Family and Finance

How to plan for a financially stable household when it’s more than just you

We all know how difficult it can be to manage your own finances, but what happens when you add an extra person to the mix? Or two? Or three? Having children can magnify the financial challenges that you might already be facing, and it takes some careful budgeting and smart spending to make sure your household is financially stable.

This page offers some tips and strategies to help guide you as you plan to expand your family. But, it is certainly easier said than done. If you cannot keep up with bills and feel like you’re being swallowed by debt, we can help. Give us a call at to speak with a trained credit counsellor. They’ll offer free expert advice, and help you decide your best course of action. You can also get started online with our Free Debt Analysis, and a counsellor will be in touch.

Starting a family

Planning ahead is a good strategy in all situations, including building a family. There are several things that you should think about, so that you can make goals, prioritize spending, and develop a clear path to achieving those goals. Here are a few of those things:

  • Do you plan on being the primary earner in your family, or would you rather be a stay-at-home parent while your spouse earns an income? Do you plan on enrolling your child in daycare?
  • Do you have room? Everyone’s aware that items like diapers and baby food are expensive, but you may also have to upgrade your dwelling so that you have extra room for your growing family. That may mean extra rent money or perhaps a bigger mortgage.
  • Are you thinking long-term? This will not be a temporary change – you will be caring for your child for the next few decades or more. Costs will evolve from baby formula to school bags to driver’s training to university, and you need a long-term plan to reflect that.

If you are planning on tying the knot with your partner, it’s probably a good idea to discuss these questions ahead of time. Similar to when you discuss merging your finances, honesty and openness is important if you want to avoid serious disagreements down the road.

Make sure your bank account is ready

A common mistake that many people make with money is not planning far enough ahead of welcoming a new member into the family. Children will add a considerable amount to your budget, and it is important to know what you are getting into.

Opinions vary on how much it costs to raise a child in Canada. On the high end, MoneySense.ca estimates that it will cost $243,660 to raise one child to the age of 18. On the lower end, the Fraser Institute places the figure between $50,000 and $80,000. Of course, the actual cost will largely depend on your own money management, but if we average the cost of the two extremes, you can still expect to spend nearly $8,000 per year – and this doesn’t include post-secondary education.

When it comes to planning for kids, save early, and save often. You can never be too prepared.

Include kids in the conversation

Get your children talking about finances as early as possible. Some adults struggle with financial literacy because their parents didn’t talk about family finances with them. This sense of money-taboo has been passed down through the generations, leaving modern-day parents ill-equipped. The Canadian Institute of Chartered Accountants found that 78% of parents have tried to teach their kids about financial management, but 60% of them don’t think they were very successful at it.

Slowly introduce your kids to the value of a dollar. Show them how finance works and let them know that most things in life aren’t free. Check out our page on teaching your children about money so that you can get them started on the right path and set them up for success.

Supporting family members

From time-to-time, loved ones need our support and many people find it difficult to put bank accounts over family. Whether your aging parents need to depend on you, or an adult child (and perhaps their young family) need to move back home, your household budget will need to reflect these changes.

First, an adjusted budget will be a key component in addressing any added expenses. Everyone should be involved in the discussion – again, like merging finances with a spouse, you need honesty, openness, and inclusion. A constructive budgetary discussion will make clear the overall income and expenses of the household and it may involve everyone chipping in where possible.

Lending money to family

This final issue is perhaps the most difficult. When one family member loans money to another, it adds an uncomfortable debtor-loaner dimension to the relationship. If the financial agreement goes awry, chances are the familial relationship will too.

Here are some tips to ensure your relationship will stay strong:

  • Determine in your mind, and the borrower’s, is this a loan or a gift?
  • If it is a loan, spell out the exact terms of the loan and make sure it’s in writing.
  • Lenders – don’t loan money unless you can do without it. Loan money with the idea that you may never see it again; don’t give away money and worry about paying next month’s bills.
  • Borrowers – make a detailed repayment plan and keep the lender in the loop. If you are experiencing difficulty, make sure you are honest and maintain open communication with your family member.
  • Be extremely careful when cosigning a loan with a family member! It is often riskier than making a loan because your credit is on the line. Similar to lending money that you can part with, you should only cosign if you can afford to cover the credit line should your family member fail to pay.

A growing family will mean growing expenses and that may put a strain on your finances. If you are having trouble keeping up with the bills, feel free to contact us at to speak with a trained credit counsellor, or take our Free Budget Analysis online.