to on a stroller since they all do the same basic job. Car seats can be purchased used but they can’t have been involved in a car accident or be more than six years old, so this might be an area where you might want to just buy it new unless you can be certain of the age and condition of the seat you are buying.

You can also buy a car seat which will be used from zero years to several years old (second car seat) but the downside is that you have to strap the kid into the seat in the car which is harder to do with a newborn. For a winter baby especially, it’s easier to bundle him/her up inside the house and then carry the car seat out to the car. Financially it’s cheaper to just buy the second car seat right from the beginning.

When: You need the car seat to bring the kid home from the hospital so this should be a top priority. I recommend getting the police to inspect the installation and that will take some time. They have events organized where you can bring the car with the seat installed and they will basically reinstall it for you. If you can’t get it inspected before the child is born then do it after – better late then never. Always install the seat where there is no air bag in front of it. The stroller should be purchased before birth as well because you’ll probably need it fairly soon once the child arrives.

Cost: Total cost for stroller, car seat, and umbrella stroller – $325.

Second car seat – mandatory:

Depending on how fast your kid grows, she will outgrow the first car seat sometime in the first year. The second car seat will last a lot longer since it can be rear-facing, forward facing and also act as a booster seat. This installation can also be inspected. I would suggest trying to get the type of seat where you can adjust the top strap height without taking out the car seat since that is a lot of work.

When: Sometime in the first year.

Cost: We paid $230 at Sears.

For more information on car seats, check out the Ontario Government website on the subject.

There are too many options when it comes to car seats and strollers and it’s easy to get overwhelmed with the choices. Bottom line is they all do the same thing so don’t worry too much about making the perfect choice.

In the next post I’ll talk about cribs and bassinets and co-sleepers.

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Baby Expenses

Mistakes for New Parents to Avoid

The post is part of the Baby Expenses Series. See the entire series here.

So you’re having a baby! Congratulations, as a father of a one year old boy I can tell you that it’s a very exciting, fun, stressful and difficult time but it’s definitely worth it.

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Having a baby will most definitely make a difference to your family budget, but you can reduce the impact by being organized, knowing what items you need and when you need them and by obtaining used items instead of new.

One of the first things that a lot of couples do when they find out they are having a baby is they start setting up a baby room and buying clothes, toys etc. This could involve cleaning out an office or storage room, painting etc. It also means making a list of items that will be necessary for the baby and then going out and buying them.

Some of the mistakes that people make are as follows:

1. Buy too many items – If you go shopping at a large retailer or baby store you might notice that along with the standard crib and high chair that your parents probably raised you with, you can spend thousands of dollars on additional items that may or may not be of good value.This is something that is hard to avoid because a lot of couples – especially the mother-to-be want to do everything they can to be ready when the baby comes.The problem is that if they spend too much time thinking about baby stuff then they will end up buying way too much junk because they are afraid to leave anything out.Best advice here is – stay out of the damn baby stores!I don’t care how frugal you are or if your heart is made of steel, you won’t be able to resist the lure of buying a funky outfit, a cute hat, cool shoes, t-shirts with funny sayings or logos of your favourite hockey team, “educational toys”, kids books, sunglasses, diaper wipes warmer (yes, there is such a thing!).Going into those stores is like flirting with the Borg – resistance is futile!

2. Buy everything new – This is definitely a big mistake. We were fortunate enough to be able to get most of our clothes and a few bigger items from various friends who had older children. If you can get hand-me-downs for free or buy items used, you will save a lot of money.If you don’t like the idea of your child wearing someone else’s used clothes then get over it – once you see what your child does to those clothes and how it all washes out then you won’t worry about it.I would estimate that you can buy everything you need second hand for probably 10-20% of retail value which is a huge savings.And if you can get some of the items for free, then you will save even more.

3. Buy things in a hurry – Even if you decide to buy everything new, you can still find bargains if you take your time and don’t do one hurried shopping spree the day after the child is born. If you want to buy used items or get them from friends or relatives then you need to take the time to do this properly. There are a lot of items that you’ll need for the baby’s first year that you won’t need when the baby is first born so take the time to figure out what you need in the beginning and go from there.

4. Don’t make good use of goodwill – One thing you’ll probably notice is that friends/co-workers/neighbours and especially relatives will want to help out. This could come in the form of items they don’t need anymore so get the word out! Also – these requests often come towards the end of the pregnancy so if you are going to buy retail – don’t buy it too early. Keep a list of what you need/want – that way you can make the best use of things like showers and grandparents who want to help. If there is a shower for you and you don’t give any guidance as to what to buy then you will end up with a whole bunch of cute dress up outfits complete with tap dancing shoes which might never get worn.

5. Spend too much time & money renovating the baby room -If the new baby room has old paint of a colour you don’t like and the floor is a bit worn then go ahead and fix them if you want – however keep in mind that the best place for a newborn baby is in the parent’s room but not in the bed.Different parents will do this differently but we had our son in a basket on the floor beside our bed for about three months.Then we set up the crib beside our bed and he slept there for about two months after which we moved him to his own room.The only time we went into his room during the first five months was to get his clothes.Even once he started sleeping there, neither of us spent much time in the room with him unless we were trying to get him asleep.It’s definitely not a waste of time to paint/fix up the baby’s room but if time is an issue then don’t bother with it.Your baby won’t care and it won’t affect your parenting.

In the next few posts I’ll go through all the items that I think are essential as well as the nice-to-have items.

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Baby Expenses

Dealing With Less Income – Baby Expenses II

The post is part of the Baby Expenses Series. See the entire series here.

This baby post was unplanned (pardon the pun) – it resulted from a comment left on yesterday’s post.

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Money Gardener left a comment in yesterday’s post asking how I handled the lack of income while I was on parental leave – quick answer is “not very well” 🙂.

The good news is that it was more or less temporary because I got a “top up” from work during my time off, the only catch is that I didn’t get the money until I went back to work but taking a short term loan to cover was not expensive. Between getting EI benefits and the top up (100%) I ended up getting full pay although I had to wait a while to receive it all.

 

A more typical scenario involves the mother taking a big financial hit by not getting paid for a year except for EI payments. Even if they get a top up from work, usually it only lasts for a fraction of the maternity leave. For dad to take even a month off at no pay (I’m assuming no top up), it might be pretty tough. Unfortunately there is no easy way to handle this.

 

Although it’s different for every family, this is the one time I would suggest that taking on some debt to cover a short unpaid parental leave (say one month) might be worth it. My reasoning for this is that you won’t get too many opportunities to take parental leave so you should try to take advantage of it. Once both parents are back at work then they will be getting their full pay (minus daycare) so the extra debt can be dealt with then. Obviously if your finances aren’t very strong to begin with then this might not be a good idea.

Most of my friends who had similar situations basically cut back expenses as much as they could, borrowed if they had to, even cashed in some rrsps if necessary (this isn’t such bad strategy if mom’s income is low for that year, although it should be avoided if possible). I also know people where the mother had to go back to work early because they couldn’t afford the one year maternity leave.

My best advice for couples who are thinking about having kids sometime in the future is to work on improving your finances as much as you can. The better shape your finances are in, then the more options you have when it comes to things like maternity leave and parental leave.
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Real Estate

5 Ways to Make (or lose) Money With Investment Properties – Part 4 – Taxation

Go the first post in the 5 ways to make money with investment properties series.

I haven’t had personal experience with this part of making money with real estate, but everything I read and hear seems to make the case that its typically a significant part of an investor’s return.

Once I read that basically the more “unusual” whatever you’re doing is, the better the taxation. At a certain level this makes sense, the government is best served by getting the biggest chunk of the largest amount of economic activity. Based on this idea, the advice was that the more “typical” an activity (like working a 9-5 job), the heavier the taxation. Real estate investing is hardly new, but not everyone does it, and therefore its given a bit of a tax break. Additionally, its viewed that there’s a positive outcome for society (increased amount of shelter) and its worthwhile on that basis as well for the government to encourage the activity.

Go the first post in the 5 ways to make money with investment properties series.

Anything you spend on your property is typically a deduction (i.e. you don’t pay tax on the money you earn to pay for that). So if you pay $1000 to get your property re-painted, you won’t have to pay taxes on $1000 of rental income (since you spent it on the property instead of putting it in your pocket). SOME people exaggerate their expenses to keep more of their money from being taxed, but I think this is a very bad idea (if you want to pick a fight with someone, don’t go after Revenue Canada!).

The real advantage (which I’m looking forward to) is the ideas that you can “depreciate” your property. Say you had a rental property that had earned you $250 / month ($3000 over the year). Typically if you were in a 40% tax bracket you’d owe $1200 in taxes on this money. What depreciation lets you do is assume that the value of your property declines over time. You get tax savings based on this decline. When you sell your property, you pay capitial gains taxes on the sale price – the purchase price + the depreciation. Thus depreciation lets you defer taxes until you sell the property (which its obviously better to pay the taxes in the future instead of right now). ADDITIONALLY, depreciation lets you not pay taxes on income, and instead pay it later as capital gains (at half-rate) (Please see the comments, I misunderstood this).

Obviously I don’t have the best grasp on this yet (I’m planning to take the H&R block course this fall so that I’ll gain a better understanding), but the basic ideas that real estate investors all seem to agree on is that you pay a lot less taxes on money you make from real estate then money you make from other investments.

Ways that you might abuse this concept to lose money is when you pay for a deduction (e.g. if a real estate deal is a bad deal, doing it for the tax deduction is probably a bad idea). Also, if you get too caught up in this idea and start doing illegal things (again, a very bad idea), you might be trading slight gains for jail time (no fun).

Go to the next post in the series buying at a discount.