Growing children can mean growing bills!
(NC) Having children is one of the biggest life decisions out there. Within that decision, there are personal and financial factors. On the financial side, it's easy to focus on the short-term, like whether there will be expenses involved in taking a maternity leave and childcare expenses. As baby grows, household finances may need to accommodate an increased expense load, depending on family needs.
“Many parents may look forward to the day they are no longer paying for daycare and diapers, but it's important to realize those costs will likely be replaced by other expenses,” said Janice Farrell Jones, vice president, Retail Savings and Investing, TD Canada Trust. “Future expenses can range from extracurricular activity registration fees and sports equipment to computers and school supplies, which can each have a large impact on the household budget.”
According to TD Economics, the average cost of raising a child to age 18, not including the cost of post-secondary education, is roughly $233,000. To help cover the costs and manage expenses, planning and saving is essential.
“New parents should start by working with a financial advisor to create a long-term financial plan that accounts for these costs and identifies ways to save for them,” said Jones. “Automatic transfers to an RESP or TFSA can be a great way to build long term savings. In the short term, research government benefits, tax incentives or grants that can help reduce expenses at the onset.”
Helpful resources with budgeting and savings advice for new parents are available at www.tdcanadatrust.com/planning/life-events.
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