Kids cost you a fortune

Kids cost a lot more money than most Canadians think.

A recent study found that the average Canadian parents will shell out approximately $255,000 on each child from birth to age 18.

This amounts to about $14,000 per year, every year, for each child that you have. But wait, it gets worse.

The amount a child costs is climbing higher every year and most parents don’t cut the bank of mom and dad off after age 18 either. The financial outlay can last much longer for some.

Just to be clear, I’m not advocating that you should avoid having kids, even if they will cost you a fortune. But I will suggest that new and soon-to-be parents take the time to properly consider the costs and build them into their financial plans.

In addition, a monthly budget can help you separate the want vs need expenses and keep more money available at the end of each month to pay down debt and save for your own retirement.   

The big budget items include clothing ($1,000/year average), food ($1,800/year average) and increased household expenses ($2,000/year average). While you can’t simply stop feeding your kids or let them roam around without clothes, there is a big difference in how much you can spend or save on some of these items.

The desire of first-time parents to run out and buy countless new outfits from the store is certainly understandable, but your child may end up wearing the outfit a few times at most if at all before they outgrow it.

considerable amount of money can be saved by purchasing used children’s clothing and as an added bonus you won’t care so much when they destroy the clothes playing outside!    

As your kids grow, the monthly food budget will likely climb as well. You can’t start skipping meals but you can still take control of the food budget by purchasing in bulk where appropriate, cutting down on wasted food and reducing the amount of times that you eat out at a restaurant.

School-related costs can be surprisingly high, even for those children in a public school. But the real sticker shock comes when they head off to University.

The amount of post-secondary financial support parents provide is unique to each family and a proper financial plan can help determine what you can and can’t afford to contribute.

As selfish as it may sound, getting your own finances in order has to take priority over contributions to an RESP account.

In my opinion, having a child is the most amazing and rewarding thing that a person can experience in their lifetime. But doing so does come with extra responsibilities.

Whether you’re contemplating having kids or already have them, proper financial planning is extremely important to help ensure that you’re doing things right.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.