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Dealing With Expensive Kids

How to manage expenses while keeping your child in the game.

Extracurricular activities for kids are more popular than ever, whether individual and team sports or music and language lessons. An Ipsos poll revealed that Canadian parents spent about $1,160 on extracurricular activities during the 2017–18 school year, up 3.5 per cent from the previous year. And according to another study, parents in Canada spend more per child on youth sports than anywhere else in the world.

When children are small, parents often encourage a variety of activities, from swimming lessons to soccer, from dramatic arts to piano lessons. Depending where you live, these activities may be available through municipal programs, community centres, after-school programs or private instructors. No matter the activity, it’s a great way to keep the kids busy, give them a break from electronic devices and, in some cases, provide a much-needed opportunity for physical exercise.

Inflating expenses

Extracurricular activities come at a financial cost, particularly if you have more than one child enrolled (not to mention the logistical feat of trying to get two or more kids to different places at the same time). As kids get older, especially if they show some promise, they may become more committed to their favourite activity. Expenses that were manageable at the recreational level suddenly balloon, potentially adding up to thousands in fees, equipment, uniforms and travel. It should be no surprise that youth sport in Canada is a whopping $8.7 billion industry.

Some Canadian parents are going into debt to make these diverse experiences available to their children. Although more than 55 per cent of Canadian families with children enrolled in extracurricular activities are feeling the financial strain of covering those costs, 91 per cent say the experience for their kids is worth the expense.

Strategies to help lower your costs

If your child is passionate about a sport or art and has moved up to the next level, you will pay more to keep them involved. The higher they go, the more it will cost. So how can you keep your kids in the game without going into debt and compromising your own savings?

Do your research

Even if your child is just starting out, ask about costs at the higher levels. Coaches and parents of kids who are further along are a gold mine of information. They can tell you the financial and time commitments required and may have tips that could save you money.

Plan ahead

Research the season’s competition or performance schedule so you can figure out what costs to expect (travel plans, costume expenses, etc.) – and make them part of your household budget. It’s a good idea to maintain an extra fund for unexpected costs, particularly if your child is a high performer, which could translate into additional tournaments or recitals that aren’t part of the regular season. Consider opening a savings account dedicated to your children’s activities and set aside a small amount each payday with an automatic transfer.

Small savings add up

You can’t do much to lower training costs, but you can make a dent in other expenses. Look for secondhand equipment and talk to people in the same sport who may be willing to pass on equipment their kids have outgrown. Suggest that family members buy gear for holiday and birthday presents. Check out any incentives your club may offer for volunteering, or possible fundraising activities that can help defray costs. When travelling for competitions, consider carpooling or doubling up with other families to keep hotel and transport costs down.

Don’t bank on a scholarship

Despite all your child’s work and talent, they may not be among the lucky few who earn a scholarship towards their post-secondary education. Make sure you save for it with a Registered Education Savings Plan (RESP). After all, you want to ensure your child has a “Plan B” if their dreams of making it to the Olympics or Broadway don’t go as expected.

If you have to borrow, do it wisely

If you do need to borrow funds during peak periods of your child’s activity, consider a secured line of credit. It’s the lowest-cost borrowing option with the most flexibility. Your advisor can help find the best option for you. No matter what dream your child is working towards, there are ways to help finance it.

Your advisor can help you create a plan and a budget that ensure you don’t sacrifice your retirement or your child’s post-secondary education. Speak to your advisor today.

Discipline is what it takes to block out the noise, commitment is what it takes to walk the path to financial success and patience is what it takes to reach the goal.

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