Is the cost of having kids too high? Here are some tips

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Anecdotally, credit counsellors often notice trends before they are officially quantified. For instance, Statistics Canada recently reported a low fertility rate in Canada for the second consecutive year. The financial implications of having children are significant, and given the current economic, social, and personal climate, it’s understandable why many couples are choosing to delay or forgo parenthood.

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Financially, the costs for having kids begin with obvious expenses, like baby supplies, daycare, special foods, activities, and school fees.

There are also less visible costs, such as reduced income during parental leave, the need for a home with more bedrooms, a more spacious vehicle, and saving for post-secondary education.

Despite the high costs, it’s important to remember that children are only as expensive as we make them. Raising a family on a budget can be challenging, but with careful planning and smart strategies, it’s definitely achievable. Here are some tips to get you started.

Focus on frugality and meaningful spending

Being frugal doesn’t mean being cheap. Both involve saving money, but in different ways. Frugality is about getting the best value for your money, even if it means spending a bit more upfront for better quality. It aims to maintain or improve your quality of life by making thoughtful spending choices.

For example, when buying indoor and outdoor runners for your primary school children, it might be tempting to purchase the cheapest pair of sneakers for indoor use since they won’t be used on the playground.

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However, if you stagger the shoes all your kids need, a good indoor pair with little use can become a great replacement outdoor pair. Investing in a more durable item and sacrificing immediate savings means saving in the long term due to fewer replacements.

Prioritize spending and plan ahead

It’s important to focus on essential expenses first, which will vary depending on your family’s stage of life. Housing, food, daycare, medical costs, debt payments, and transportation typically top the list. However, with careful planning, you can save in the long run.

For example, consider buying second hand whenever possible. Gently used items like clothes, toys, furniture, musical instruments, or ice skates can save a lot when your kids are growing.

Shop at thrift stores, online marketplaces, or swap with friends and family to support ‘loud budgeting,’ a trend of being transparent about spending and savings goals and limits.

When it comes to a vehicle, choosing a mechanically sound, slightly used car can give you more value for your money, especially if you keep it until your teens are learning to drive. It’s much less stressful to teach your teen to drive in a car you’ve had for many years versus one that’s new to you. Once they’re able to drive on their own, you can decide whether to share the vehicle, sell it to them at a family price, or let them use it while they pay for insurance, fuel, and maintenance.

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Stick to your budget with grocery and food costs

The expression “kids can eat you out of house and home” resonates with many parents. However, even with growing teens who eat six meals a day, snack and meal planning can save you money.

Make it fun by jotting down everyone’s favourite meals and snacks on slips of paper. Draw a week’s worth of ideas and fill out your food planner. Kids of all ages will appreciate having a say in what’s in their lunchbox or on their dinner plate. By planning your family’s meals and snacks, you can focus on sticking to your budget without being tempted to eat out or grab food and drinks on the run.

Stay flexible and prepare for the unexpected

Life is unpredictable, so being prepared for the unexpected is priceless. This means having an emergency fund to cover unforeseen events that could derail your monthly budget. These events could range from an injury or illness in the family to job loss, costly home repairs, or daycare uncertainties requiring a parent to take time off work.

Flexibility can help your family navigate these challenges.

Keep communication lines open with your family and involve them in finding ways to save. Many grandparents want to help their adult children but may not be able to provide direct financial support. Instead, they can act as backup daycare providers, pick up a sick child from school, shuttle tweens between activities, or stock a freezer with some favourite meals. Every little bit helps ease the financial strain of a growing family.

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A multigenerational approach to raising children can also reduce costs for activities or save towards future educational expenses. Instead of expensive birthday and holiday gifts, smaller gifts combined with regular contributions to RESPs or payments toward sports or music lessons can benefit both a giver’s and a parent’s budgets. These alternative gifts allow for extended family involvement and teach your kids valuable financial lessons.

Sandra Fry is a Winnipeg-based credit counsellor at Credit Counselling Society, a non-profit organization that has helped Canadians manage debt for more than 28 years.

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