Before the baby arrives
Are you planning for your baby’s arrival? Congratulations!Establishing a family budget can be the perfect way to begin adapting to your future reality as parents. Taking a moment to evaluate your finances is one of many things on the list of things to do in the months leading up to the birth of your first child.
You’ll have a lot of new items on your expenses list that you’ll need to get before your child is born: crib, bedding, furniture, and décor for the nursery, stroller, car seat, clothing, play pen, highchair, pacifiers, baby carrier, baby monitor, play mat and numerous other things you probably didn’t even realize existed until now. Opting to buy used items that are often still in great shape will save you a lot of money.
The first year
According to Statistics Canada, the cost of a baby takes up 20% of the family budget. Diapers alone can be as much as $950 in the first year, plus a few hundred dollars for medications, moisturizers, and accessories, such as a humidifier.
When it comes to financial aid in Quebec, you may be eligible for the Quebec Parental Insurance Plan (QPIP). This allows you to receive a percentage of your salary during your parental leave after the child is born or up to four months before the due date. If you reside elsewhere in Canada, be sure to check the financial aid available to you with your provincial government. This will help you determine disposable income during the first few months of your new family life and adjust your budget accordingly.
You'll also need to make a choice about daycare. In Quebec, unlike the rest of Canada, it's possible to obtain a subsidized space in an early childhood center (CPE) at a fixed cost determined by the provincial government. In 2024, the cost of a subsidized space in a CPE is $8.85 per day. The price of private daycare varies.
You may be eligible for tax credits and government assistance, based on your income. Use this tool to calculate the cost of a childcare space and estimate your expenses.
From one year old to their first days at school
A young child taking their first steps will inevitably start exploring the house. Be prepared to spend at least $600 to secure your home with barriers and other safety tools. Consider also that you will have to purchase a stroller and car seat for your child—these costs can reach several hundred dollars.
A child grows quickly, and clothing, toys, and accessories will have to very rapidly be replaced. Take advantage of classified sites or even consignment shops that specialize in exchanging children’s clothing and toys. This will help you avoid paying full price for items that will barely be used.
You should also plan for daily trips to pick up your child at daycare and go to their activities or new friends’ homes. Set aside money for fun, too—systematically saving for yearly vacations or a family trip can be very helpful.
The school years
Even though public school is free, education has its own share of expenses. Set aside a budget for school supplies. At the elementary level, estimate between $115 and $175 per year. As for high school, you should expect to spend anywhere between $925 and $2,300 per year. Add to this the cost of childcare, snacks, lunches, field trips, and extracurricular activities, and a budget for sports and technological tools, such as a computer, tablet and apps.
During your child’s primary and secondary school years, you will notice that your grocery bill will change with your child’s growing appetite. The more active your child’s life, the more mileage you’ll add to the odometer. Some parents also like to give their children a small allowance.
Finally, set a budget for gifts to buy for birthdays and important life events that you’ll want to celebrate.
Here is an estimate of annual costs for a child in school, before the age of majority:
Child care and education | $2,300 |
Food | $2,200 |
Transportation | $1,750 |
Housing | $1,300 |
Miscellaneous | $950 |
Clothing | $700 |
Health care | $600 |
Annual total | $9,800 |
The life of a young adult
Your child will experience many firsts such as their first cell phone, car, trips, nights out with friends, college and university, etc. There are many new expenses involved for the 18–25 age group who, for the most part, have not yet left the family nest.
Some parents take care of a lot of these expenses. Of course, the financial impact for a child living at home and working full time will not be the same as a child studying outside of their hometown and living in an apartment without a job.
If your children still live at home from age 18 to 22, you'll need to budget between $68,000 and $117,000 more per child, compared to the $263,000 initially mentioned for the period from birth to age 17.
Impact of the number of children
Having several children means greater economies of scale. Statistics Canada's study shows that a two-child family spends 20% to 38% less per child than a one-child family. For families with three children, spending is 8% to 15% lower per child than for a two-child family. These savings can be explained by the fact that many clothes and toys can be recycled, and the same accessories and furniture can be used.
The contribution requested for daycare, even if it is based on family income, is reduced by half for the second child and any subsequent children.
In return, some expenses will be split and the impact on the family budget may be even greater if you must change the family car or move.
Tools for your family budget
Many savings products can help you meet your financial responsibilities as a parent. Consider a Registered Education Savings Plan (RESP), a joint account, insurance, and many others. There's also the Registered Disability Savings Plan (RDSP) for families with an eligible child. This program covers many types of disabilities and can be a great help.
Your advisor can determine different strategies with you to ensure your family’s financial future. Either way, one of the greatest gifts you can give your child is to teach them the value of a dollar and how to properly manage their finances.
