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6 Tips: Resources and Investments For Your Child

May 22, 2013
3 mins
A mother hugs her daughter

There’s no doubt; children are expensive, but rewarding. There are a number of ways to plan ahead of time, though, to keep your finances on track. For one, if you fall into a lower tax bracket and extra money is a struggle, you could always take advantage of some of the government income assistance programs available to families with children. If you have money to spare, it’s never to soon to plan for your child’s education. Here are a few resources and investments for your child that can lend a helping hand in preparing for their financial future.

Government Income Assistance Programs for Families with Children 

The Government of Canada provides financial assistance to low income families through a number of programs. Take a look at these three programs and click on the link to see if you qualify.

Canada Child Tax Benefit: The Canada Child Tax Benefit (CCTB) is a tax-free monthly payment made to eligible families. The purpose of CCTB is to help families with the cost of raising children under the age of 18.

Employment Insurance Maternity and Parental BenefitsIf you are pregnant, recently given birth, are adopting a child, or are caring for a newborn, Employment Insurance (EI) can provide you with maternity and parental benefits.

Universal Child Care BenefitTo help cover the costs of childcare, the Universal Child Care Benefit (UCCB) program issues a taxable $100 monthly payment to families for each child under the age of six.

Planning For Your Child’s Education 

Now, more so than ever, parents are realizing the importance of post-secondary education. According to the 2006 Census, Canadians with a university degree earned an average annual income of $50,048, while those with a high school diploma earned an average of $37,403. Nowadays, it’s estimated that two out of every three jobs requires some sort of post-secondary education, whether it be college or university. But that education isn’t cheap. The average annual undergraduate university tuition for a full-time student was $4,917. And that cost doesn’t include housing, books, transportation, or food.

Choosing an RESP

In order to put your child on the right path, you can start saving now using an RESP or Registered Education Savings Plan. When you use this type of special savings account your money can grow quite quickly, especially since Canada Education Savings Grants and the Canada Learning Bond are offered exclusively to RESP contributors. 

Opening an RESP is pretty straightforward. You’ll need to provide your Social Insurance Number (SIN) to an RESP Provider; most financial institutions offer RESPs.

When your child is old enough and has been registered with a qualifying educational institution they are then eligible to receive payments from the RESP you set up for them. There are some stipulations that must be met, though. For instance, in order to qualify, the course your child chooses must last at least three consecutive weeks, with a total minimum of 10 hours of work or instruction per week.

In the event that your child chooses not to go on to post-secondary education after high school, you will not be taxed on the amount you contributed to the RESP. However, you will have to pay taxes on any interest earned.

Save Sooner Rather Than Later

I know it seems like a long way off, but ask any parent – they grow up quick. Before you know it, they’ll be off to college or university and you’ll wonder where the time went. Help them make the most of their young lives by giving them a head start.  


The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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