Financially Speaking, Are You Better Off Having Kids Earlier or Later in Life?

It costs on average $250,000 to raise your child from birth until the age of 18 in Canada.¹ For most, that’s a significant chunk of change. If you and your spouse are curious about the financial ramifications of having a child earlier or later in life, there are plenty of pros and cons to consider. 

Considerations About Having Children Earlier   

If you want to have children, but aren’t sure about the timing, here are a few reasons why you may find having children earlier in life beneficial.

Lessen Your Chance of Joining the Sandwich Generation

The sandwich generation refers to those adults who are “stuck in the middle” between financially caring for their children and aging parents. Being a part of the sandwich generation is stressful emotionally, and it wreaks havoc on your retirement plans. With more financial obligations between caring for your children and parents, you have less money for your retirement. This could jeopardize your future financial independence and stay longer in the workforce.

While it’s no guarantee, having children earlier in life could help you avoid being apart of the sandwich generation. Why? By the time your parents reach the age when they require assistance, your children are grown, and you’ve a headstart on your savings for retirement.

Greater Odds of Having Your Parents Help Out

The younger you are when you have children, the younger your parents will be as well. With millennials tackling challenging economic circumstances - student loan debt, economic uncertainty, rising healthcare costs, etc. - affording to have and care for a child is no easy feat.

In Toronto, for example, the average monthly cost of infant care is $1,685 a month.² For many families, childcare is simply unobtainable. In this particular instance, having parents of your own who are on the younger side can be a big advantage. Grandparents who have maybe just recently retired but are still relatively healthy can help new parents and save them thousands in childcare services. It can often be a win-win for recent retirees, as well. Watching their grandchild can help fulfill a sense of purpose in those post-work years. Plus, grandparents enjoy pitching in to help pay for grandkids - anything from new clothes to contributing to a college fund.   

Considerations About Having Children Later

Here are a few reasons why it may make financial sense for you and your partner to have children later.

More Time to Build & Establish Your Career

Having a child means shifting your priorities - often away from professional endeavours. One out of three Canadian women have considered quitting their jobs once they have children - compared to only 20 percent of men.³  

Having children later in life can allow both men and women the time needed to focus on building a career, propelling forward in their desired career path and excelling professionally. Once a child comes, the shift in focus and priorities is drastic (and understandably so). While it’s still very possible to work a full-time job and raise a child, you may be less likely to work late, take on more projects or go after promotions that demand more of your time and energy.

Plus, being more established in your career could come with significant benefits and perks - more schedule flexibility, more vacation days, better paternity or maternity leave, health insurance for you and your family, etc.

It’s Easier to Hit Your Savings & Financial Goals

When you break down how much it costs to raise a child per month, how likely are you to still have money left over you can put towards important financial goals - like buying a home or second home, saving for retirement, and yearly vacations? By choosing to have children later in life, you and your partner are giving you a headstart in making significant headway toward your bigger financial goals. Once a child comes along, it can be hard to stay focused on long-term goals, especially retirement, when your immediate financial needs are more demanding.

If you have the advantage of planning when you’d like to have children, it’s important to take some time to weigh the pros and cons of either option. Like buying a home or starting a business, children are a huge financial undertaking. Talk to your financial advisor, let them know what your concerns may be, and run through some financial scenarios to figure out what may be best for you and your family financially.