Here’s How Much Our Son’s Second Year Cost

Time for another annual kiddo spending update! For those new here, you can see all our parenting related posts here.

Pull up any article on Google about the costs of raising a kid and they will tell you to get ready to spend anywhere from $10,000-$15,000 per year.  MoneySense released an article this August with updated 2023 figures to raise a child in Canada and they calculated an average annual cost of $16,900 CAD/year or $321,020 CAD as the total cost from birth to 18 to raise a child in Canada.  And this figure does NOT include any university spending or investing within an RESP to help offset post-secondary costs.

We’re here to dispel this myth that kids MUST be expensive.  Really, kids can be as expensive as you choose.

A caveat: We live in Canada where healthcare costs for residents are $0 thanks to our healthcare system.  This includes doctor visits, shots/vaccines, trips to the urgent care/hospital, surgeries, eye exams, first pair of glasses for kids, etc.

This coverage does not include things such as elective procedures, physiotherapy, massage, chiro, occupational therapy, dental, prescriptions, etc. There is supplemental coverage options available for these categories but we have elected not to purchase this additional coverage.

The Breakdown:

• Diapers & Wipes: $199
  • 742 Size 4
  • 208 Size 5
  • Total: 950
  • When Parker was ~1.5 he started to show interest in potty training.  We were in Portugal so it was very loosey goosey as we didn’t have any sort of training potty material with us.  By the time he turned 2, he was 100% potty trained for poops and 80% trained for pees. We still use diapers for naps and overnight sleeps.
  • We found Pampers Swaddlers worked the best for both of our little ones. On average, we spent just under $0.16.5 per diaper during this second year.
  • We prefer Costco Kirkland baby wipes.  We purchased two more boxes of 900 wipes by the time he turned 2.
  • I cannot waittttt to be done with diapers!
• Nursery: $62 (all new)
  • Mattress sheets ($16) and shelving cubes ($52)
• Medicines/hygiene: $248 (all new)
  • Diaper cream, Camilia teething drops, hair cut kit (the gift that keeps on giving), Tylenol, soothers, hair goo product, Pedialyte, ear infection prescription x2, pink eye prescription, and hospital parking (for a surgery he had that was $0)
  • Not much you can do about these costs and the various medicines and hygiene products will obviously vary on the kid.  We currently have no coverage for prescription medicine so we pay the full amount.
• Random things: $256
  • 5 year passport renewal & passport photos, water bottles x3, Portugal airplane activities, souvenir, replacement ergo carrier (left ours on the plane, thankfully the airline found it, and then we left it again another day at the airport agh!), carnival, games, toys
• Activities: $295
  • 1/2 sports centre pass October – January
  • 1/2 zoo membership
  • cabin activities – swimming, ice cream, petting farm
  • Big Box indoor play centre
• Clothes: -$29
  • We spent a whooping $6 on clothes this year and sold $35 of clothes. Clearly, we had many hand me downs from his older sister.
• Things we received for free as gifts or for free from random other parents in our community: $0
  • I’ve stopped tracking this category but I’m sure there were clothes, shoes and toys that we received for free this year.  We are thankful to have friends and family around that have gifted us items over the years.  Our local Buy Nothing Group has been a fantastic resource and we love gifting things on there too.  There are TONS of free baby-related items out there once you know where to look.
• Things we sold: -$206
  • baby gate, booster seat, high chair, bike, ride on toys, stroller, random toys

How Much Did We Spend?

Drum roll pleaseeeeeee

We spent a total of $825 during our little guy’s second year.  That comes out to $69 per month. During our daughter’s second year, we spent $1,416, so $591 less even though the cost of things has gone up significantly in 3 years time thanks to inflation.  This is an example of how the second kiddo likely will cost less than your first.

Not as bad as what a Google search will show you eh?  Of course, this is just our personal experience but again we’re here to dispel the myth that babies HAVE to be expensive.

RESP Contributions

We also contributed $2,500 towards his RESP education fund to get the full 20% match ($500) from the government so a total of $3,000 was invested into his future education.  If that annual investment of $3,000 grows at an average annual rate of 7% for 18 years, he will have ~$104,000 to put towards his education.  Rather than do this for 18 years, we plan to keep this up for 15 years to get the max lifetime grant of $7,200 from the government.  Assuming we stop contributing into their RESPs after age 15, at an average annual growth of 7% he will have ~$95,000 in his RESP by the time he’s 18 to account for his post-secondary education.  (For those curious, we will still contribute $2,500/year/kid into their investments but will shift from their RESP to their Informal Trust account instead since we’ve maxed out the government grants in their RESP after age 15.)

In Canada, this should be more than enough.  And if not, I see nothing wrong with him taking out student loans for the remainder (my $65,000 USD student loans were what kick started me on my interest in personal finance).  If he decides to go another route, this money is earmarked for him to use for whatever – be it to travel around the world, take some online courses/certificates, go into the trades, go into the military, start his own business, use as a downpayment for a house, etc.

Food Costs

We haven’t separated how much we spent on his food compared to our overall food spending but during his second year it was likely around $50/month for a total of $600/year.

Adding It All Up

So if we also include the $2,500 RESP contribution and $600 in food, we’re looking at a total of $3,925 total out of pocket for his first year.  Of course, the RESP is elective and we recognize our privilege of being able to contribute this $2,500 towards his education each year.

There you have it!

We recognize our privilege of having both parents at home to avoid any sort of day care costs.  This is another example of how being aggressive in your FI pursuits at a young age has benefits down the road to help keep your post-FIRE costs down.  After he turns 3 we will likely enrol him in 1 day/week of pre-school that will cost $0.

Those with parents, are you as crazy as us and keep track of your baby-related expenses?  Would you say you spent more or less than $825 on kiddo-related expenses (excluding education and food) during their second year? How have your child-related costs changed compared to their first few years?

Those without kids yet but considering it in the future, if you’re reading this blog you likely are not part of the herd mentality and hopefully you too can stay well under the average of $10,000-$15,000/year.  Any questions for us?  Happy to help!

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We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.  Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series.
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile, and see how we are paying $3/mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and/or tenant insurance.  Use this link to receive an extra $15 off your quote.  (Note that you must use this link to start the process to get the $15 off even if you prefer to pay over the phone.)
• How much are you paying for your monthly utility bills?  See how you can likely save on this monthly expense.

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