When my wife and I were considering when we wanted to have our first baby, we had one big question: How much does it cost to raise a child?
What it Costs
It costs approximately $182,190 to raise a child, according to my research.
I used numbers form a 2004 survey conducted by Manitoba Agriculture, and averaged the separate costs of boys and girls (you’ll spend $500 more for food for boys over their childhood). I then adjusted the numbers based on the Bank of Canada’s inflation calculator.
The total cost from birth to 18 years was $182,190, and that’s not including any savings you’d like to put into an RESP for their secondary education. While every year of the average childhood costs fell within around $7,500 to $11,500, it’s in looking at the breakdown that we found ways to save money.
How to Save
Childcare – from infant to age 11 – will cost approximately $59,425.
To save on these costs, we’re hoping my wife will stay home until the last child we have turns at least three. After that, she would like to take on a part-time job, which allows her to pick up the children after school and be there for them at home. While these choices obviously reduce our total income, they also go a long way in reducing, or possibly eliminating, all childcare expenses.
First-year food expenses costs approximately $1,645.
We were able to save money in this area, too. My wife started by breastfeeding our boy; once he turned six months old, we prepared homemade baby food. While it may sound like a lot of effort, it’s actually quite simple. I pick up extra veggies (yams, peas) at the store, and my wife steams and purees them (for about 30 seconds with a hand blender).
The savings: We can pick up a bag of carrots – on sale – for about $1. This makes 10 portions, whereas manufactured baby food could cost $1 per jar! Not only do we save money this way but we are also feeding our son healthy fruits and veggies without any added sugar or salt.
While we all know having a child isn’t cheap, we found that it’s good to be prepared and to look for ways to better manage our money before our little boy arrived.
Tom Drake is the owner and head writer behind Canadian Finance Blog and also works as a financial analyst for a major retailer. Tom and his wife Amanda welcomed their beautiful baby boy Christian in October of 2009. To read more of Tom’s posts, subscribe to Canadian Finance Blog’s RSS feed and follow @CanadianFinance on Twitter.