Financial Planning for New Parents with Aimee BurtonJan 23, 2024
Let’s face it - kids can be expensive, and having a family brings on a whole new set of financial obligations that can catch some of us off guard. But taking a few simple steps early on can really help put your family on the right track in the long run, even without a lot of capital up front. Even in pregnancy, paid maternity leave is not a given for a lot of professionals, or is a minimal amount insufficient to cover the cost of living.
This is why we are excited to have Aimee Burton on today’s episode! She is a licensed financial broker and agency owner, based on Vancouver Island. Her and her team of licensed advisors focus on providing free financial education to individuals, families and business owners and helping people create actionable financial plans to grow & protect their wealth, plan for retirement, and feel great about their money. She loves helping new parents especially, since becoming a mama propelled her into this new career!
Here are her top 5 financial planning tips for new families.
1. Know your Numbers & Plan for your Own Retirement
Many individuals have a vague understanding of their finances, understandably as everyday life gets in the way and causes us to lose track of our spending (and even income!). But it’s important to have a clear understanding of all your expenses, and how it compares to incoming funds. With that understanding, you can set more concrete goals on how much money is needed to keep a desired gap between money flowing in and out, to avoid living paycheck to paycheck, and be able to work towards more robust financial goals.
This may seem obvious, but your own retirement plan can have a big impact on your family’s and children’s future financial wellbeing. We must take care of ourselves to take care of others! Not having any sort of retirement plan in place can place the burden on your children, or remove any potential funds that should be growing for their education or future, in case of any adverse events.
2. Registered Education Savings Plan (RESPs)
The Registered Education Savings Plan is a tax-free investment account that helps parents and families save for a child’s post-secondary education. When investing into an RESP, the Canadian Government will match investments up to 20% up to $2500 per year. Additionally, lower income families can be eligible for certain training grants if you have an open RESP with children between the ages of 6-8.
For more information and details on the program, please check out the Government of Canada Website: Registered Education Savings Plan.
So it's worth it to open an RESP even if you can't put a lot of money into it. Just To be able to, get those grants and things. Yeah, and
3. Canada Child Benefit (CCB)
The Canada child benefit (CCB) is administered by the Canada Revenue Agency (CRA). It is a tax-free monthly payment made to eligible families to help with the cost of raising children under 18 years of age. The CCB may include the child disability benefit and any related provincial and territorial programs. It’s quick and easy to apply online, but it’s important to note that individuals must be up to date on their tax filings to be eligible as the benefit amount is based on your income the previous year.
More more information, visit the Canada Child Benefit website!
4. Life Insurance
Aimee always recommends individuals to get their own personal life insurance product. But if you are in the situation where you haven't taken out any life insurance yet, or if it has been a long time since your policy was obtained, it is a good idea to review your coverage as your family grows and needs change! Life insurance can take many forms, including term insurance or permanent, and some can allow you to use the policy as a tax-sheltered investment account.
Tune in to the episode for even more information on how you can open a life insurance policy for your kids (and simultaneously another profitable investment account)!
5. Make a Will
We understand just thinking about wills can be stressful as no one wants to imagine a future where they aren’t around to take care of their loved ones. But it can be done quickly and easily with a variety of online tools, and is essential in the advent that something happens - not only for financial succession, but to ensure your kids will continue to be safe and taken care of by someone trusted and reliable.
If both parents are suddenly deceased, the child goes to the care of the government and a plan is put in place which may not be your ideal scenario. It’s not a fun conversation to have, but it’s an important one.
Last but not least, making efforts to clear yourself of any debt is essential to future financial success. If paying it off seems like an overwhelming burden, there are ways debt can be consolidated to make a manageable, concrete payment plan. For more great tips, be sure to download Aimee FREE 5 Step Financial Checklist for Parents and check her out online!
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