Calgary Baby Guide 2022-2023

BUDGETING FOR
Baby
BY LAURIE AND GORDON BRANDEN
Every change in family structure such as getting
married, moving in together, or having children,
contains an evolving financial landscape. The
free online Budgeting for Baby seminar offers a
wealth of information on a variety of topics and
lays out the most important financial tasks that
often commence with the arrival of your baby.
The first thing you should do is assess where
you are financially. Look at your savings, your
maternity/paternity income, and what you
expect to get in Canadian Child benefits.
As well, consider your one- time and monthly
expenses that you will incur upon baby’s
arrival. This will help you formulate a solid
financial plan and help you to understand
what you want your future to look like.
If you haven’t done so already, consider your
options for life insurance and RESP’s as you
include your children’s needs in this
preparation. It can be daunting, but you will
feel so much better once you have a strategy
to provide for your child’s future and take the
necessary steps to protect your family, should
anything unforeseen happen in the future.
Why should you open a RESP? The cost of
a post-secondary education continues to rise
and saving early can help you achieve your
goals.
Flexibility: If you open an Individual RESP,
you can contribute into the plan up to a
lifetime limit of $50,000 per child. As the
subscriber, you have control over your
deposit amounts and can make changes
as you need over time.
Guaranteed free grants. The government will
match a percentage of your contributions!
Any money you put in, up to $2500 per
year, will be matched at 20% by the federal
government. If you can contribute the full
amount, this means your child’s RESP will
receive an additional payment of $500 each
year. Lower-income families may also qualify
for an additional grant issued every year they
remain eligible, independent of contributions.
Long-term, tax free growth. The money you
invest into the RESP, along with the
government grants, will continue to grow and
compound interest, year after year tax-free for
up to 35 years. The income and grants are
taxable to your child when they withdraw the
funds for their post-secondary studies.
Because students typically have lower
income, the tax rate is often minimal.
Anyone can contribute: Your friends or family
member’s can also contribute towards your
child’s RESP. This is a wonderful way for your
loved ones to help instead of giving toys for
special occasions.
Multiple options for the student: Students can
attend traditional schooling such as College
or University, or they can attend shorter
programs such as trades, practical
education, or online studies. If your child
does not pursue any post-secondary
education, you have other options. You could
roll the RESP to another child, roll the interest
into your own/spousal RRSP, or take the
interest as income to you as an Accumulated
Income Payment (taxes applicable).
6 • www.modernmama.com | CALGARY | A RESOURCE GUIDE | 2022/2023 Edition