Financial prep for raising a family

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Family planning Q&A with Jeffrey Schwartz, Executive Director, Consolidated Credit Counseling Services of Canada (www.consolidatedcredit.ca)

Q: Between daycare, clothing and all those extra-curricular activities, we all know raising children is not cheap. Just how expensive is it?

A: Next to home ownership, raising children is the biggest expense on the household budget. Raising just one child, from birth to the age of 18, costs $243,660, which works out to $1,070 per month. For some, this is a mortgage payment!

Q: With this in mind, are people having fewer children simply because they can’t afford to have more?

A: Surprisingly, no! Between 2006 and 2011, Canada saw the highest increase in the number of young children since the end of the baby boom. The population of people aged zero to four increased by a staggering 11 per cent.

Q: What is the number one mistake new parents make when it comes to planning for baby?

A: It’s all in the planning; saving money to cover the expenses of children should be as second nature as saving for a down payment on a first house. It is imperative that new parents start putting money aside in their budget early to cover the costs of everyday essentials. Kids grow fast, and before you know it’s time to move onto the next size or the “older” toy.

Another one of the traps parents find themselves in is buying “everything”, because naturally, we want our child to have the best, from the latest clothing to the newest educational toy for their age group.

Q: What are some of your other tips to help new parents save money?

A:  First and foremost: be realistic. Recognizing what your child needs, versus what you want them to have, will help you stay out of debt.

Being a parent doesn’t mean being an island. Use your neighbours and local retailers to help curb the costs of clothes and toys. Neighbourhood swaps are great, as are garage sales! Or try child resellers and consignment shops. They are a good place to not only sell back the gently used clothing your children can no longer fit into, but you can often pick up clothes at drastically reduced prices.

Using coupons to your advantage is something everyone should do, not just parents! Check your local papers, flyers, blogs and online forums-even Facebook- for money-saving coupons that will help you cut down on expenses. Remember, even a five dollar savings each week can add up over the course of the year!