Raising children is a big financial commitment and usually means having to manage on less money.
The cost of diapers, clothing, baby equipment and child care can quickly throw your financial plans off track and put a strain on your family budget. Even when your child is old enough to go to school, you may still have expenses for after-school care, summer camps and other activities.
Consider your new financial responsibilities and make a plan for how you will handle them.
Updating your financial priorities
- Look at your goals for the next five years. This will help you identify your priorities for saving. For example, do you need to move to a larger home, get a new car or save for a trip to visit the baby’s grandparents in another part of the country? If you need help planning your financial goals, use FCAC's Financial Goal Calculator.
- Identify lower priority items where you can cut costs to free up money for new expenses such as diapers, baby gear and child care. You will probably need to make some trade-offs.
- Consider how your family would manage if something happened to you. You may need to review your insurance coverage.
- Think about how your priorities may affect your household income in the future. For example, if one parent plans to stay home, you will be able to avoid child-care costs but you may lose valuable pension contributions from your employer or have less money to contribute to your Registered Retirement Savings Plan (RRSP).
- Start saving for your child’s education early to give your savings time to grow and make it easier to reach your goal.
Consider putting any government benefit you get for your child, such as the Canada Child Benefit, into a Registered Education Savings Plan (RESP) now.
- Adjust your budget to take into account savings towards your financial priorities and these new expenses.
Next: Preparing financially for a baby
Plan ahead for the costs associated with having a baby.