News & Resources

Baby to Teen: The Costs of Raising a Child

Aug. 30, 2012
3 mins
mom and daughter snuggle on couch in bright modern living room

When it comes to kids, here's the cold, hard truth: it costs roughly a quarter of a million dollars to raise a child from birth to their 19th birthday. Have you picked your jaw up off the floor yet?

According to a recent MoneySense article, which factors in the cost of food, clothes, medical expenses, shelter and post-secondary school, that equals to about... $1.45 an hour!

For any soon-to-be parent, this can be pretty scary - which is why it's so important to start a good savings practice for each child as soon as they are born - this will ease the financial burden and prepare you for some of the bigger expenses each child will cost you.

Baby's First Year

Your first child can cost up to $10,000 in the first year, according to a survey by Babycenter.ca. Since certain items are essential in order to bring a newborn home, the initial set up  of a nursery, wardrobe and toys can be very expensive. The good news? The cost will come down for the next child - as long as parents are willing to re-use that baby gear.

Start Saving For School - Now

This is the expense that most parents worry about, and for good reason. The best way to save for your child's education is to open a Registered Education Saving Plan as soon as they are born. The money in this account grows tax-free and the government tops your saving by up offering up to $7200 in grants by the time your child is 18.

Medical Costs Can Really Add Up

The cost of braces alone can be $4500. Without a dental plan, this can be an expensive necessity for many parents. While health care is covered in Canada, the cost of prescription drugs and most dental procedures isn’t. Don’t be fooled by work drug plans - when our daughter was born, adding her to my husband's health coverage at work cost almost $75 extra a month.  Whether you have coverage at work or are paying upfront, the money is still coming out of your budget

Extra-Curricular, Extra Expensive

Hockey is expensive - so is ballet. Enrolling your children in after-school and summer programs year after year ensures you will be spending thousands by the time your child finishes high school. If you are spending even $300 a year on after school programs and you have two kids, that is a more than $10,000 expense.

The  Child Care Conundrum

The cost of daycare in Canada can range anywhere from $15 to $50 a day. For parents who are both working, this can translate to a significant chunk of their income. For example, $30 -a -day childcare can cost parents close to $75,000 by the time their child is 11-years-old.

Calculating Housing Costs

While housing costs range widely depending on your abode of choice (and if you rent or own), you can count on $2720 a year for shelter for your child, including the cost of furnishings and other household goods. By the time your child reaches 18, shelter will cost you $51,680.

Food - The Bottomless Money Pit

A family of four spends more than $10,000 a year on food - and this cost increases with each child, and depends on the types of food each family buys. Experts estimate the cost of food will rise by 4% next year, making every visit to the grocery store more expensive.

These costs are all averages and each individual family’s costs are going to differ, but the message is children are expensive. Soon-to-be parents, or those wanting to expand their family, should take a good look at their financial situation and see where they can cut back and save money. Being a parent is a rewarding experience that is priceless - but it’s still important to make sure you're in the best financial situation to handle this incredible responsibility.

Rubina Ahmed-Haq

Rubina Ahmed-Haq is a financial journalist and personal finance expert with more than 15 years of experience. Her career spans three continents with appearances on TV, radio, print and online. She is the Finance Editor for HOMES Publishing. You can also read her columns in CondoLife and Active Life. Rubina runs the website www.AlwaysSaveMoney.ca. She has also contributed on personal finance matters at The Toronto Star, The Globe and Mail, National Post, CTV Newschannel, Mississauga Life Magazine, Masalamomma.ca, OurKidsMedia, CAA Magazine, South Asian Focus TV, ANOKHI Magazine, Bridal Fantasy Magazine, Canadian Running Magazine, FRESH JUICE magazine and NEWSTALK 1010.

Latest life insurance articles

How do I know if I need life insurance? A primer for Canadians
Life insurance isn’t a one-size-fits all solution. But if you have dependents, it can be an important financial safety net for those you love.
Learn More
5 mins read
Why life insurance should be part of estate planning for new parents
Life insurance is one of the best ways new parents can protect their family and help loved ones in the event of your unexpected death.
Learn More
5 mins read
10 Myths About Life Insurance Busted – Some May Surprise You
You may be young with no kids and no mortgage. Life insurance is for someone older, who has dependents right? Wrong. Let’s debunk life insurance myths and learn why everyone needs some form of coverage.
Learn More
6 mins read

Subscribe to our newsletter

Stay on top of our latest offers, relevant news and tips!

Thanks for joining!

You'll be hearing from us shortly - stay tuned.