- Make a will
During this happy time when sleep is scarce, making you will probably be the last thing on your mind. And yet… who would take care of your child if it happened – gods, no! – that you and your spouse die? A properly drafted will allow you to appoint a guardian to watch over your children until they reach adulthood and establish a guardian of property or trustee to manage the money on their behalf. What if you don’t have a will? In the event of the parent’s death, the court could make all significant decisions regarding inheritance and childcare. Find a notary who will guide you through the process and ensure that your wishes are respected. - Open a Registered Education Savings Plan
A Registered Education Savings Plan (RESP) is an investment account designed specifically to help you save for your children’s post-secondary education. Not only do savings grow tax-free, but the first $36,000 of contributions are eligible for the Canada Education Savings Grant, which can reach $7,200 per child. When to start? There is no better time than now. Don’t worry if you can’t contribute the maximum of $2,500 per year. Putting $50 a month into it — or what you can — is a great start. Nothing says you can’t contribute more later.
Estimate how much you will need to save using the RESP Calculator.
- Take out life insurance
Life insurance is almost as necessary for a parent as for patience when a baby cries. After all, if something terrible happened to you or your spouse, you would want to know that your children will lack for nothing. If you already have life insurance, be aware that the arrival of a child (or that of an additional child) may mean an increase in the amount of insurance is necessary. If you don’t have life insurance, what type should you choose? Term life insurance covers your dependents if you die during a specified period. Permanent life insurance (or whole life insurance) provides guaranteed protection for life.
Estimate the amount of insurance you need using the Life Insurance Calculator.
- Get Critical Illness and Disability Insurance
Critical illness and disability insurance are arguably as important as life insurance if you want to protect your family members. Which one suits you best? Both provide money for illness or disability, but they work differently. Disability insurance replaces part of your income if you become unable to work due to a severe injury or disease. Critical illness insurance pays you a tax-free sum if it is established by a diagnosis that you suffer from an illness covered by your policy and are still alive at the end of the expected survival period. To help you assess the amount of insurance you need, look at the family’s expenses realistically.
Estimate how much insurance you need using the Critical Illness Insurance Calculator.
