Are You Financially Ready to Have Children? | PC Financial (2024)

Choosing to have kids is a life-altering decision. And if you’re anything like the average millennial, the precarious state of the job market and the increasing price of housing may make you wonder if you’ll ever be ready to afford the cost of raising a child in Canada. These seven questions can help you decide if now’s the time or if you’re better off waiting a few more years.

Are you and your partner in debt?

Take a look at your collective student loans, mortgage, credit cards and any additional lines of credit. If you have a lot of debt, now may not be the time to add strain to your already stretched financial situation. Cut back on your spending, take on extra work or downsize your home to pay off your debt more quickly. You’ll need to have an in-depth chat with your partner, especially if you have different spending habits, to make sure your goals are in sync.

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Do you have adequate maternity/parental leave?

In Canada, if you’ve accumulated 600 hours of insurable employment over the year before you seek leave, then you should be entitled to maternity or parental leave. The total benefits are 55 percent of your average weekly insurable wages, up to a maximum amount, and then your employer may also top up those earnings. Before getting pregnant, tally your number of eligible weeks, decide if you will be splitting the leave with your partner and calculate the total amount you and your partner will earn in that time period. Can you afford what will likely be a temporary decrease in wages?

What’s your health-care coverage?

If you live in Canada, your children born here will have access to free healthcare. But don’t forget about the costs not covered by your provincial health plan, such as dental services, eyeglasses, braces and prescriptions. Check your coverage on your company healthcare plan, or consider purchasing a plan of your own.

Do you have an emergency fund?

Though it’s smart to have an emergency stash of cash no matter your family status, it’s even more important once you have children. Ideally, set aside enough money to cover three to six months of expenses so you have a safety net if one spouse loses a job or there is an unforeseen crisis that requires you to dip into your savings.

Is your home big enough?

Your living situation may be perfect for a couple of lovebirds, but what happens when a baby arrives? If you already live in a home with an extra bedroom or two, you’re set. But if you feel squished in your tiny apartment, you may need to move into a bigger home. Have a look at what your budget may allow, then research the areas of the city or country that give you the most bang for your hard-earned buck.

Do you have access to childcare and can you afford it?

In the early years before your child attends school, childcare may be the single most prohibitive cost you will encounter. If you and your spouse both want or need to continue working, figure out how many days you’ll need paid help each week, then research costs for childcare in your area and see if you can fit the added expense into your life.

Can you budget for the basics?

While it’s nothing compared to paying for daycare, the cost of basic necessities like diapers, a crib, a stroller, a car seat, clothes, toys, books and formula does add up. Whenever possible, put these items on your baby registry, or borrow newer, well maintained items from friends or family members. As your child gets older and needs more stimulation in the years before school, you’ll also need to consider the cost of activities, classes and camps.

Let’s be real: If you wait until every single box is ticked, you may never have kids. But if you can’t give any of these questions favourable answers, then that’s not a good sign either. Get to the point where you feel reasonably confident answering most of the above questions (especially regarding debt and childcare) and you’ll likely be in a good place to start a family—financially, at least.