How much money does it take to raise a child in Canada?
With inflation skyrocketing in Canada, many couples planning to have children may be wondering if they can still afford to.
Something as important as having children isn’t a purely financial decision, but affordability must be carefully considered as well. Statistics Canada does not collect this information, so I’m going to have to do some estimations based on U.S. data and one Canadian study I found.
Moneysense's 2015 study determined that the average cost to raise a child until the age of 18 was $253,946. By applying 11.37 per cent worth of inflation between 2016 and 2021, we get $281,880 as the total cost to raise a child until the age of 18 in 2022.
Since these results are fairly close, I’m comfortable with using $281,880 as a ballpark estimation of the cost to raise your child until the age of 18 in 2022. While that is a daunting figure (more than a quarter of a million dollars!), it’s a lot more manageable when you break it up into shorter time periods:
- $281,880 is the average cost to raise a child until the age of 18
- $15,560 is the average cost per year to raise a child
- $1,305 is the average cost per month to raise a child
While these may be estimations, it is clear that having children a huge financial decision. Having kids will likely be one of the biggest expenses a person will have over the next 18 years of their life, so it’s wise to plan carefully.
Determine if you can afford the cost of a child by carefully budgeting
- Step 1: Calculate your monthly household income.
- Step 2: Determine your current monthly household expenses.
If your monthly income minus expenses is above $1,305, you can likely afford to have a child in Canada.
Looking at these numbers, are you concerned that you won’t be able to afford to have kids? Keep in mind that these are average numbers, and many parents are able to manage with much less. If you have a lower income, there is also some governmental support, such as the Canada Child Benefit, that you can turn to.
Money isn’t everything
Money is certainly not the be-all and end-all when it comes to deciding whether to have children. If you can’t afford the average amount listed above, but are confident you can raise happy and healthy children, then money should not be the main determining factor.
Everyone wants to provide a lifestyle for their children that is as good as or better than the one their parents gave them. The problem is, it’s much harder to do that these days.
The cost of living has increased substantially since the 1990s, as has the cost of housing and post-secondary education. It will take careful financial planning and hard work to raise a child, but it is possible.
Christopher Liew is a CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers on his Wealth Awesome website.
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