TORONTO, Nov. 5, 2013 /CNW/ - Parental leave. Day care. Soccer. Braces. Summer camp. College. When young couples think about starting a family, the first expenses that come to mind are often parental leave and childcare. While these early costs can certainly impact household finances, the cost of raising children doesn't stop there. While growing children can sometimes mean growing costs, there are steps parents can take early on to ensure they aren't caught off guard.

TD Economics estimates raising a child born today to the age of 18 can cost as much as $233,000* - something parents may not be fully prepared for. Recent research from TD Canada Trust shows the majority of Canadian parents (57%) are not prepared for all of the costs associated with raising children.

"The average new parent needs a disciplined, long-term savings strategy to cover current and future costs," said Janice Farrell Jones, TD Canada Trust. "Getting a head start and taking advantage of a TFSA or RESP when children are very young can make a significant impact by the time children reach their teens."

Plan for the unexpected:
Canadian parents reported the expenses they were unprepared for included sports and extracurricular activities (30%), vacations or summer camps (19%), clothing, toys and games (14%). To help offset unexpected expenses, Farrell Jones recommends creating savings funds by starting a tax-free savings account (TFSA).

A TFSA is ideal for short or mid-term savings needs, such as a March Break vacation or summer camp costs. The savings grow tax-free until needed and a variety of investments can be held in a TFSA, including mutual funds and GICs.

"Goals are easier to achieve when broken down into manageable chunks - saving is no different," said Farrell Jones. "Instead of committing to a $2,400 annual TFSA contribution, consider setting up an automatic transfer of $200 a month. The money is out of the account before there is a chance to spend it, and savings actually grow more quickly from the power of compound interest."

Start saving early:
TD Canada Trust research suggests less than half of Canadian parents (46%) have some type of education savings for their child. This means the majority of parents are missing out on one of the best savings opportunities available in Canada: a registered education savings plan (RESP).

An RESP allows the income inside to grow tax-free. When funds are withdrawn for school, it is taxed at the student's income level, which is typically quite low. RESPs can also benefit from the Canada Education Savings Grant (CESG), an annual grant from the Canadian government which can contribute as much as $7,200 over the lifetime of an RESP. Speak with a financial advisor who can help you navigate the savings options available.

About The TD Canada Trust Bundle of Joy 2013 Poll
TD Bank Group commissioned Environics Research Group (www.environics.ca) to conduct an online custom survey of 3,645 Canadian parents. Responses were collected between January 10 and 25, 2013.

About TD Canada Trust  
TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, to credit protection and travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as in over 1,100 branches, with convenient hours to serve customers better. For more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.

This figure, reflected in 2013 dollars, is based on estimated costs for 8 items (food, clothing, healthcare, transportation, childcare, housing expenses, personal care and Recreation, Reading and School Supplies).   TD Economics recognizes that child-raising costs can vary widely by region and by family.  While many families have stay-at-home parents, the estimate assumes that a child is enrolled in daycare until age 11. This cost accounts for about one-third of the total cost.

SOURCE TD Canada Trust

Image with caption: "When Your Bundle of Joy Grows Up - The cost of raising a child goes beyond parental leave and childcare. Planning, budgeting and saving early can help new parents minimize the unexpected costs along the way. (CNW Group/TD Canada Trust)". Image available at: http://photos.newswire.ca/images/download/20131105_C4150_PHOTO_EN_32947.jpg