Parents should talk to each other early to figure out what expenses to prioritize and what to set aside when raising a family, Anita Bruinsma writes.Getty Images/iStockphoto
Managing finances as a couple can be messy. People have different priorities, and engrained money habits can complicate things.
When you add kids to the mix, the number of financial decisions and choices you have to make ratchets up.
On top of that, having kids is expensive. That additional cost can create tension between parents about how much to spend, what to spend on and what sacrifices each parent needs to make.
There are no perfect solutions to these issues, but there are things you can do to make it easier.
Don’t let it take you by surprise
One thing no one talks about when you are expecting a child is the nitty-gritty of the financial impact, which goes beyond simply the expense.
Studies have tried to estimate the cost of raising kids, putting the number at somewhere between $310,000 and $460,000 from birth to age 17. And young people consider that when deciding whether to start a family.
A 2022 Statistics Canada study showed that 38 per cent of those polled didn’t think they could afford to have a child within the next three years. Some were choosing to delay parenthood, or forgo it altogether, because of affordability.
While these studies do give you a sense of the total cost, the day-to-day reality of spending on the many things a child needs from birth to young adulthood – and beyond – is unplannable. It’s different for every family.
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Still, it’s important to start the conversation with your partner by acknowledging that life is about to get more expensive, and agree to talk regularly about money, to be open-minded and to respect each other’s views.
Put some numbers down on paper in terms of what costs are coming your way so that you are mentally prepared. If you can, start putting money aside into a savings account to prefund some big expenses like child care. The more you can anticipate the costs, the better prepared you will be when they arrive.
Align your priorities
You won’t always agree on how to spend money on your kids. Parents might have different priorities – one might value math tutoring, while the other values art lessons.
If you can’t afford both, you’ll need to find a way to resolve these differences.
Instead of debating the merits of every purchase, take a step back and look at the bigger picture. Agree on your priorities, which will help to align spending decisions.
For example, you might both agree that you will use second-hand clothing as much as possible, and borrow books from the library instead of buying them, while prioritizing activities that help your child stay active, such as swimming lessons and soccer.
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If you both have a similar approach to spending, you will be less obsessed about the details of every purchase, which can reduce friction.
It’s particularly important to agree on the big-ticket items. Costs like overnight summer camp and playing high-level sports need to be considered in light of what’s best for the child – and what you can afford.
A shared vision will make it easier to decide. If you can’t agree on the big-ticket items, find someone to mediate, like a couples counselor.
Carefully consider what to sacrifice
Parenthood is a sacrifice – our time, energy and money become resources. Expect to make short-term financial sacrifices: Pausing a gym membership, going out for drinks and dinner less often, or taking a less expensive vacation are common ways that parents change their lifestyle (and not always just for financial reasons).
Be careful, however, of sacrificing your own long-term savings. While you might need to reduce your retirement savings during the most expensive parenting years, do your best to continue making at least some contributions towards your retirement.
It’s common among the parents I work with to hit their late 50s and realize that they’ve been so busy parenting that they have no idea if and when they will be able to retire.
The good news is that once the kids are independent, many parents can ramp up their savings and catch up on those missed years. Still, the earlier you start saving, the more time it has time to grow, which will help you have a more comfortable retirement.
Anita Bruinsma is a Toronto-based financial coach and a parent of two teenage boys. You can find her at Clarity Personal Finance.