Five money talks to have before having a baby

Congratulations! You’re about to embark on one of life’s greatest adventures: parenthood. For the untested, welcoming a little sprog into your life is basically a giant leap into the unknown, where you can expect to hit new levels of exhaustion, overwhelm and, of course, joy. But there’s another big part of having kids that takes all too many people by surprise — the cost. According to MoneySense, the average cost of raising a child to age 18 is a whopping $243,660 (that’s $12,825 per kid per year). And that doesn’t even include university.

Clearly parenthood has the potential to blow our budgets out of the water. So you need to make sure you and your spouse do a financial reality check well before baby comes. If your new baby is on the way, here are five big conversations you should be having — pronto.

1. Who’s going to take parental leave?

Deciding who stays home with the baby is a highly personal decision — but it shouldn’t be driven by emotion alone. Since both parents are entitled to parental leave, you should compare benefits and see which one makes the most sense financially. It might also make sense to share the load and divide up parental leave in the first year like this couple did.

2. Do you really need a $1200 stroller?

There is so much pressure on new parents to buy every shiny new item out there, from strollers that cost a bundle to crazy items like diaper-wipe warmers. Don't let marketing gimmicks drain your funds. This calculator is a good way to get a grip on new baby costs, so you properly plan your budget. You should also pay attention to offers of second-hand baby stuff from friends and family. Your baby's needs will change from week to week and used clothes and other baby gear can save you a bundle.

3. Is your budget child-proof?

New babies can be pretty cheap, especially if you keep a lid on spending for new baby stuff. But as your child gets older, the costs will go up, from activities to summer camps to dental bills (to name just a few of the many costs of raising kids). If you’re already operating on a tight budget pre-baby, you might want to revisit your spending and see where you can cut spending even more. Here are a few ideas to get you started.

4. Daycare, nanny or stay-at-home?

After parental leave, you might be thinking of putting your child in daycare or hiring a nanny, but depending on how much you and your spouse earn, it could make more sense for one of you to stay home until your kids are in school. Do the math and figure out what makes the most sense. This calculator is a good start.

5. Who will take care of your kids if you’re not around?

Back in your single days, the idea of having a will probably seemed pretty strange. But now that you’re about to be a parent, you’re going to have to grow up and get an estate plan. You’ll need to think about a will, life insurance and even disability insurance in some cases. Consider that without a will, your kids could end up with no money and being raised by people chosen by the province.