Starting a Family

Starting a family is not only a financial undertaking, but a major lifestyle change as well. While finances shouldn’t deter you from ever starting a family, it’s important to know what you are getting into and responsible to wait a little while until you are in a better financial position. That being said, how much does a child cost? 


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How much does a child cost?

Estimates vary, sources like MoneySense put the cost at ~$250,000 to raise a child from birth to age 18. This averages out to ~$13,400 a year. With that being said, the average cost to raise a child varies widely and is almost a useless number. It is almost impossible, and unproductive, to predicts costs (or your income for that matter) that are a decade away. So what should you worry about? The early costs of having a child. Use an expense calculator to estimate the immediate effects a baby will have on your budget in the first few years. If you can survive those years, you will be likely to be able to manage through the rest as long as nothing like job loss gets in the way. This is because as kids get older, the necessity costs go down as they get more self-sufficient, but the luxury costs go up. An 8 year old no longer needs diapers or full time day care, but they want toys and need after-school care still. A 14 year old no longer needs after school care, but they want expensive things like electronics or extracurricular activities.

Can I afford a child?

No one wants to evaluate having a child as a financial purchase like buying a car. But like everything else with personal finance: be responsible, do the estimates and have a plan. Start saving early to have a bigger emergency fund (expanding the family means expanding the emergency fund!) and help paying for the early one-off costs of having a child. Having a child is not a financial decision, but it doesn’t hurt (for you or them!) to try to be in the best financial position you can be when you do have one!