Four Ways Kids Can Help your Finances

Having no kids can save you some money, but so can having them.

Having children is a big financial commitment, that much is true. From childcare to extra-curriculars and education, the costs can add up. In fact, the average cost to raise a child from birth to aged 18 now costs $253,000, according to Loans Canada. It’s the reason why many are now delaying parenthood until they are financially secure.

Those already raising children will be glad to know that there are financial perks.

Here are four ways children enrich your life and finances:

1 You’ll think critically about your expenses

People are often more relaxed about their budgets when they must only worry about themselves and often delay saving for their futures. When a child is introduced into the mix, they can make you reassess your spending habits. They’ll rely on you as their parent or guardian for all their basic needs, and you’ll want to provide them with a stable home. This may mean setting aside an emergency fund or preparing a will.

You may opt to have home-cooked meals more often or plan at-home group activities instead of dining out and taking more expensive excursions. These small changes foster an opportunity to save you more money for the future and spend more time with your loved ones in these more intimate activities.

2 You’ll protect your family’s financial future with life insurance

If you have dependants, life insurance is one of the soundest financial investments you can make. In the event of your passing, the insurance policy could cover any funeral expenses our loved ones may incur and can help make a difficult time more bearable. It could also ensure that they continue to enjoy the same lifestyle you provided for them until they’re self-sufficient adults. This includes covering bills, large debts such as a mortgage or car loan, and education costs for their future.

Canada Protection Plan offers various life insurance plans to fit your lifestyle needs. Policyholders may also gain access to complimentary Member Benefits from Foresters Financial, which include orphan benefits, competitive grants and scholarships, financial counselling and discounted legal services

3 You’ll realize the importance of a healthier lifestyle

It’s easy to brush off minor health conditions when you’re young and don’t have any dependants. However, those untreated conditions may eventually contribute to major illnesses as you age. Lifestyle changes that include a healthier diet and more physical activity will reduce your risk of illness and premature death, ensuring you’re around to support your kids and celebrate all their milestones.

4 You’ll be eligible for tax credits and deductions

To help offset the costs of raising children, the federal government of Canada has introduced several tax deductions and credits in recent years for eligible parents and guardians.

These include:

• Childcare expenses: you can deduct the costs of having someone look after your children under the age of 16 while you work or go to school.
• Adoption expense tax credit: any costs related to adopting a child under the age of 18 can be claimed.
• Registered Education Savings Plan (RESP): An account that’s used to help you save for your child’s education. The Canadian government also matches 20% of up to $500 per year of your contributions.
• Canada Workers Benefit: A refundable tax credit to provide tax relief for eligible working low-income individuals and families who are already in the workforce
• Canada Child Benefit (CCB): A tax-free monthly payment to help with the cost of raising children under the age of 18.

You can also qualify for additional childcare benefits, depending on your provincial jurisdiction.

It’s no secret that raising children can be financially demanding, and the decision to have children is a serious one. However, being a parent may also reward you with new experiences, lessons and, yes, financial benefits.

SOURCES:

• ¹ https://loanscanada.ca/infographic/infographic-the-cost-of-raising-a-child-in-canada/
• ² https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/family-child-care-caregivers-deductions-credits.html
• ³ https://www.canada.ca/en/revenue-agency/services/child-family-benefits.html
• ⁴ https://www.canada.ca/en/services/taxes/child-and-family-benefits.html