Friends of ours do premarital counseling, and due to the lack of financial education in Canada, I thought I would create a simple personal finance reference guide that our friends could use for the next couple they counsel. Although it is meant for couples who are first starting a new life together, some of the information might be helpful to people in other stages of life as well. So I thought I would share it on my blog as well.
RESPs
-Children need to have a SIN number, so apply for one as soon as your child is born.
-Government gives you 20% grant on up to $2500.00 of contributions per year for your child.
-Can be set up at any financial institution in Canada.
-Choose investments that are meant for long term growth such as mutual funds. Stay away from term deposits as your money won’t grow.
-Depending on your income, your child may also receive free money from the government in the form of Bonds so even if you can’t afford to put a lot into an RESP, set one up as soon as you have your child’s SIN, and when grandparents, etc. give your child money for birthdays, etc. just pop that money into the RESP.
-Note that it is wise to open a family plan RESP if you have more than one child.
-Select a financial institution that doesn’t charge any fees to have an RESP or to set it up.