Pregnant Financial Pause

"We went from two incomes supporting two people to one income supporting three people!" - Leigh, 31, mother of two

It's a topic that prenatal classes don't cover and that financial planning books generally choose to ignore: just how dramatically your financial priorities can change once you decide to take the plunge and become a parent.

It's not difficult to see why your priorities tend to evolve once you start having children. For the first time in your life, there's more to consider than how much money you have to spend on eating out or sprucing up your wardrobe. Suddenly you have to start thinking about heavy-duty financial issues like life insurance, RESPs, and mortgages.

Cindy, 40, who gave birth to twins five years ago, found that the financial changes brought on by parenthood were huge: "We went from buying grownup toys to children's toys: from planning exotic vacations to planning for family fun time and from buying leather pants to buying plastic pants! Did starting our family require a big financial adjustment on our part? In a major way!"

Some couples find that they start rethinking their financial habits the moment the pregnancy test comes back positive.

"Overnight, our priority became the children," recalls Diane, a 29-year-old mother of two. "All our money was spent on things for the baby and what the baby might need in the future."

"Before becoming pregnant, I was quite relaxed about money and only had myself to worry about," adds Stephanie, a 26-year-old mother of one. "Staring a family made me want to have an emergency fund–to start putting money away as savings, something I had never done before."

"Having a child changed how I thought about financial matters," notes Christine, 24. "Before that, I was in university, having fun and living life to its fullest, but with the birth of my daughter, I realized that I had to start saving money, spending less on myself and spending everything on her. Mutual funds, education plans, life insurance–these became my priorities."

Your financial habits are likely to undergo a more dramatic transformation if you and your partner decide to go from two incomes to one after your children arrive.

Kathie and Dan, 40-year-old parents of two young children, made debt reduction a priority once they knew that there was a baby on the way: "We really focussed on paying off my husband's student loan prior to leaving my employment in order to eliminate the burden of that debt," Kathie recalls.

For Melinda, a 33-year-old mother of three, the emphasis was on reducing household expenses: "After our first child was born, we sold my car. We had to re-learn our spending habits and figure out how to cut corners everywhere."

Of course, not everyone has the luxury of getting their financial house in order prior to starting a family. If, as is the case with many couples, your pregnancy is unplanned, the financial fallout can be considerable. "My family was started by accident," says Heidi, a 23-year-old single parent. "It was a totally major adjustment for me. I was living with my mother, making $12 an hour, and spending every cent I earned on whatever. I didn't have a car or any real bills. I had no concept of bills, rent, daycare fees, groceries, etc. I did not budget for anything. It was only after my son was a year old that I finally managed to be self-reliant and move out of my mother's house."