Cost of Raising a Child: The Key Elements to Consider

17 May 2019 by National Bank
How much does it cost to raise a child

According to MoneySense magazine, raising a child from birth to the age of majority can cost up to $250,000. This amount varies based on your income, lifestyle and priorities. By considering the different stages of your child’s life, you can better plan for upcoming expenses. Here are some key elements to consider.

Before the baby arrives

When planning for your baby’s arrival, establishing a family budget can greatly help a couple adapt to their new reality. 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 will have a lot of new items on your expenses list that you’ll need to get before the birth: crib, bedding, furniture and décor for the nursery, stroller, car seat, clothing, play pen, high-chair, pacifiers, baby carrier, baby monitor, play mat and numerous other things you probably didn’t even realize existed until now. By opting to buy gently used items that are often still in great shape, you will save a lot of money.

The first year

According to studies, the cost of a baby takes up 20% of the family budget. Diapers alone can be as much as $800 in the first year, plus a few hundred dollars for medications, moisturizers and accessories, such as a humidifier.

In terms of financial aid, you may be entitled to the Québec Parental Insurance Plan (QPIP), which allows you to receive a percentage of your salary while on family leave once the baby is born. Make sure to verify this amount with the provincial government to determine disposable income during the first few months of your new family life and adjust your budget accordingly.

Before you know it, you'll have to choose a daycare. In 2020 in Quebec, a subsidized space in a daycare costs $8.35 per day. The cost of private daycares can vary. Based on your income, you may be eligible for tax credits and government assistance. Use this tool to calculate the cost of a childcare space and estimate your expenses.

Need more advice?

Meet with an advisor who can help you achieve your saving goals

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 $500 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 classifieds 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 day-to-day trips to pick up your child at daycare and take them to 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. Generally, for school supplies only, you should plan to spend between $100 and $150 for primary school and between $800 and $2,000 for secondary school. Add to this the cost of childcare, snacks and lunches, field trips and extracurricular activities, as well as 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 child 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:

  • Childcare 
  • Food
  • Transportation
  • Household costs
  • Extracurriculars and school supplies
  • Clothing
  • Health care and personal care
  • Annual total


The life of a young adult

Your child will experience many firsts: Their first cell phone, car, trips, nights out with friends, CEGEP and university training, 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.

Here is an estimate of annual costs for a young adult in university living in a dormitory:

  • Tuition fees (per semester)
  • Textbooks
  • Public transportation
  • Dorm room
  • Groceries
  • Cell phone
  • Sports and extracurricular activities
  • Clothing
  • Health care and personal care
  • Annual total

Source: Office of awards and financial aid at Université Laval

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.

Impact of the number of children

There are economies of scale to having multiple children. According to studies, it is estimated that the second child costs 50% less annually than the first child. You will be able to reuse a large number of clothing and toys, and you can use the same accessories and furniture.

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 split and the impact on the family budget may be even greater if you have to 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.

Your advisor can determine different strategies with you to ensure your family’s financial future. No matter what, 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.

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