When I had my first baby, I was overwhelmed… with joy, many wonderful gifts from family and friends as well as lack of sleep. With all honesty, it’s a time I look back on and admire as nothing else compares to the wonderful journey of having a baby.
Part of becoming a first time parent is received tips, suggestions, advice and books on parenting. However, a topic that’s often off everyone’s mind before and right after having a baby are family and personal finances, including your newborns’! I figured the following out on my own and I’m sharing my “Financial Advice for First Time Parents” to help make things more organized and easier for you.
BEFORE YOUR LITTLE ONE ARRIVES:
There are many predictable life changes most of us experience. Buying a home, entering or leaving the workforce, health challenges and relationship changes are all examples of normal life transitions. You may not realize this yet, but once you have a baby, all these changes and transitions become more difficult as the decision you make now affect a lot more people who are close to you.
Your baby means everything to you so it is only natural that you want him or her to enjoy all the things life has to offer. Life insurance coverage for yourself and your partner will help to create a financial foundation for the future. Insurance can work as a flexible asset that grows along with your child(ren) and can provide:
- Insurance for that which you can least afford to lose: your life, your income and your life
- Cash to cushion for emergencies
- Cash for education
- Cash to pay off personal obligations
The type of life insurance you choose depends on your situation. You should also review:
- Work coverage and update relevant information.
- If you have existing life insurance, ensure you contact your agent to let them know about your exciting life change.
BABY IS HERE!
First of all, make sure baby is well (eating, sleeping, happy!) and you’re getting used to the new everyday dynamic i.e. lack of sleep.
Doctor… Family Doctor or Paediatrician?
In Ontario, children under the age of 17 can choose to have either one. Did you know you can pretty much choose any paediatrician and he/she will take you as long as you call their office before you and your baby are discharged from the Hospital? Once you have been discharged from the hospital, only Pediatricians taking new patients will consider taking you and for that you will need to be referred by your Family Doctor. If you want to look for a Doctor in your area, review the College of Physicians and Surgeons of Ontario.
From a logistics perspective, here are the basics:
Once your baby is born, you can use the newborn registration service to apply online (smartphone!) for four important government documents for your baby:
- Birth Registration
- Birth Certificate
- Social Insurance Number
- Canada Child Benefits, including the Ontario Child Benefit
Start Saving for Education:
Many of you have heard about and will likely contribute to a Registered Education Savings Plan (RESP) – individual or family plan. To set an RESP up, you will need to get a SIN for your baby. In a nutshell, in an RESP:
- Contributions are eligible for Canadian Education Savings Grant (CESG) (subject to maximums – 20% up to $500 per year)
- Combines savings with growth potential
- Relatively flexible rules for beneficiary designation
- Contribution schedule is flexible (within maximums)
- Retention of control over how money is invested
- Depending on holdings, investments may be easy to redeem
Will a RESP be enough and will it provide sufficient flexibility?
- Capital may not be guaranteed
- Funds must be used for the purpose of assisting children’s post-secondary education at approved institutions.
- Portfolio requires regular monitoring
- Some plans require an initial deposit of $500
Consider combining a RESP with permanent cash value life insurance. It’s a great way to create a financial foundation for the future. Insurance can work as a flexible asset that grows along with children . A permanent cash value life insurance policy can enhance your clients’ educational savings plan and provides many other benefits.
Lastly, take lots of pictures and videos of your precious bundle of joy! They grow so fast so plan ahead and cherish every waking moment.