When my wife and I first decided to have a baby, the first financial thought that came into my head was this: How much will it cost to raise a child?

Looking online, I found a lot of simple answers. Some estimates even put the cost at as much as $300,000 over the course of raising them from birth to 18 years old. Many of the answers I read didn’t seem detailed enough, though. It's one thing to claim that raising a child costs $300,000, but that number doesn't truly reflect how it will fit your personal situation. Some of the issues not addressed in these types of estimates include: What about secondary education costs? Is the mother breastfeeding? Are you using disposable or reusable diapers?

Calculating the cost of raising a child in Canada

I came across some data compiled by Manitoba Agriculture (chart no longer online) that seemed to be detailed enough to give a true picture of what you can expect to spend on certain categories, by year. However there were two problems: The data was broken out by boys and girls and, more importantly, was from 2004.

The difference in gender was only about $500 more in food for boys over childhood. So I decided to average the numbers to represent any child. While it’s likely that certain categories have had more inflation than others, I used the Bank of Canada’s Inflation Calculator to increase all the expenses to 2013 levels, based off of the annual inflation rates of the past 9 years.

Even though they might not be perfect, the numbers I came up with should provide you with a reasonable expectation of what it will cost to raise a child from birth to 18 years of age. While the total is $197,285, you could remove the first year of food expense if the mother decides to breastfeed, or zero out the child care costs if one parent plans on staying home.

As you can see, there are ways to adjust the numbers in your chart to more closely reflect your family's situation.

AgeFoodClothingHealth CarePersonal CareRec, Reading, Gifts, School NeedsTrans-
Child CareShelter, Furnishings, Household OperationsTOTAL

I think this chart covers all the expenses of raising a child fairly well. If you are planning on having a baby, you can use this chart to help you get a reasonable idea of what you can expect to pay. For new parents, this is especially helpful so that you can plan out your budget for the first couple of years of your child's life.

Factor your lifestyle into the numbers

You should also consider the cost of maternity leave as well as looking beyond that if a parent plans to stay at home for more than one year to raise the child. The cost of lost wages can have an impact on your family's finances, so it makes sense to take this into account.

The chart does not, however, include the costs involved if you choose to help pay for your child's further education. If you plan to do that, you might consider adding $2,500 a year into an RESP to get the maximum Canada Education Savings Grant.

It's also worth noting that, in many cases, having multiple children doesn't just double total costs in each category. Hand-me-downs can reduce clothing costs for subsequent children. Additionally, transportation costs are unlikely to increase at a rapid rate, since you won't need a separate car or a completely separate trip.

After thinking about all these expenses and reduced salary, there is something you get to look forward: Tax breaks from the government. This includes the Canada Child Tax Benefit and Universal Child Care Benefit, as well as the spousal amount if a parent’s income is under $10,822. Other tax savings include claiming up to $7,000 in childcare expenses and up to $500 for the Children’s Fitness Tax Credit and another $500 for the Children’s Arts Tax Credit.

Just how much does raising a child cost in Canada? When we decided to have a baby, the thought that came to me was how much does it cost to raise a child?

About Tom Drake

Tom Drake is the owner and head writer of the award-winning MapleMoney. With a career as a Financial Analyst and over eight years writing about personal finance, Tom has the knowledge to help you get control of your money and make it work for you.