Have you seen this pregnancy time-lapse video? It packs a nine-month pregnancy into a cute 90-second YouTube video. It starts with a man getting the news that his partner is pregnant and a minute later – bam! – baby Amelie is born.
It makes the whole thing look so easy, doesn’t it? And I guess it is compared to what happens after – especially on the financial front. A lot of new parents aren’t prepared for the added costs that a new baby brings. These costs get higher and higher as their tot grows up (according to this article in Moneysense, the total cost of raising a child to age 18 is a whopping $243,660 – that’s $12,825 per child per year).
The sooner you come to terms of this financial impact the better. Brace yourself for higher costs early, starting with these six basic budget items:
1. Childcare: If one of you decides to stay home, then you need to make sure you budget for the loss of an income. And if you both decide to keep working, then think about how much childcare will cost. How much you need depends on where you live according to Today’s Parent, which has crunched the numbers in this article – in Manitoba, for example, childcare expenses are estimated at about $28 a day; in Alberta, you’ll pay closer to $46 a day.
2. Groceries: From diapers to baby food, you can expect your grocery costs to rise substantially. Kids are a game changer when it comes to your monthly food bill.
3. Travel: Vacations get a lot more expensive with kids. Once they turn two, you’ll have to pay another full airfare and when they’ve reached school-age, you’ll have to travel at peak times like March break to accommodate school schedules. That’s why it’s a good idea to get savvy about cheaper holiday options, like camping and road trips.
4. Recreation: Do you want your kids to go to camp? What about hockey and ballet? All those extracurricular activities cost big bucks, from program fees to special equipment. At least the government gives you a tax credit for some activities.
5. Your savings: Get ready to revisit your savings goals as you put away money for things like education and topping up your emergency fund to make sure you can pay for the higher monthly expenses.
6. More space: Need an extra bedroom? Whether you plan to buy or rent a bigger place, your budget is going to feel the impact.