How to Reduce Debt as Childcare Costs Go UpMar 28, 2018
With spring break on its way, one of the main concerns for working parents, especially those who need to reduce debt, is childcare.
The cost of keeping a child in daycare has gone up across the country, rising faster than the rate of inflation. While this study doesn’t include Prince George, in some cities, rates have gone up by 20 per cent since 2014. This is a challenge for today’s parents, many of whom are sandwiched in Generation X and have their share of economic challenges.
So, what can parents do to keep up with childcare costs when they also need to reduce debt? Childcare costs are largely out of your control — but there are two major things you can do to reduce debt, and spring break is a great opportunity for both.
First, start looking at options for debt relief. There’s plenty you can do in your free time to pay off consumer debt more effectively. Start by taking a financial health quiz. Then, evaluate your debt to see whether rising interest rates will affect the loans you have. (Are they variable rate loans? Can you keep up if monthly payments went up?)
If your debt is becoming unmanageable, you can book a consultation with a Licensed Insolvency Trustee (LIT), who will listen carefully as you describe your situation, and explain every debt relief option available — including debt consolidation or a consumer proposal.
Second, use your financial challenges as a teaching opportunity for your children. Keeping your kids in the dark is not healthy in the long-term. If your child is picking up on your financial stress, you can use this as a teaching opportunity for instilling good money habits. Explain to them how costs can add up for an adult: this example from Make It Count shows how kids can understand how driving and bussing add up for Mom and Dad in just one month.
To learn more teachable moments for parents needing to reduce debt, check out this podcast. BDO Licensed Insolvency Trustees discuss more ways to take stock of consumer debt, offer more resources for parents and kids, and discuss summer planning.