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Kids and Money

My kid turned eight years old a couple of weeks ago. I booked him an amazing party at the local laser tag place for under $400. He invited eleven friends, and they all showed up! He got a lot of Lego, which he was thrilled with. I got him a new two-wheel bike, because his old one was getting too small. I also bought him new soccer cleats and shin guards, but I would have bought them regardless of his birthday. It was an expensive weekend!

Spending on my kid now has its own category in my spreadsheet. I track all the expenses in their own categories (daycare/camps; sports; RESP; life insurance - something I would not purchase now but I bought the policy when I was less informed, and it is universal life, so I keep paying for it - only $24 a month; misc - includes birthday party and more frivolous expenses like tiny shopping sprees). I add up all the amounts and apply it against the amount of child support I get each month. If there are any funds leftover they go into his savings account.

I only started doing this in the past couple of months. Prior to that the child support went into my account with my pay and child tax credits and everything came out from the combined funds. When I was budgeting for the new car, I separated the child expenses to ensure myself (and his dad, if he shows up with his guns ablazing), that none of "his" money will go toward my own extravagant expense.

I do use the child tax credits as personal income, because if I did not have a child, I would not have moved into a part-time position, decreasing my pay and putting me into the lower tax bracket that qualifies me for the credits. I look at them as an income supplement, until I go back to a full-time position (increasing my pay and my removing my eligibility for them).

I talk about the value of time and money a lot with my kid, and I know he's listening. The other day for mother's day, he was pleased to let me know that his dad had picked out the smallest and cheapest plant for me, saving money. He even kept the receipt to show me. This made me laugh out loud, because he knows that I don't want anyone spending a lot of money on me. He also took me out for lunch, because he wanted to go to McDs and I told him whomever pays gets to choose. I helped him take all the coins out of his wallet, and he had enough to get himself a happy meal and something each for Partner and I. We chose from the value menu so that he would also have enough to buy himself a kinder egg at the grocery store.

My budget spreadsheet is planned out for 2014, and unless new expenses come up (which I cannot foresee), we will have $200 leftover each month to put into a proper RESP. Currently I am depositing $40 into a group plan - again, something I would not choose to do with the knowledge I now have, but I have been paying into it since he was four months old, so it is worth a little bit now. There should be enough to cover his first year of college or university. Once I get the bank RESP accounts set up we will have a good ten years of investing there to help him out some more. I'm not completely opposed to him having to borrow a bit for student loans, but if we can avoid it, that's better.