Can you afford kids? It’s not just a money question – it depends on your lifestyle and priorities

“Can we afford to have kids?” It’s the question on the minds of many would-be young parents.
Being able to afford having a family isn’t a slam dunk. The cost of living has shot up and job security isn’t what it was a generation ago.
On the surface, it seems to be a numbers question. Adding roughly $27,000 to your annual expenses is some serious money. But an equally important consideration is mindset: What adjustments will you make to your lifestyle and what expenses will take priority?
A 2020 Statistics Canada study showed that for medium-income, two-parent families, raising one child from birth to age 17 costs between $310,000 and $460,000. Housing is front and centre as a family grows, and deteriorating affordability weighs heavily on young people who wonder if they will ever be able to buy a house.
No matter what financial analysis we do, there are many unknowns to consider. How will your career progress? Will your child have expensive needs?
Still, there’s a lot of value in thinking it through. Taking stock of where you are financially can help you prepare for the added expenses.
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When setting any financial goal, it’s key to understand where you stand now. You should know how much your life costs and how well you can afford it. For people who are just squeaking by before having kids, it’s especially important. It doesn’t mean they can’t afford to start a family, but it does mean they need to take a hard look at their spending. This can mean fewer vacations, less eating out, owning used cars or quitting an expensive hobby. It’s different for everyone but having kids often means sacrificing the things you might otherwise want to do or have.
A practical approach is to take your current spending, deduct expenses that will go down – like your going-out-with-friends budget – and add child-related expenses. Based on the Statscan study, families with annual household incomes between approximately $83,000 to $136,000 will spend roughly $2,300 a month or $27,000 a year on one child. Of course, it might not cost that much, but this is a good starting point.
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Hopeful parents should take some time to sit and think about what they really want out of life. What’s top of the list in terms of priorities? Owning a house, travelling and planning for an early retirement are pretty common wishes. What is realistic when kids are thrown into the mix? What are you willing to let go of? Going into parenthood with some guiding principles around spending – ones that both parents agree on – will make it easier to make decisions.
As parents, having flexibility in your spending can mean a lot of things, such as being willing to buy kids’ stuff secondhand or being okay with a cheaper holiday. Having a list of things you can compromise on gives some budget wiggle room.
Many people who already have kids would probably advise that would-be parents just jump in, saying, “You’ll figure it out.” This might be true for some couples, but “figuring it out” after planning ahead means less stress and more confidence – and this can make parenting a little easier.
Anita Bruinsma is a Toronto-based financial coach and a parent of two teenage boys. You can find her at Clarity Personal Finance.