Parenting on a Budget

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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!

11 Responses to “Parenting on a Budget”

  1. We opened an Resp for our daughter soon after she was born. She is 16 now and in grade 11. Her RESP with one of our local banks, has done very well. If she lives at home and goes to the local college or university she will have enough to pay for her tuition, books, and fees. If she chooses to go away, then she will incur student debt. She is also responsible for her spending money. So far she is leaning towards staying here. Most of her friends are leaning towards staying as well. She had to work out the cost of education in her chosen field as part of her careers and civics class so that opened her eyes quite a bit.

  2. We this to open an resp for our newborn but the bank wanted a minimum of something like 25 k in it before waiving the account fee.

  3. I have used the RESP extensively, it is a great program, but make sure you find a saving program that works for you. You can either have a straight Mutual Fund one (where your fees and expenses are all hidden from you) or you can go with an actual trading account (Questrade, BMO, TD, etc.,) where yes you will be charged a fee, but you will also be able to invest in whatever you want, as well.

    It helped us a lot with my 3 daughters, and I have one open for my son, we shall see if he gets to college or not.

    Kids are expensive and the best investment I have ever made.

  4. Until people realize that kids are a WANT and not a NEED they’ll keep overpopulating this planet. Did you know that over 230,000 are born a DAY, not a week, a month or a year but a day! There isn’t enough food on this planet to keep them all alive. There are kids which are dying and those who need good homes. PLEASE THINK AND ADOPT!

  5. @Bridey, Canada’s fertility rate is 1.61 which is far below even population maintenance let alone growth! Perhaps you should direct your comment at individuals in a country where there are 8 births avg per family?

  6. I think that we need to look at this world as a whole not on a country by country basis as that’s a very elitist view. We are all humans inhabiting this planet and we need to adopt those who won’t have a good life. I’m directing my comments at everyone and those interested in making a difference on this planet. Don’t look at Canada as a single entity. We can all make a difference and thinking we can’t is a huge global issue.

  7. All developed nations have falling birth rates and most are below replacement level. If someone in a any nation wants to have their own child and can afford to then that is a fantastic thing. If you want to adopt that is also great! The whole point of Gail’s post is to budget for your children so you are living within your means and not going into debt.

    Stating the fact that first world countries do not have an overpopulation/pop. growth problem is not elitist. What is elitist, however, is trying to impose your own will on individual reproductive rights. Examples of governments who did this include Nazi Germany and Communist China.

    Also, since its mainly 2nd and 3rd world countries with “over-population” problems (I dispute this too, as they more have distribution/corruption and lack of education problems) it is elitist to assume that they can’t take charge of their own family planning and require those in the 1st world to save them and the world from their many offspring (and elitist by placing yourself on a pedestal to say that those in the 1st world are being *selfish* by having their own children).

    Lastly, if you are actually worried about overpopulation in the world the solution is not to screech at random decent people on a blog comment section about the perfectly normal and positive want to have a child, especially if you can afford to . The solution is Education. It is been proven time and time again that Education, specifically education of women, is linked to falling birth rates. If you really want to make a positive change in the world (alleged overpopulation or not), go help fund or actually help educate women in developing countries.

  8. avatar M Edwards Says:
    October 21, 2015 at 9:49 am

    Thank you Lauren, for that fantastic comment! Couldn’t agree more.

  9. Lauren: thank you for the wonderful comment. you have it exactly right.

  10. Wow I really love your terrible attitude towards compassion and the other people in this world.

  11. What a great article Gail! I love that you mentioned watching your kids was your entertainment. I love watching my 6 month old do her thing, all the small achievements are wonderful to see. Great advice about RESPs

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