good investments

I am three months into my maternity leave and I hate getting my dreaded visa bill.  This kid thing is damn expensive!  I’ve read the lists of what you MUST have and what is a “good investment” including good quality furniture, etc., but the other unexciting things to buy that have been wearing on my mind right now.  I have been falling into the habit of buying cute baby clothes for my little girl, at the same time as I am donating clothes that she’s never worn…it is a terrible cycle.  I buy used items for her and, on my limited maternity leave paycheque from the government, I’m cutting corners where I can.  However, I’ve made a point of recently taking care of all three of these key expenses that many overlook because I do think it is too important to be forgotten.

A Will

As soon as you become a parent, you should take the time to complete a will. Even if you have little in the way of assets or investments, you need to make your wishes known in case something happens to you.  Guardianship of your child in case something happens to you and your spouse is so important, don’t leave that decision to someone else.  A one-time cost of $500-600, depending on your lawyer, is well worth the investment.

Life Insurance

I have had personal life insurance since I purchased my first home, but it seems so much more important once there is a child in the picture. My original life insurance covered my mortgage and was payable to my spouse.  Now, my insurance agent is suggesting covering the mortgage plus $250,000 per child to be paid to your spouse.  As I’m still reasonably young and my life now is building assets, I purchased a term life insurance policy for 20 years paying out $750,000 to my spouse in the event of my death.  This piece of mind is totally worth the $50/month.  I can forgo expensive coffee and a few outfits that she just won’t wear and I try not to think about the fact that I’m worth more dead than alive!

RESPs

Education, as we know, is so important and I can only see that continuing. I benefitted from an RESP plan when I was in university and it was such a gift from my grandmother for me and my sister.  It didn’t pay for everything but it did help tremendously.  Thankfully as our education system is changing with many options, so are the plans.  RESP, or Registered Education Savings Plan, is an umbrella term for investments that are registered for your child’s future education.  You can purchase anything you like from stable to risky, and dollars and the government encourages this by supplying grants or matching some of your investments as long as it is identified as an RESP. There are plans that only cater to RESPs with companies like the Canadian Scholarship Trust and Heritage Education Funds but you can also go down to your bank and invest in an RESP for your child.  I was looking for a plan that worked best for me and my family that also has flexibility for the release of these funds once my children are starting their post-secondary studies.   In reality, right now, I don’t have monthly income to commit anything but my daughter’s grandparents want to kick off the funds with a lump sum payment each and once I’m working again I’ll contribute $20/month to start with the idea to transfer a much larger amount once we don’t have daycare costs. I know that I won’t feel the pain as much then of a larger monthly contribution.  As an interesting note, the BC government gives a $1,200 grant to all children in BC up to the age of 10 years old, so get your child registered for this even if your child is older as that is just free money you may be unknowingly turning down.

Be sure to talk to qualified professionals – lawyers, insurance agents, investment managers and anyone you trust.  I did, because I wanted the piece of mind that my baby is fully covered… I’ll likely still make the wrong decisions often and get those ugly credit card bills, but I need to know that these three items are taken care of.  Investing in her future is too important and she can get a few more of her things used in the meantime.

 

Editors note: The opinions and information furnished in this post are not intended to be professional advise and is not intended to replace consultation with a qualified advisor or industry professional. 

 

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