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Children

When Is The Right Time (Financially) To Have Kids?

Clock5 min. read
byDan Vadeboncoeur onJuly 04, 2020

The short answer: it depends.

There are a lot of factors to consider when deciding to become a parent: income, housing, transportation, family support, whether or not you even LIKE kids?

(I think I can help with that last one, by telling you that I didn’t really like children until I had my own. So I think you’ll be ok.)

But having a child is a major life event, and as such should not be taken lightly. In fact, it comes last on my list of “Five C’s to get you through early adulthood.” These are: College, Career, Car, Condo (or house, I just didn’t want to mess up my “C” thing) and Children.

Notice that I did not include getting married. This is because a) you don’t need to be married to have kids, and b) it doesn’t start with “C”. Now, having and raising a child is much easier if you have a partner to do it with, but there are people who choose to do it on their own.

So, the “Five C’s” break down as follows: go to College in order to get a degree and start working in your chosen Career. Make sure it’s something you enjoy doing. Ideally, you’re going to be working in this field for the next 20 years. Along the way, as you earn more money, buy a Car and a Condo (or house). Set aside savings every year so you can travel if you want (because you sure as hell won’t be able to once you have kids!) and because it’s just good financial practice. And maybe about five years after college, as you approach the big 3-0, you’ll start to wonder: “am I ready to have Children?”

If you’re asking yourself this question more than once a month, then you’re ready. It’s time to sit down with your partner (if you have one) and sort out the financials before moving on to the fun part. You may be ready emotionally, but kids are a HUGE expense and you’d better be sure you have enough money in the bank to take this on.

There’s no set number for how much it costs to raise a child, but some studies have averaged it out to around $13,000/year. https://globalnews.ca/news/3172459/how-much-does-it-cost-to-raise-a-kid-in-canada/ So, if you’re able to set that much money aside every year without being adversely financially affected, then you may be ready to have a child.

But wait, you’d better have that amount saved up for that first year, because when you or your partner takes parental leave, you’ll only get on average 55% of your annual income, so year one of baby’s life is often the most difficult to get through financially.

And kids don’t get cheaper as they get older. They’ll eat more food, grow out of clothes more quickly, need more swimming lessons, gymnastics, dance classes, etc… It would be a very good idea to increase your savings a little bit every year, just to maintain a buffer for any expenses that come up.

With all this being said, your financial conditions may never be perfect for having a child. Don’t use this as an excuse to put it off if you really feel a strong urge to become a parent. A financial advisor will help you become ready. Many people (including myself) do not wait until everything perfectly lines up before having a child. Sometimes, you just have to jump in the deep end and swim.

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