Finances for growing families

Ahh, a new baby.
In spite of the diaper changes, teething and complete lack of sleep that comes with parenthood, you’d do anything for that little bundle of joy.

And your care doesn’t end with storytime and midnight feedings – it also includes financial planning for their future.

Planning for that may seem daunting among everything else, but you won’t regret making those decisions when your baby son or daughter heads off to college or to begin a new career.

So where do you start?

The first one is easy: obtain your child’s Social Insurance Number (SIN).

Obtaining your child’s SIN enables them for the first savings product I recommend for growing families: Registered Educational Savings Plan (RESP).

They’re an investment vehicle which allows parents to save for their child’s post-secondary education. And contributions are matched by the government to the tune of 20% for every $2,500.

What about a savings account? Not bad, but to be honest and frank, your money is better placed in an RESP.

Some parents deposit birthday or Christmas money into their child’s savings account through the years, but the same practice – which is a great one – can also be applied to your RESP.

Sporadic contributions are fine, and instead of trying to manage two different savings products, keep it simple, and choose one that offers your family a better bang for your buck.

Making financial decisions for your child’s future can be daunting, but luckily that’s exactly where I can help. And on top of that, I also have a growing family. You can rest assured that the decisions I suggest are often what I have already put in place.