Leslie-Ann Scrogie
Jan. 11, 2021
The 2020 COVID-19 baby boom didn’t happen. The opposite occurred — there were fewer pregnancies and pushed-back fertility treatments. It turns out that when you force people to stay home and live in close quarters, they don’t just reproduce, and prolonged stress is super bad for fertility.
But, with the vaccine just months away from a complete rollout, many couples are feeling emotional relief, hopefulness around their finances, and ready to get their family plans back on track. If this is you, here are a few important financial considerations to pay attention to.
Conception costs
If your plan is to naturally conceive, and you’re successful, your costs are relatively low; you may buy a cycle tracker app (many are free, by the way), healthier foods, prenatal vitamins and acupuncture treatments to boost natural fertility.
If you are going down the path of fertility treatments, however, get out your chequebook. Self-funding is a massive investment. Treatments start at about $1,000 for intrauterine insemination and can easily rise to $15,000 per cycle for in vitro fertilization.
If you’re employed with benefits, your first stop is to check in with your benefits provider to understand what specific fertility medications and treatments are covered under your plan. And, also review coverage through your province. Your health-care provider will be able to tell you if any of your fertility treatments are eligible to be covered by your provincial health-care plan. As of now, only four provinces offer some fertility treatment cost coverage (New Brunswick, Quebec, Ontario and Manitoba), and it varies wildly.
It’s always best to turn to savings for any out-of-pocket fertility treatment costs, but some families do rely on debt, like a line of credit. My advice is that if you’re paying with debt, you have a clear action plan to get it paid off quickly (18 months or less), because of what comes next.
And, keep your receipts for fertility treatments as they may be eligible for the Medical Expenses Tax Credit.
Start-up costs for babygear
Half of suggested babygear is unnecessary and will cause clutter in your home. If you want proof, I can show you my storage shed and Kijiji sale history.
After becoming a mother and consulting copious amounts of mommy blogs, I know that the basics to focus on are having plenty of diapers and onesies for the first month, a safe place for baby to sleep (bassinet or crib), a car seat (this is essential, even if you don’t have a car), a thermometer, a place to feed your baby (your couch and old recliner chair are free, by the way), bottles and formula (in case breastfeeding isn’t an option), a breastfeeding pump if you plan to breastfeed (sometimes these are covered under your employer benefits), and a stroller.
When purchased brand new, these items can add up to thousands of dollars. But plenty of this gear can be bought second-hand for a fraction of the cost online from sites like Facebook Marketplace or Kijiji. Another way to offset startup costs is through a gift registry, and specifically asking friends and family to give baby essentials only, not toys.
Of course, you will need bigger clothes and a baby carrier and more, at some point, but get this gear as you need it and when it’s on sale; making it easier on your monthly cash flow. And borrow from a friend first, before investing in new items. Your baby might hate the swing chair or Velcro swaddle, like mine did.
Day-to-day costs
On top of having a reduced salary on parental leave, parents do spend more for items like diapers, formula, medicine, creams and vitamins. These can easily add up to a few hundred dollars per month. Many families try to save in advance for these costs and also trim back spending in other categories like takeout food and wine. And, when your needed items go on sale, it’s helpful to buy a little extra.
Raising children does get more expensive when kids go to daycare, which can total thousands of dollars each month per child. But, this usually coincides with your return to work and higher income. Daycare costs do go down after age 5, but are typically partly replaced with activity fees, school costs and more. Generally higher expenses are why so many working parents try everything in their power to earn more money through a job upgrade, raise or promotion.
Future education
According to recent data, the costs of a four-year undergraduate degree from a university for a toddler today will be close to $100,000 when they turn 18. Thankfully, Registered Education Savings Plans (RESPs) are available for parents to help save for this liability, and they benefit from the Canadian Education Savings Grant. When you put money in, you receive a 20 per cent top up of grant money (up to $500 annually per child). Thus, when you work that math backwards, contributing about $200 per month to the RESP gets you the maximum grant. When invested well (your financial adviser can help you with this), the money should grow to cover the bulk of the education costs.
Many parents have to work exceptionally hard to fit RESP contributions into their budgets. Why not lighten the load and ask friends and family to give gifts of RESP contributions rather than buying toys, use the Canada child benefit (if applicable) for the RESP, and earmark a portion of your paycheque toward it on payday?
Spending money on your baby in 2021 is about balancing priorities. Focus on what’s most important for you and your baby — essential items for care (for both you and your child), and keeping your household finances healthy.
