Posted on Monday 06 July 2020
Saving money is tough, no matter how you look at it. It’s even tougher when kids are in the mix: suddenly, you have more mouths to feed, more bills to pay, and greater demands on what are considered monthly necessities. And while there’s no doubt that having kids is a phenomenal, life-changing experience, it’s also one of the more expensive transitions in life.
In the U.S., recent projections put the overall cost of raising a child at more than $233,000. But let’s not get ahead of ourselves: it’s not much different in Canada. In fact, you could be spending even more money than our neighbors across the border! On average, Canadian parents can expect to spend over $243,000 on raising just one child.
Simply put: parents need to be able to spend money wisely and save it in order to handle all of the expected (and not-so expected) costs that go hand in hand with having kids. Doctor’s visits, school trips, toys, clothes, food, education—and maybe even moving into a new place for a little extra room—are all on the horizon, and they are anything but cheap.
Before the panic starts setting in, know that it is absolutely possible to learn how to save money as a parent! In the sections below, we’ll show you real, actionable steps that you can take to keep your financial health (and your growing family) on the right track.
If you have younger children in the home, buying second-hand items can be a great way to minimize the cost of your necessities. This is especially true for babies and toddlers—they are constantly growing, and what you purchase today may not fit a few months from now.
Instead of buying brand-new clothing, shop around at local thrift stores and second-hand stores for great deals on gently used items. You’ll pay a fraction of the cost and free up more room in your monthly budget to contribute to your savings account. And as an added bonus, you’ll also be decreasing waste and living more sustainably, which is always a good thing!
You could even extend this to accessories (like cribs, playpens, and strollers), home items (kitchen accessories, furniture, and wall decor), or entertainment (like board games and sports equipment). Second-hand stores provide endless opportunities to tap into and save some money.
We’ve all been there—if the choice of buying a well-known brand name versus its generic counterpart is staring us in the face, most people are more likely to opt for the brand name. But there are tons of great savings to be had simply by choosing the generic option! And many brand name and generic products are exactly the same. At the end of the day, you end up paying a little more just for the name (after all, they have marketing budgets to pay for).
Stocking up on paper towels, toilet paper, napkins, and cleaning products are easy generic go-tos, but there are also plenty of grocery staples that fit in here, too. Boost your ability to save by choosing generic items for:
It’s incredibly tempting to skip the food prep process and just order takeout, especially after a long day at work. This is certainly true when you’re on your own, but it becomes even more significant when you have more mouths to feed—or when you want to just relax and spend time with the family instead of spending an hour cooking.
One good way to get around that temptation is to plan out your meals in advance each week. If you already know what you’re eating that night, you’ll be far less likely to make that extra stop for takeout on the way home. There’s also another benefit: your grocery trips will become much more manageable, since you’ll be shopping for specific (and with any luck, healthier) ingredients.
Instilling a little bit of structure into your daily meals is a great way to get organized and intentional about the way you spend your money on food. You could even take it a step further and plan your meals around weekly grocery ads and coupons for a more targeted saving approach!
One of the biggest costs associated with raising a child is grappling with how to pay for their college education. Of course, student loans may be an option for your child 18 years down the line—but if education costs are a budgeting concern, an RESP can help. A Registered Education Savings Plan (RESP) is a savings account that is designed to help parents pay for their child’s future education costs.
The great thing about an RESP is that anyone can set it up and chip in: grandparents, aunts, uncles, or even family friends can create and contribute to an RESP. The government will match up to $7,200 of what you contribute, and all of your contributions are non-taxable (which means you can save a little bit of money during tax season in the process).
It can also be a good way to introduce your children to long-term money management, too. All of those $10 birthday cards from family members can easily turn into an investment in their future through RESP contributions!
If you aren’t already following a monthly budget, now is the time to start. There are plenty of budgeting apps that make staying on track easy and convenient, giving you a real-time snapshot into your spending and saving habits. Budgeting apps will also let you get granular with your spending, giving specific budget amounts to different spending categories, like food, entertainment, gas, utilities, and more.
Pair your monthly budgeting with a little creativity by finding new ways to decrease your spending. Of course, no two households are the same, but here are some good places to start:
Finally, one of the best tried-and-true methods of saving money as a parent comes from successfully managing the debt that you already have. And those pre-existing debts could be costing you big-time in fees and interest rates!
If you have a mortgage, reach out to your bank and see if you are eligible for a refinance. If you have an auto loan, a little bit of research can help you see if another financial institution will offer a lower interest rate.
And if you have credit card debt piling up, you can utilize an interest-free promotion to transfer a balance, consolidate your credit card debt with a personal loan, or take out a short-term loan to pay off a few small balances in one fell swoop. There are plenty of possibilities to fit a wide range of financial goals and capabilities, so keep an open mind and don’t be afraid to shop around!
Following these money-saving tips can go a long way in boosting your financial health from one month to the next. Find the strategy that works best for you, and once you’ve mastered it, add another one! The key to successfully saving money as a parent is keeping everything as manageable as possible to ensure that you are setting your financial health up for long-term success—18 years into the future and beyond!