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Are your kids costing you too much money?

Baby sitting on pile of money

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Recently an acquaintance made a blanket statement about families with children, suggesting a strong link between the number of mouths they feed with how financially up the creek they are.

Yikes. We know kids cost money. But how much money, and is it cut and dried enough to place a price tag on parenthood?

Business writer Camilla Cornell did some serious number crunching and arrived at a total bill of almost $250,000 , assuming you eject the child from the nest on their 19th birthday. That works out to $13,157.89 per year, which would mean someone in a 30 per cent tax bracket would need to earn almost $19,000 extra to support those extra costs without affecting pre-parenthood spending. Then again, maternity or paternity leave generally involves a cut in income for the household.

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Clearly, there is more to the equation than just income. Many families make tradeoffs in order to make things work. But some families do struggle. Consumer debt is still climbing, and the debt to income ratio for the average Canadian is at record levels.

Student loans, buying your first reliable car, getting married, and buying a house are all big milestones that can happen within a few short years of each other. That's already a considerable amount of money-induced stress at a young age.

Just like during the flight safety demonstration when they're explaining what to do when those oxygen masks come down, I typically tell parents that they have to take care of themselves first before they can take care of their children. That means getting a grip on what your expenses will be, and how you can best plan for them.

READERS: Is it already too expensive for Canadians to have children? Is it getting worse? What advice would you give to young Canadian families on how to manage their finances if they have one (or more) kids?

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About the Author
Personal Finance columnist

Preet Banerjee is a consultant to the financial services industry. You can follow him on twitter at  @PreetBanerjee. You can find his conflict of interest disclosure on his website. More

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