Budgeting for baby

A new addition to the family may require some financial adjustments


When Chris Browning learned she was expecting her first child in early 2021, she was thrilled. “[My husband] and I had just bought our first home,” says the Ottawa resident. “We felt ready.”


After a “babymoon” (a holiday taken before the arrival of a baby) Browning’s husband unexpectedly had hours cut at his job. Their home needed a few repairs, which they wanted to accomplish before the birth. Then came the nursery expenses: converting an office into a child-friendly space, a crib, bassinet, change table, rocking chair, clothes and feeding supplies. “The bills kept coming,” says Browning, and “that was definitely a source of stress.”


Strategizing for the impending arrival of a child is a crucial financial step that can mitigate potential stress, says Kevin Gordon, branch manager with PFSL Investments Canada Ltd., in Ottawa. “Ideally, this should commence prior to the child’s birth, with an emphasis on initiating the process as early as possible for financial preparedness.”


According to a 2023 report by MoneySense Magazine, it costs approximately $320,000 to raise a child from birth to age 18. “It can be asserted,” Gordon says, “that the cost associated with each child is comparable to the financial commitment of a mortgage.”


Planning for a baby should ideally begin with a comprehensive financial assessment, says Gordon, to analyze the family’s current situation, encompassing aspects including income, expenses, savings, insurance coverage, and outstanding debts.


“Establishing a detailed budget is essential for gaining insights into financial capabilities,” he says. “Building and maintaining an emergency fund is crucial to prepare for unforeseen expenses effectively. Understanding the implications of maternity or paternity leave on income and adjusting the budget accordingly is also vital. Given the uniqueness of individual circumstances, it is imperative to customize one’s game plan to align with specific needs and available resources.”


Gordon suggests considering both the immediate and long-term financial implications. Specialized equipment such as car seats, high chairs, baby monitors, cribs, and strollers can constitute a significant portion of the initial investment, while recurring expenses related to daily care—diapers, wipes, formula and baby food—can be substantial, particularly during the formative years.


Childcare expenses, including daycare services or babysitting, are some key considerations that can accumulate over time. “These costs are essential to factor into the budget,” Gordon says.


Often, there are discretionary expenses that parents can reconsider in order to allocate resources more efficiently, says Gordon.

“In general, I think we really don’t need as many tools or gadgets for our babies,” says Ottawa mom Leah Mulligan.


“For my baby, I thought I would need a lot more outfits than I did,” says Mulligan. “He had a lot of super cute sets, when in reality he wore onesies and footed pyjamas a lot at home. I really did not need or use a lot of baby gadgets, like a bottle warmer, wipe warmer, baby bullet, containers for puréed food, etc.” She also made little use of the crib, co-sleeper and diaper pail and recommends that families make their own choices for what will work for them.


Sometimes, sacrifices are required. For example, evaluating entertainment expenses can yield opportunities for savings, says Gordon. “Assessing the necessity of a premium cable package alongside subscriptions to streaming services like Netflix, Prime, and Apple TV becomes crucial,” he says. “It prompts a reflective analysis on whether such subscriptions align with current priorities, especially when faced with the evolving financial responsibilities of raising a child.”


Social activities, too, can undergo a thoughtful review. “Pre-child, dining out with friends may have been a common practice,” says Gordon, “however, exploring alternatives like hosting potluck gatherings can not only be a more cost-effective option but also foster a sense of community. This shift reflects the discernment between genuine needs and discretionary wants.”


This was one of the areas where Browning and her husband made some cuts. “We stopped going out so much, and instead, started to invite friends over for pizza and board games,” she says. “It ended up working out well, and we didn’t need to get a babysitter.”


“This proactive approach to financial management,” adds Gordon, “can enhance the ability of parents to meet the evolving needs of their growing family while maintaining a balanced and sustainable financial outlook.”




Primerica representatives are not financial planners. For related advice, individuals should consult an appropriately licensed professional. Primerica does not deal in mortgages.  Primerica Representatives make simple referrals of clients to approved third party mortgage loan providers under Primerica’s mortgage loan referral programs.


The opinions expressed are not necessarily the opinions of Primerica.


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Primerica representatives are not financial planners.  For related advice, individuals should consult an appropriately licensed professional.


Primerica does not deal in mortgages.  Primerica Representatives make simple referrals of clients to approved third party mortgage loan providers under Primerica’s mortgage loan referral programs.


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What about RESPs?

Kevin Gordon recommends that parents seek guidance from a qualified financial professional to gain a comprehensive understanding of the benefits of RESPs and how they integrate into their broader financial landscape.

RESPs permit contributions of up to $2,500 annually per child, Gordon says, with the government providing grants of 20 to 40 percent (based on income) on the initial $500 and 20 percent on the remaining amount.

Lower-income families may also qualify for the Canada Learning Bond, which offers an additional sum of up to $2,000.