Real Financial Progress Index: How raising a family is financially impacting Canadians  

The latest BMO Real Financial Progress Index reveals seven-in-ten Gen Z (70%) and Millennials (69%) want to have children but worry doing so would negatively affect their financial security. While 81% of Canadians say being a parent brings joy and fulfillment to their lives, over half (53%) of parents admit having children compromised their financial security.  

The BMO survey examines how the financial and emotional challenges related to raising children in the current economic environment are shaping parenting decisions and found:  

• Family Defining Decisions: Financial stability (44%) is the top consideration influencing Canadians’ decision on whether to have children, followed by finding the right partner (34%), the ability to be fully present for their child(ren) (27%), mental and physical health (24%) and career goals and/or prospects (17%). Over a third (35%) would reconsider their decision not to have children if there was less of a negative effect on their finances.  

• Family Size Aspirations: On average, aspiring parents want two children, but that number rises to three if financial constraints are removed. 

• Emotional Toll of Parenthood: 89% say balancing the emotional and financial demands of parenthood is challenging and over half (55%) regularly feel overwhelmed by their family’s financial responsibilities – a sentiment felt most profoundly among Gen Z (72%) and Millennials (72%). 

• Keeping Up with the Jones: Over three quarters (76%) admit there is pressure for parents to keep up with other families by spending more than they should.  

• Long-Term Implications: 86% report that everyday childcare costs including daycare, after-school programs, and school supplies, negatively affect their ability to save for long-term goals such as higher education or homeownership. 

“For many Canadians, starting and raising a family is one of life’s most meaningful journeys, but it can also bring significant financial and emotional pressures. To help ease that burden, we encourage families to have open, ongoing conversations about money and to create a financial plan that reflects their values and long-term goals – whether it is buying a home, saving for their child’s education and more. Working with an advisor can provide guidance through life’s changes, and help families stay on track and focus on what matters most – spending more time together and making real financial progress.” 

– Gayle Ramsay
Head, Everyday Banking, Segment & Customer Growth, BMO 

According to BMO Economics, the current economic environment is testing the resilience of households in Canada. The Bank of Canada’s Survey of Consumer Expectations suggests most respondents have a negative opinion of their financial health, likely given concerns about tariffs and trade, a rising unemployment rate and sagging home prices in parts of Ontario and British Columbia.  

However, financial conditions are improving with lower interest rates, falling borrowing costs and steady income gains in the past year, meaning the overall debt service burden has fallen from earlier record highs. Household financial stress should improve further if the Canadian government can negotiate a trade deal with the U.S. and if the Bank of Canada resumes policy easing, as anticipated, in the fall. The latter would further reduce the mortgage reset burden on many homeowners in the next two years. 

The Price of Parenthood  

The BMO Real Financial Progress Index found 84% of Canadians feel the costs associated with raising children have become unmanageable, with parents saying the most surprising costs include groceries (39%); toys and activities such as sports and recreational clubs (37%); daycare, private schools and afterschool care (31%); housing costs to accommodate a child (30%); baby supplies such diapers, formula, etc. (28%); new clothing for the child(ren) (27%); strollers, car seats and other similar items (25%); and extra childcare help such as a nanny, babysitting, etc. (21%).   

While concerns about the financial demands of parenting remain high, many Canadians plan to support their children well into adulthood, with 22% saying support should continue until their child secures a full-time job, 18% planning to provide support until the child moves out, and 22% believing parents should offer support regardless of life stage. On average, Canadians feel parents should financially support their children in some capacity for 19 years; notably, 29% believe this support should last for as long as the parents are alive. 

To learn more about how BMO can help clients make financial progress, visit BMO.com.