Imagine paying 45% more to raise your child—the single tax is real

Missing out on a loyal customer by ignoring the single-income household

We single-income households make up a strong portion of the purchasing public, it makes good business sense to speak directly to us and cater to our unique needs. We make purchasing decisions based not just on the hard numbers, but there are emotional and psychological reasons we choose things, too.

There are almost 1.1 million single-income households in Canada, according to the latest statistics from 2022. These households get by on a median income of $43,590. Of those households, just shy of 42% have two or more children.

That’s a lot of solo decision-makers across this country — many of whom have dependents — for business to ignore.

Want my money? Appeal to my head…and my heart

Solo-income families tackle two realities when faced with a purchase decision: Can we justify the expense? And, does it make sense based on our single-income budget?

While logic dictates many of these decisions, our heads and hearts play a large factor. Understanding that we buy with our head as well as our heart is good business for companies looking to expand their market.

Amrit Richmond of Medium, a digital marketing publication, explains that a lot goes into purchasing decisions. There are the basics — cost, colour and quality, as well as personal experience or consumer testimonials — such as solid reviews, featured articles and product safety, among various other factors.

“In today’s economy, consumers have multiple choices for pretty much everything: coconut water, sneakers, airlines, and cell phones,” Richmond says. “Consumers are increasingly curious and conscious of your ingredients, labour practices, and competitors.”

Every buying decision I make is weighing needs against wants and cost against value. And value isn’t just about the hard numbers. With so many companies competing on price, understanding what single income homes value is a competitive edge they should consider.

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Single-income families need to buy things, too

Furnishing my first home post-separation, and buying food and clothes for myself and my children, most certainly involves a myriad of emotions, every time I shop.

Now that you know we are out there, in large numbers, wanting to buy and needing to buy, businesses also need to recognize that we can and will buy.

The reality is that every household needs to buy things. Single-income households have the same needs, but our means are different.

This is particularly true of households with growing children. As a single mom with young teenagers, all expenses take a significant bite out of my wallet.

The real cost of raising a family

According to Statistics Canada, the cost to raise a child from birth to age 17 is just over $290,000 — for each child! That means the average child costs $17,000 per year — but only if the child lives in a household with two parents. Simple math suggests that each earner is responsible for about $8,500 in child-related expenses per year.

For one-parent families, the average annual expenditure on each child is closer to $13,500. Again, simple math suggests that the single-income earner pays more than 45% more, per child per year.

And that’s just until age 17. As we know most kids don’t leave home, let alone for good, when they graduate from high school.

We talk, so you better start listening

I’ve already explained how consumers buy (with emotion!) and I don’t have to tell you that choosing a couch for your living room is based on more than the price tag: Will it physically fit in the space? Will it be able to endure my children? Do I want to pay more now for better quality so that it lasts longer? Will my budget even allow that?

Chances are better than not I’m going to turn to my single-mom network and ask for recommendations on where I can get the best bang for my buck to furnish my space. Companies that realize the value we provide are more likely to come up when I seek this input. If you market to us, we will recommend you!

Putting a price on loyalty

Research conducted by the Harvard Business Review found that companies that focus on the value of Net Promoter Scores (a fancy way of saying the people who recommend or vouch for you) tend to reap the rewards in their bottom line.

“Loyalty leaders — companies at the top of their industries in Net Promoter Scores or satisfaction rankings for three or more years— grow revenues roughly 2.5 times as fast as their industry peers and deliver two to five times the shareholder returns over the next 10 years,” the study found.

“Yet companies and investors continue to prioritize quarterly earnings over customer relationships.”

Let’s take a look at an example of a company that did just that.

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Think outside of the box

About 20 years ago, the largest condo developer Tridel began to focus on single women as homebuyers — and it paid off.

Back in 2013, Jim Ritchie, senior vice president of sales and marketing for Tridelsaid single women accounted for one-third of all new sales. That’s a rather large chunk.

In fact, at the time, the Globe and Mail said young single women were becoming a ‘dominant force’ in the condo market and that developers who acknowledged that were shifting their focus to cater to them.

“Developers have taken note, and are responding by designing buildings and individual units to suit their tastes and interests, whether it's improving the quality of lighting, or installing security cameras in parking garages, or creating floor plans that maximize storage space.”

Tridel understood what bulk buying costs fail to: Maximizing space storage is a key factor for families and bulk buying definitely does not fit into that neat little package.

Value the undervalued

The 2016 census showed that in the year previous, working women earned an average annual salary of $35,461, compared to men who earned an average annual salary of $48,059. Do you know what that means to women bidding on homes? We lose out to men who are better able to afford them.

Detached housing, in general, does not support the needs of single-income homes, with kids or without. They were built with families in mind, who needed space and have better means (i.e. two incomes) to afford it.

In 2021, the Walrus wrote an article speaking to the challenges faced by a single woman’s ability to live in post-war-build communities, such as the Etobicoke suburb of Thorncrest Village. This area, in particular, was built exclusively for detached housing. When speaking about the community, Marshall Foss, the neighbourhood’s lead developer, described Thorncrest’s layout as an asset that ensured “your property values and your living values are secure and stabilized.”

For whom, though? Two-parent, two-income families..

Families come in many forms

But what of single women?

“While policy preference for single-family housing was established with the nuclear family in mind, it did not respond to the complexities of the female experience,” write the author of that 2021 Walrus article.

“Because the zoning effectively prioritized the development of single-family housing, as opposed to housing affordability, the social networks of divorced women were weakened because the neighbourhoods where they lived during their marriages did not offer an adequate supply of housing affordable to them when they became single.”

These women had nowhere to go in their own communities when they became single. It simply was not built for them.

Thankfully, today, the federal government is acknowledging that single women need better accessibility to housing in Canada.

In a 2021 report released by the CMHC , the federal government said it aims to allocate 33% of the National Housing Strategy’s investments, with a minimum of 25% towards serving the unique needs of women and their children. Further, the report acknowledged that women are more likely to be lone parents than men (13.2% compared to 9.6%).

In other words, the government understands that it’s hard to live on one income, especially for women, who make less on the dollar than their male counterparts and are more likely to be single parents.

Businesses should take the government’s lead.

It’s because my money needs to be spent in order to provide for myself and my family. We need a place to live. We need food on our plates and yes, mayo on my sandwiches and toilet paper in the bathroom. I have an income and buying power. And I am but one, of many just like me, who struggles with paying more for less, when my needs are more and my means are less.

It’s not just because we are many. It’s not just because we have needs, too. It’s not even because it’s good for business.

Sources

1. Statistics Canada: Population estimates, quarterly

2. Medium: Why People Buy Things, and How to Make Consumers Fall in Love with Your Products

3. Statistics Canada: How much do Canadian families spend raising a child? (November 30, 2023)

4. Harvard Business Review: Are You Undervaluing Your Customers? It’s time to start measuring and managing their worth (January-February 2020)

5. Canadian Mortgage and Housing Corporation: Serving women and their children through the National Housing Strategy (2021)