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Spending more than $1,000 on children’s activities? Think again.

When I started my career in finance in 2006, I attended an event with the author of The Wealthy Barber, David Chilton. He kicked off his financial pep talk by recounting the time he reviewed an Alberta family’s spending who claimed they were completely broke despite earning $83,000 a year.


How was this possible? The family owned a modest home, drove a 10-year-old minivan and bought no-name groceries and non-designer clothing. Their monthly budget allocation, after taxes, broke down as follows:


Housing and utilities: 25% (should be less than 35%)

Transportation: 10% (should be less than 15%)

Food, clothing and grooming: 20% (should be less than 20%)

Consumer debts: 10% (should be less than 15%)

Retirement saving: 0% (should be 10%)

Everything else: 35% (should be less than 15%)


The trouble was the “everything else” category. More than a quarter of the couple’s take-home pay was being spent on activities for their two children—hockey, dance, camps, swimming, art, music, karate and school trips.


Spending on the children was sucking the budget dry, and the kids were exhausted by the frantic pace. Doubly sad was the parents had no retirement savings or RESP savings to cover their children’s future educational expenses.

It’s not the early years parents should be scared of

Certainly there are financial implications to being on parental leave and having to buy diapers, but generally a family’s budget can be well-managed through this time by cutting back on the “everything else” category, sharing childcare cost amongst neighbours and buying essentials in bulk.


The financial trouble typically starts when the children reach school-age. This is when parents start registering their children in activities and have to start paying school fees for school trips, year books and craft fairs. It’s also when some parents start getting competitive and use their children as trophies to show off their financial success.


The financial challenges multiply the more children you have. Yes, there are economies of scale for basic expenses such as food and clothing. The New York Times reported that the annual cost to support one child is $23,000 a year. Each subsequent child costs just $3,000 a year more.


But, there are few economies of scale with activity fees. Each child pays the full price.


Rein in activity expenses

It’s unlikely that your child will become a famous NBA star or join the National Ballet, unless you’ve been told otherwise by a qualified talent scout. Therefore, it’s best to manage the financial pressures of activities by asking your child to narrow down their interests to two or three things, and planning for the costs in advance. As a general rule, when your children are the following ages, spend less than the following amounts on activities annually:

0 – 4,  $350;

5 – 8, $500;

9 – 14, $750.


If you’re thinking that the above budgets are skimpy, complement it with free public programs. Libraries, schools and municipally-run recreation centres provide fabulous reading, art, music, sports, digital and volunteer programs. And, if you’re willing to do the work on the applications, your child may qualify for scholarships to privately-run programs.


Parents, if you haven’t maxed out your pension, RRSPs, TFSAs and your children’s RESPs, but you’re still sending junior to expensive summer camp, you need to revisit your priorities. Kayaking lessons will soon be forgotten, but your children will remember your impoverished retirement a lot longer, especially if they have to subsidize you.