Starting a family is a huge decision, and you need to factor in multiple things when doing so including emotional availability, stability in life, and, most importantly, the financial considerations that go into raising a family.
With a family though, you have to consider a lot of other costs for things like housing, childcare, and education, and, without the right preparation, it can become a huge burden. It does help if you’re proactive and becoming aware of all the considerations you need to keep in mind can help a great deal as well.
Today we’ll be discussing all the different financial considerations you need to look out for, and how you can use government benefits and financial planning to make the job a bit easier. Hopefully, that will give you some reassurance if you’re planning on starting a family soon.
Housing Costs
The average home price in Canada is $646,134, but the price varies significantly depending on what part of Canada you choose to settle your family. In New Brunswick, the average price is $280,108, whereas in British Columbia the average price is MUCH higher, at $964,246.
Suffice it to say, that homes aren’t exactly cheap, but there are ways to manage expenses. Sit and assess your needs and the needs of your future family and try to adjust to smaller homes. Cohabitation is also an option that many families are now considering.
If buying isn’t within your means, then you need to account for rent prices. The average rental of a one-bedroom unit in October 2023 was $1,906, but again this depends heavily on the type of property you’re renting and the location.
Childcare Expenses
If you’re a working couple, you need to consider the cost of infant care as well. In Canada, this can be quite high, with an average of $650 per month.
So carefully assess your situation which includes parental leave policies with your workplace, your salaries, and the cost of daycare. If affording childcare is a challenge, you could consider exploring subsidized childcare and family support networks to help you out.
Healthcare Costs
While the public healthcare system in Canada is commendable, it has its limitations. The public healthcare framework in Canada offers citizens, permanent residents, and other eligible persons free healthcare, but only to a certain extent.
You would have coverage for things like surgery, childbirth, and possibly prescription drugs, but things like dental care, vision, and rehab are not usually covered. Coverage can also vary from province to province.
Therefore, while there is decent coverage under the public health system, more often than not, many people need to rely on supplemental insurance. There are also public programs that provide support when it comes to vision and dental care, but these would be limited to seniors and very young children only.
Based on your family’s needs, you might also need to invest in supplemental insurance, or a Medigap plan, which has an average cost of $77.
Education Costs
Just like healthcare, education is free in Canada, but only up until high school. Universities charge an average of $6500 per year for undergraduate degrees and $7000 for Masters degrees.
The cost can vary depending on which University you attend and what program you're enrolled in. For example, specialist degrees in medicine can cost a lot more than the average cost.
One way of being able to meet the costs of education is investing in a savings account or a long-term education policy. If you're proactive and set up something like that well in advance, you'll be able to afford to pay for your children's university with little trouble.
Debt Management
With a family, you’re no longer just dedicating money to yourself and you need to be careful about every dollar that you spend. With existing debt, money that could go towards your family’s finances is instead being used for repayments of loans.
Debt slows down a person’s financial progress as it is, and, with having multiple mouths to feed, chances are your financial progress gets slowed down even further. This is why you should aim to pay off any of your debts before you plan on starting a family.
If paying your debts off completely isn’t an option, then you need to find ways to make it more manageable to pay off your loans. With debt consolidation, you could end up paying less than what you’re paying right now, but you’re looking at a much longer loan term and, possibly, higher interest rates.
You could also consider government assistance programs, which are usually reserved for paying off student loans. Even though there are such restrictions, even if you get some form of relief and can have assistance with some of your debts, you’re still in a better position than you originally were.
Some Basic Strategies To Consider
Savings and Budgeting
If you’re planning on starting a family, then you need to start saving and investing in things that can give you a return with which you could both protect the money you have saved and cover expenses for your growing family.
It would be a good idea to also maintain some emergency funds, but that would be the second step. First, you need to sit down and come up with a budget that could cover your family’s expenses and let you save some amount of money.
Government Benefits
You could also make use of various types of government benefits, such as the Canada child benefit payments, which provide a tax-free payment every month to help you raise your child. You can also consider different government-subsidized housing initiatives.
Speak To A Financial Expert To Help With Your Family’s Finances
Financial advisors aren’t just supposed to help large businesses and high-net-worth individuals with their finances. Many families can also benefit from consulting with a financial advisor, to learn different budgeting and financial planning strategies.
Such experts could also guide you on the different benefits and tax breaks you can avail of under the Canadian financial framework, which will further help you manage your finances.
