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Discussion Starter #1
Hello

Contemplating starting a family here with my husband. Currently we are double income, but both of us feel pretty strongly about a parent at home. So really...how expensive are kids?

I have this debate with co-workers who are parents, and from the sound of things, they can be horrendously expensive. Though I remember growing up in a single income family and not wanting for anything. Mind you, my parents did not pay for things like my university education or a car, but I had food, clothing, and shelter, and I had piano lessons and ballet lessons.

We figure we're in a good spot right now. RRSPs are maxed out, we are mortgage free, and the only debt we have is investment loans that are not due for another 20 years.
 

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I think the first step would probably to be decide on the lifestyle you'd want to live with your child(ren).

I know that my brother & sister-in-law, started out on a good financial path, and then had a few children, and now they are completely different people financially. People always want the best for their children, but sometimes I think they loose sight of the fact that best is not always equatable to the most expensive item/product/school/etc.
 

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Hello

Contemplating starting a family here with my husband. Currently we are double income, but both of us feel pretty strongly about a parent at home. So really...how expensive are kids?

I have this debate with co-workers who are parents, and from the sound of things, they can be horrendously expensive. Though I remember growing up in a single income family and not wanting for anything. Mind you, my parents did not pay for things like my university education or a car, but I had food, clothing, and shelter, and I had piano lessons and ballet lessons.

We figure we're in a good spot right now. RRSPs are maxed out, we are mortgage free, and the only debt we have is investment loans that are not due for another 20 years.
Just do it if you really want kids..I am as frugal as they come and the 2 youngest were babies, my wife stayed home and we lived on 40k/yr income with small mtg pmt and no other debt just fine.


Not the same situation now with 3 kids and 2 incomes. My teacher spouse took 1 yr mat leave and worked the 2nd ty only part time so our income was reduced quite a bit for 2 yrs, but we hardly noticed because we budgetted for it. And we would do it again...children can bring things to your life that money and financial security never will for many people...I also know people who do not ever plan to have kids and that is fine, just not for me.
 

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I took a stab at this question a few years back. To give you some background, we have twin 3-year old boys and one baby girl. Yes, the cost of diapers adds up quite fast and you'll know the real meaning of "liquid gold" when you purchase formula but we've found that the two biggest expenses by far for us have been daycare and the opportunity cost of Mom going on mat leave. Both are in the tens of thousands of dollars. And, of course, there is college savings but at least you can save for college over more than a decade.

How much does it cost to have a baby?
 

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I read an interesting article the other day when the writer questions whether we should contribute to RESPs ? Tax benefits aside, his points are the Baby Boomers and the Gen X generations are typically on their own when it comes to post-secondary education. Getting OSAP (Ontario Student Assistance Program), part-time jobs, scholarships, bursaries...just to name a few of the many financial avenues available to students.

This will allow students to be more financially independent and resourceful instead of having everything handed to them on a silver platter.

His simple question was : Is RESP over-rated ? and you know what I think he made some very valid points.
 

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This will allow students to be more financially independent and resourceful instead of having everything handed to them on a silver platter.

His simple question was : Is RESP over-rated ? and you know what I think he made some very valid points.
I don't think so. Even if you believe that kids should fund part of their education, a RESP might make sense. Just contribute, get the matching grants and allow it grow. When the time comes for kids to go to University, withdraw your contributions for your own use and give the grants plus growth to the kids.

With their education only partly funded, it will allow the kids to be resourceful and financially independent.
 

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Discussion Starter #8
Thanks for everyone's responses! Our plan is to only have one child and stop there. That will allow us to stay in our small home (2 bedroom) and also reduce the cost of child care should I go back to work (but we are going to try to make it just on my husbands income until the child goes to school, and then I will work part time). The one scary variable is my husband is self employed - there are years where he makes more than me but years where he makes less. I also have benefits etc but we have decided I will be the one to stay home since I have no love for my job and he loves what he does.

We plan to fund RESPs to get the grant but that's it - anything over and above that for post secondary costs have to be paid by the kid - my husband and I paid for our own educations and we both managed to graduate debt free by working hard and being frugal.
 

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First thing to consider is your spending habits. You double income allowed for a certain lifestyle. Once that second income is gone, you have to realize that you cannon just buy anything at will. You'll also have extra expenses with the baby. The good thing is you are mortgage free.

If you lose your benefits, make sure you and your husband buy some insurance.
 

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Kids are expensive, any way you look at it. However, I'm not sure the financial part should be the primary concern. Kids will have a huge impact on your life in general. They will take up an enormous amount of time, and require constant care for many years. It's a lifestyle choice. As my wife and I said before deciding to have kids, do we prefer being wealthy and travelling the world (DINKs) or do we prefer to leave a legacy to the world (our two kids)? It's a deeply personal choice! I think most parents will tell you that having kids is extremely fulfilling, and changes your life in a good way. There are ways to reduce the costs dramatically. You don't need everything the media and toy companies lead you to believe you need, and secondhand stores are a treasure trove of affordable clothing, etc.

I have taken unpaid leave so that I may stay at home with our daughter until she's 3, at which time she will go to daycare for 1 year before going to school. I think it's important to enhance socialization in a daycare setting before school. There is opportunity cost, of course, in the form of lost salary. Our combined leaves will have cost us about $150K over three years. But not everything is about money. Some people make $50K a year and raise their kids just fine, others make $150K and can't seem to make ends meet.

Notwithstanding the various pros and cons, I think you just "know" if and when the time is right. That was our case.
 

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Again, it is a lifestyle choice more than anything. If you maintain all your current spending plus add kids, it will bankrupt you. On the other hand, if you replace your bar-hopping night with friends with kid's sports it won't be as big of an impact.

What I hate are new costs that arise now. Constantly being hit up for school, sport or club fund-raising is the worst!

As far as RESP's go, we max out the grant for the automatic 20% return and then save elsewhere. I've already told my daughter that we will pay for tuition but only for good grades: get over 75% and I'll reimburse for the course costs; get 74% and that bill is all hers.
 

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DrStan, i just want to address one of the point in your post: You don't have to have children to leave a legacy to the world...there are other things a childless couple (by choice or otherwise) can do to make the world a better place. A few things come to my mind such as: adoption, volunteer and charity work.

Different folks have different reasons to have kids or not to have kids and I think we can all respect everyone's choices.
 

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DrStan, i just want to address one of the point in your post: You don't have to have children to leave a legacy to the world...there are other things a childless couple (by choice or otherwise) can do to make the world a better place. A few things come to my mind such as: adoption, volunteer and charity work.

Different folks have different reasons to have kids or not to have kids and I think we can all respect everyone's choices.
Absolutely. That wasn't formulated very well; I just meant that living only for ourselves by travelling and blowing all the money would not be as fulfilling as kids, in our opinion. That's it. I should have said "our unique legacy" or something to that effect.
 

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Kids are expensive, any way you look at it. However, I'm not sure the financial part should be the primary concern. Kids will have a huge impact on your life in general. They will take up an enormous amount of time, and require constant care for many years. It's a lifestyle choice.

I have taken unpaid leave so that I may stay at home with our daughter until she's 3, at which time she will go to daycare for 1 year before going to school. I think it's important to enhance socialization in a daycare setting before school.

There is opportunity cost, of course

Notwithstanding the various pros and cons, I think you just "know" if and when the time is right. That was our case.
good points

Married at 21 in 1968, the first 10-years were spent travelling, education, working, saving & investing

In our case we were married 10-years before having our first and then 8-years later the second one, at which time were both hitting 40-years old.

After the first child was born my wife stopped working totally altogether outside of the home

It all worked out in the end

The kids were put through college & university - paid for by us

During the mid-early (what we considered to be the formative years) when the the kids were needing the most of us (I was in my early 40's) I dropped out of working life (by choice) for several years to be at home with my family.

I considered this to be the best time time of my (our) lives and it brought a sense of sanity to my mid-life wellbeing

Its not everyones plan & sometimes you cannot plan when or if you will ever become parents

The value of the kids goes way beyond any monetary value, and even now since they've left home, both are single - they are a pain in the backside at times, but we love them - they are ours
 

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Discussion Starter #17
good points

Married at 21 in 1968, the first 10-years were spent travelling, education, working, saving & investing

In our case we were married 10-years before having our first and then 8-years later the second one, at which time were both hitting 40-years old.

After the first child was born my wife stopped working totally altogether outside of the home

It all worked out in the end

The kids were put through college & university - paid for by us

During the mid-early (what we considered to be the formative years) when the the kids were needing the most of us (I was in my early 40's) I dropped out of working life (by choice) to be at home with my family.

This amazes me - you must have had considerable savings for your wife to quit working in her early thirties and you to stop in your early 40s. How did you finance this? Did you end up going back to work? This is ideally what I'd like to do but there's no way we can afford it - one of us will have to work.
 

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This amazes me - you must have had considerable savings for your wife to quit working in her early thirties and you to stop in your early 40s. How did you finance this? Did you end up going back to work? This is ideally what I'd like to do but there's no way we can afford it - one of us will have to work.
First off we were 31 (both born the same year) at the time when my wife stopped working when the first child was born, we were mortgage free at that point

I continued to work till 44 (1991), that is when I dropped out, at which time we lived off life savings & the RRSP's, which was zero when I went back to working life.

At the time I dropped out in 1991, I was earning $60k/yr gross

We had a small amount of passive income from a rental property.

I went back to school and dabbled PT doing bits of this & that for grocery money,then went back to active working life in 1994.

BTW, the day we got married in 1968 we had $500 in the bank, that was all the cash we had in total, us thinking we were rich at that time

Some would say we were lucky to be in the right place at the right time & of that generation without all of the toys, bells and whistles and no car till we were 27 years old. We took public transit everywhere

Hope this answers the questions and helps others
 

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Thanks - that clears it up. I thought you left working life in your early 40s and never went back.

We are in the position where our RRSP's are maxed out, we have about $100K in non registered savings and investments (half of that is in cash for a rainy day fund) and we are mortgage free. We make gross $125,000 a year but once we go down to one salary we will make $55K a year. We currently spend approximately $48K a year so technically we bank one salary at the moment anyway.

I do plan to eventually return to work but I don't think I will be making near the amount of money I make now as it will be part time.
 

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The kids were put through college & university - paid for by us.
Hi Ethos,

How do you differentiate between the pros and cons of paying for your child's tuition v. having them pay it themselves v. somewhere in the middle where the child pays for a portion?
 
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