Parenting on a Budget
Kids are expensive. Never mind what some people are prepared to spend to get them here, getting them to “independent” can cost a small fortune. You may need a bigger car. You may need a bigger home. And then there are all the costs of keeping your mini-me fed and clothed: dental bills, school supplies, hockey, ballet, soccer, karate… the list can seem endless.
The first year of a child’s life is often pretty expensive. Not surprising really when you think of all the gear we have to get to bring baby home. And the cost of diapers!
It’s also comes as no surprise that costs go up when kids hit their teenaged years. So how do you get your kids to self-sufficiency without going broke? You make a budget!
While many of the hard costs of kids – food, the roof over their heads, their transportation – naturally fall into your budget, there are costs that are uniquely associated with the children themselves. One kid is happy to live in jeans and T-shirts, while another won’t wear anything but American Eagle. If Junior is a sports maniac there are league fees, equipment costs, and transportation costs for getting them to the next game. Never mind all the eating out the family seems to do on the road.
The trick to not letting kids’ expenses get way out of hand is to allocate a specific amount to each child’s activities and needs, and stick with the plan. Start by listing all the things your children do for which you must lay out some of your hard-earned bucks.
Your children’s needs won’t be the same, and spending equally on them won’t be more “fair.” Giving them what they need when they need it is the goal. Over time, as the children’s needs shift, so too should how you allocate the money. And over time, it should all come out even. So if in the early years one child gobbles up far more resources, then in the later years the other might receive more help with post-secondary education.
Some parents struggle with meeting their kids’ needs while staying afloat financially. If you’re a single parent or your family is living on one income make darn sure you’re claiming the eligible dependent amount on your tax return.
There are lots of other expenses that may be claimed on your tax return to mitigate your costs. Paying for a babysitter? Sending your kid to camp? Claim child-care expenses on the lower net income to get the biggest benefit. Get and keep your receipts to make your claim stick if it’s challenged. And don’t forget about the child fitness amount of up to $500 per year per child 16 and under for everything from soccer to gymnastics. The activity has to be ongoing for a minimum of eight weeks or a camp that is a minimum of five consecutive days.
Your kids’ budget should include a regular amount set aside for educational savings. If you start early, you don’t have to set aside a lot, and each dollar you put into an RESP can help your child earn up to $500 a year in FREE grant money.
Don’t make enough money to save for school? If you receive the National Child Benefit Supplement, and Kiddo was born in 2004 or later, you can get up to $2,000 in free money. Get a Social Insurance Number for your kid, open up an RESP and apply for the Canada Learning Bond. You’ll get $500 in the first year and up to $1,500 more by the time Kiddo turns 15. When shopping for an RESP, make sure you stick with an individual or family plan offered by most financial institutions. Steer clear of the group plans or “scholarship trusts”, which have come under fire for being both expensive and inflexible.
Kids are expensive, no question. We sacrificed fancy furniture and vacations in the early years. And my entertainment was sitting and watching my kids as they learned about the world. Those were some of my happiest years. We had a ball. I shopped garage sales and second-hand stores, shared what I had with friends, and chose one activity at a time for my kids so they weren’t overwhelmed and I didn’t go broke.
It’s all about the choices we make and about figuring out what’s most important so we can prioritize those choices. Kids don’t arrive in designer labels, and they don’t much care about stuff until someone teaches them to be concerned about what other people think. Dodge that bullet and you can save yourself a fortune!