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After Baby Is Born

To learn about how the 2007 Federal Budget changes affect the tax policies described in this article, read Manulife's 2007 Federal Budget Summary .

Will you need daycare for your baby? This one of the toughest questions some new parents face as they weigh their career goals and family income requirements against their desire to stay home with their baby.

You can look at the matter from a variety of angles, balancing logic and finances against emotion to come up with the answer that is right for your family. Here are some key considerations:

• The cost of working. Transportation, clothing, dry-cleaning, lunches, coffees and socializing all add up. Deduct that from your income.
• Your career path. If you take time off now, will it be hard to find a good job in your field when you're ready to go back?
• Other children. If you want a large family, you might choose to just stay home permanently as the mounting cost of child care becomes prohibitive.
• Your happiness. Some people love being at home with children. Other people miss the intellectual challenge of work.
• The cost of child care. This will depend on where you live, the type of care you choose and the age of your child. Outside of Quebec, group care for an infant, 18 months or under, will almost always cost at least $1,000 a month. Home-based care may be cheaper, especially for older children, but count on at least $600 to $1,000 a month per full-time child.

Remember that you're paying for daycare with after-tax dollars. So if your salary is normally $40,000 gross, you take home more like $26,000 net. If child care is $12,000 a year, you really have more like $14,000 left. (Despite their deductibility, child care expenses can still be a significant out of pocket expense, particularly if these expenses exceed the deductibility limit.)

Finding the best place

If you do decide to return to work, you'll need to make daycare arrangements. Some new parents are lucky enough to have grandparents willing to step into that role. If you're not one of them, you'll probably want to spend some time finding the best place you can afford — well before it's time to go back.

Hands down, the best way to find information in your community about daycare options is word of mouth. Talk to people who already have children in daycare. Chances are they'll tell you about places to steer clear of and places to consider.

"Always, always check references," is the advice about daycare selection given in Your Child: Emotional, Behavioural and Cognitive Development from Birth through Preadolescence (edited by David B. Pruitt, M.D.). “If you are interested in at-home care, look for someone who is capable of nurturing and of using mature, intelligent judgment."

If group care is your preference, they advise you to look for a centre that is staffed with well-trained caregivers who treat each child as an individual.

If you think you'll return to work, do the legwork now to find the right daycare. You'll feel better knowing your child is in good hands.