Buying your first home is terrifying! You have so many questions, fears and expectations with no one really to go to in order to talk through your worries. RBC Canada understands this and has assembled a team of experts (Lawyer, Realtor, Mortgage, Home Builders and Design) to answer all of those burning questions you may have at their #RBCFirstHome twitter chat.
Follow @RBC_Canada and the #RBCFirstHome hashtag on June 16th from 8:30 pm ET to 9:30 pm ET. The bonus? Five lucky participants will have the chance to win one of five $100 gift cards – woot woot!
Jump in at any time with your questions and feel free to give others advice too! We are all in this together.
Saving for your child’s post secondary education can be daunting – not only for yourself but for your child as well. They are at an age where they may not yet understand personal finances and the financial obligation that goes along with attending post-secondary institutions. Personally, I did not understand the OSAP loans I signed off on at that time, and I wish I had paid more attention – or at the very least had a second check – to make sure I wasn’t making a mistake.
Saving is an essential part of life, and the earlier our children learn how to do it, the better it will be for them in the long run. Helping your child understand the importance of saving for their own education will not only give them pride in their accomplishment, but foster sound financial skills later in life. It will also encourage them to take control of their education, as they have more at stake when contributing their own finances.
An RESP is a helpful tool used by parents (or grandparents) to help finance higher education for their child. Opening an account is pretty straightforward, and involves contacting an RESP company (such as Heritage Education Funds) to set up an account. Once the account is open, growing the account is all up to you and your child!
Encouraging your child to contribute their own earned money towards their education is important, but may seem like a daunting task at the time, as your child has other priorities. Here are some helpful tips I have learned along the way to encourage your child to save towards their education in an RESP:
1. Take the first step in encouraging financial independence by setting up a bank account for your child. Both of my children have their own bank accounts, bank books and debit cards (the cards are mainly used for deposits and not purchases at this time) and this was a major stepping stone for them. I want them to understand finances, how money works and how quickly it can depart! Children need to appreciate the value of a dollar, as this will better help them appreciate the cost of their education.
2.Encourage your child to be part of the monthly family budget. An important part of attending a higher education institute is dealing with the extras: utilities, rent and groceries. This is one of the areas I lacked knowledge of when I went off to university. Since a portion of my RESP’s went to financing my room and utilities, I needed to understand how they worked and how to budget for these costs, but I had no clue. So of course I overspent in these areas and my budget never balanced.
3. Start up an allowance system for your child. Having a bi-weekly allowance for your child is important, regardless of their age. This allows your child to allocate their money for wants, needs and savings. Our boys put their savings into their RESPs at the end of the month. It’s important to let them view their statements, so they can see their education fund increase month to month. If there’s an online option, allow your child to view it monthly, so they learn to appreciate growth over time.
4. Once your child reaches the working stage, encourage them to contribute money to their RESP. This will probably be the hardest thing to do, but it is so important for them to save rather than splurge all that hard-earned money on clothes, movies or food. This is where all previous education on budgets, utilities and being involved in the family budget will pay off. Your child will have a greater appreciation for their pay cheque and will spend it wisely.
5. Have your child create their own post-secondary education budget. Sit down with them and help them figure out tuition, supplementary fees, textbook fees, rent and utilities (if they are moving away for school). Use this as a tool to figure out how much money should be contributed monthly into their RESP. This is an area I wish I had concentrated on more before I made my educational choices. I was never involved in the family budget prior to living on my own, so I had unrealistic expectations of the costs, which forced me to rely on loans.
Teaching our children how to save for their post-secondary education is an essential lesson that will help them later on in life as they leave our homes to start their own home.
To help you on this journey, you can now enter to WIN a $50 gift card from Tim Hortons sponsored by Heritage Education Funds. Contest is open to Canadian residents only and ends on May 17th, 2015.
As we find ourselves near the end of the tax season (and if you haven’t yet filed your taxes make sure you get on it now to avoid unnecessary late penalty fees!) you may have noticed a slight increase in your return.
Why are families seeing more on their return this year?
The Canadian government has recognized the growing costs of raising a family and has implemented new changes as well as credits to assist families. These changes include:
New Family tax cut – families can claim a credit up to $2,000.
Increased children’s fitness tax credit – this is a huge bonus for many families, as the amount eligible to claim is up to $1,000! This has helped out many families that I know personally as sports fees are not cheap at all. Our soccer fees alone this year for one child were $565 without even factoring in exhibition games, rental fees and more.
An increase in the amount eligible to claim for child care expenses. For a child up to the age of seven, the amount has increased to $8,000. A child aged seven to sixteen can have child care expenses claimed up to the amount of $5,000.
Universal Child Care Benefit increases! A monthly increase to $160 for children up to the age of six. Children six to sixteen receive $60 a month. This increase won’t be seen until July but it’s definitely something to look forward to in the next couple of months.
Talk about an exciting time for parents and families! With the rising costs of living and raising a family, these tax credits come in handy during the tax season in order to get the most out of your tax return.
While it is always exciting to receive a return perhaps instead of splurging (which I used to do all the time pre-kids not even going to lie about that one and it is still tempting now), why not instead maximize your return and invest in an RESP for your child?
A post-secondary education in Canada is expensive, but well worth it to help our child get where they want and need to go. In my first year of university, tuition was roughly $5,000 (not including supplementary fees) and my books costs me well over $1,000. This did not even include the smaller things that I needed (computer, paper or even groceries!). My experiences at university have shaped how I have approached saving for the future education of my own children. An RESP was the first account I opened for my boys after giving birth. I do not want them to have to live with the same financial constraints I had to while away at university.
Saving in a RESP Made Simple
Your first step is to register an RESP for your child, which can be as simple as making a phone call to a reputable RESP company, such as Heritage Education Funds. After you have chosen the right account for you and your child, the next thing to do is start saving!
Look for different ways to save:
Contribute to the account monthly with an amount that you feel comfortable with. When we first opened up the accounts, we could only contribute $25 a month. As our finances changed, so did our contributions.
Consider using the Universal Child Care benefit to pay into your RESP.
Use your tax return to deposit into your child’s account.
Take advantage of the government grants that are available to you – this is extra money for your child!
I still remember when I took this picture and time has flown by so fast since then. Soon enough, that will be a real car in the picture and perhaps they will be heading off to school! *tears* The best gift I can give them is their RESP’s to help further themselves once they leave our home.
How do you invest your tax return? How important is an RESP to your family?
Disclosure: I am a Heritage Mom. All opinions expressed are my own.
I feel like cringing whenever I hear that word! I am not going to lie budgeting is hard. We live in a society where we want and need things in that moment. Having to tell ourselves to slow down, set aside money, pay off debt and live in the moment can be hard.
While I am by no means a financial expert, I have learned many valuable tools over the last few years. In the last seven years, I have paid off my University debt ($15,000), planned and held our wedding (using no credit) and put a down payment on our home. This was met with sacrifice and hard work but it has been well worth it.
My first step was to write it all down. I love my spreadsheets! So pop open Excel or if you don’t like that Google Drive offers a great spreadsheet. Make a table showing the bill item (rent/mortgage, hydro, water, gas, etc..) and the monthly amount due. Make sure you include all debt you owe, an amount for food (for a family of four we set aside 500/month), an amount for transportation (whether it be gas or bus fare), bank fees, child care and an amount for savings.
Here is an example:
For my savings category, it is important that you have something in mind for this as it may affect how much you put into this category each month. Are you saving for a trip? A down payment? Wedding? Rainy day? Pay off debt? Take that total amount and divided it by the amount of time you need to pay it off in. Ex) You need to pay a down payment of $15,000 in three years: 15,000/36=417.
Add up your outgoing payments at the bottom.
Next you want to look at all incoming income you have. Look at your income, your partners (if applicable) and any monthly tax credits (baby bonus, childcare bonus, etc..) I like to add this below my outgoing amounts.
Here is an example:
It is important to leave yourself some breathing room with your outgoing and incoming funds. Emergencies happen and you want to make sure you feel comfortable having enough funds in your bank account. This is what I like to refer to as our “play” cash.
What to do if the money isn’t adding up?
This happens to a lot of us! Here are some tips I suggest:
Decide what you can do without. Do you need that home phone? Expensive cell phone plan? Probably not. Make the necessary cuts where you have to. Eat in more, bring coffee to work, don’t go out for work lunches. Sacrifice isn’t always easy but it is well worth it.
Price match and use coupons. This has cut our grocery bill substantially and only requires minimal prep work.
Earn more money. While this may seem hard at first but even earning an extra $100 a month makes a difference.
Consolidate. If you have large amounts of debt and high interest rates see if you can consolidate your debt into a lower interest rate. Paying off your debt will help you greatly each month. Make sure you cut those high interest rate cards after!
Be honest. Keep open communication between yourself and your partner. Speak to each other about your spending habits. Talk about major purchases.
How have you designed your budget? Do you have tips for keeping to your budget and increasing savings?
One of the most important documents you will ever develop for your family is putting together a will to ensure that your family and friends know your wishes and that the minor details are taken care of.
Have you thought about who your estate will go to? What if your children are minors – who will take care of them in the event that both your spouse and yourself pass away? While these are not the most pleasant questions to have to ask yourself they are necessary to ensure the security of your family in the event you pass away.
What is a will?
A will is a legal document that will grant your executor the power to divide your property, name who will control your estate and if you have any minor children who will be their legal guardian to care for them when you are not there to do so.
Why does this matter?
This matters for so many reasons. Without any legal document containing your wishes, your estate could go undistributed or be distributed to individuals you did not wish your estate to go to. Your family may not be able to access the necessary funds that they need. Your children may not go to the guardian you had spoken to and wished for them to go to in the event that something happened to you.
So what is holding you back from getting a will? For us it has always been finding the time and the cost of creating a will, not to mention the whole concept is scary. I am terrified of leaving my children alone but it is because of them that I know how important it is to ensure my will is complete and up to date.
Here comes the easy part! FormalWill.ca has made preparing a will simple and convenient. You can now complete your will online from at home in a few, quick steps.
First step: Speak with your spouse about your wishes and who you want to step in as guardian and executor if your spouse does not survive you. You want to make sure this person is aware of you appointing them as guardian and executor. Now this may be an awkward conversation (trust me on this one!) but you will feel so much better after you have done so!
Second Step: Visit FormalWill.ca and create an account. This will take you literally seconds and you will receive a confirmation email with your account details. On the second screen you will enter basic information (name, where you live, spousal information, children).
Third Step: Name your beneficiaries and executors of your will. You can name up to three executors. If you have specific gifts in mind (wedding bands, special jewellery) you get to name those gifts and who you would like them to go to. If your children are minors at the time you can list up to three guardians to be appointed to care for them as well as the age they must be in order to receive money held in trust for them. Any donations? Name them here.
After making a payment of $69 CDN, your will is complete! Whew! What a relief, right? The will is sent via email to the email account you entered on the initial set up. This email will contain instructions on how to have the will signed and witnessed as well as suggestions on how to safely store your will.
FormalWill.ca has simplified the process of creating and putting together a will for individuals and families. With three easy steps, those you love will have their future secure in case you aren’t there to be able to do so.
Have you started putting together a will? Have you looked at possible executors and/or guardians for your children? If not – what is holding you back?
Disclosure: I received the above mentioned product in exchange for this review. All opinions expressed are my own.
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