Goal Setting Why set financial goals?

Do you invest? You don’t need to be debt free to put money into investments. Investing simply means putting your money to work so it can make more money for you. For most people, investing is not only prudent but necessary. There are many different ways to invest, including putting money into stocks, bonds, mutual funds and real estate, to name just a few.

1. Start investing early. Invest something, regardless of what your income is. Imagine even investing as little as $25/month, this can REALLY add up over time. It is not always about how much you save but for how long, it is the power of compounding interest.
2. Make investing a habit. Make a habit of investing 10% of your paycheck. Ideally you should treat investing like a bill that you account for in your budget. That way you don’t spend all that you have and run out of funds by the end of the month … thereby not having money to put into your long-term saving/investing goals
3. Plan for the unexpected. Build up an emergency fund, approximately equivalent to three-months of take home pay.

As tuition and living costs rise, it becomes increasingly important to save for what matters. While the idea of saving enough money to provide your child with a university or college education may seem beyond you means, opening a Registered Education Savings Plan (RESP) can help make it happen.

Open an RESP Account

An RESP is a special account that helps families save for post-secondary education. Funds within the plan will grow tax-free until the beneficiary named in the RESP enrolls in education after high school and withdraws funds. In addition to the interest you may earn on your investment, you may also receive yearly contributions from the Canada Education Savings Grant (CESG) based on your own contributions. These grant contributions can add up to a significant amount over time.

To give you a better idea of what you can save with an RESP, check out this example.

Let’s say your child is now 10-years-old.

*These numbers are an estimate only. Rates of return will vary.

After deciding on an RESP account, sit down with your child and discuss how you will make contributions. Both you and your child should be putting some money in this account. Set up a plan that is feasible and determine a percentage of gift money, allowance and part-time job income to be put away.

See this helpful RESP PDF brochure for more details.

The Canada Learning Bond (CLB) is money that the Government of Canada may deposit into a Registered Education Savings Plan (RESP) to help you save for a child’s education after high school. The total amount the government deposits can be up to $2,000. Applying for and receiving the CLB will not affect any other benefits you or an eligible child receives.

Through the CLB, the government will deposit money in the RESP for an eligible child every year, even if you do not make a contribution.

The CLB is available to children from low-income families who

• were born on or after January 1, 2004
• are residents of Canada
• have a valid Social Insurance Number

It is the primary caregiver (PCG) or, as of January 2018, their cohabiting spouse or common-law partner, who must request the CLB on behalf of an eligible child. The PCG is the person who is eligible to receive the Canada Child Benefit for that child.

The CLB includes

• $500 for the first year of eligibility
• $100 for each year the child remains eligible, until the calendar year they turn 15

In addition, the Government of Canada will deposit $25 in an RESP to help cover the costs of opening the plan.

A child can receive the Canada Learning Bond even if you do not contribute any money to the RESP.