It’s not uncommon that soon-to-be parents find themselves worrying about the added expenses that go along with raising a child. And considering financial worries is a leading contributor to workplace stress, this isn’t an issue you want to take lightly. Good news, you don’t need to give all the parents-to-be on your team a raise… but there is something you can do about it! Let new parents know support exists via health navigation. They can access trusted, up-to-date information through web, mobile and call centre support. You can’t put a price tag on that!
Parenting is one of life’s greatest joys, but starting a family means facing new expenses. Expectant moms and dads may worry about how they’ll afford the extra costs, from diapers to childcare to education. The U.S. Department of Agriculture estimates that it costs over $12,000 per year to raise a child, and while we have no comparable statistic, many Canadian families are likely paying this much as well. It’s possible to raise a happy, healthy child on less, however, if you adopt cost-saving strategies.
Planning Ahead
With a child on the way, you may be unsure whether you can pay for a larger house, new vehicle, or baby equipment – or if you’ll even need them. Here’s how to set your financial priorities:
- Track your earnings and expenses for a month to get a realistic picture of your family finances.
- Are there expenses you can do without? The Fraser Institute found that Canadians who are parents spend less on alcohol and restaurant meals, for example.
- List upcoming new expenses in order of importance to your family.
- Plan your new budget and set financial goals, such as paying into a Registered Education Savings Plan. (Just $100 per month can grow into $40,000 by the time your child finishes high school.)
Starting Out
The early years may include expenses like baby furniture, clothing and daycare, as well as formula if you’re not breastfeeding. Plus your household income may be temporarily reduced during parental leave. Try these money-saving ideas:
- Not all baby gear is essential. Consult other parents about what you really need. Consider borrowing some of these items temporarily.
- Make use of toy-lending and book libraries in your community.
- Consider cloth diapers instead of disposables. Credit Canada, a non-profit credit counselling agency, reports that this can save over $1,500.
- If breastfeeding is possible, you can save around $1,600 in the first year on formula.
- Look online for affordable childcare in your community and subsidies, as well as parenting programs, which can be a valuable source of additional ideas.
- Use online shopping and put in a recurring order for diapers, formula and other essentials, so you receive a shipment at regular intervals and get a discount.
- Keep gifts to a minimum (your 1-year-old isn’t going to notice if she only gets a few things for her birthday or on holidays), and save what you feel like spending in an education savings instead (and ask family members who want to give your child a gift to consider contributing).
As They Grow Up
Expenses typically increase as your child gets older. You’re now spending money on recreational activities, extra groceries, and more costly clothing and shoes. These strategies can help you continue to balance your budget:
- Shop at secondhand stores for clothes and sports equipment.
- Extracurricular activities can help kids learn new skills and make friends, but fees can be high. School clubs and teams, on the other hand, may cost little or nothing.
- Invest in a used vehicle. Choose one that’s fuel-efficient and gets high ratings in quality and value from a consumer association.
- Carpool with other parents.
- Encourage your children to make handmade gifts and cards for their friends’ birthday parties instead of shelling out for pricey presents.
- Use coupons, look for sales, and buy from discount stores. The savings will add up.
- Learn about health coverage in your province; vision tests may be free for children, for example. If you opt for a private plan to cover the rest, make sure it corresponds with your family’s needs.
- Tap into government support. Some expenses can be claimed on your income tax, including many medical costs, childcare and fitness-related activity. You may also be eligible for other benefits such as the Canada Child Benefit. You may wish to visit the Benefits Finder on the Government of Canada’s website, which includes a listing of available financial assistance programs/benefits by province.
A Priceless Experience
Families may come with a price tag, but watching your children grow into independent, resourceful adults is a priceless experience. By planning ahead and using these money-saving strategies, you can help secure your family’s financial future.
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Key Website
- Government of Canada: Benefits Finder
