Savings/Financial Planning for Baby?

[RandaPanda]

Hi ladies,

I'm just wondering if and what any of you have done for your existing LOs or, if you're a first time mom like me, what you plan to do financially. Like, starting an education savings plan, etc.

I'm just trying to figure out the smartest approach to investing in my baby's future, and if anyone has any experience with this, advice, or wants to share what they plan, I would love to hear it!

And, if anyone is in Canada (or even more specifically, Ontario) I'd be so grateful to know what some of you did...I know that there are RESPs, child tax credits, etc. through the Canadian government, but not sure how it all works and how to best benefit from the options available to us.

Thanks

 

[Nina83]

I want to start saving, but DH keeps reassuring me we're more than financially stable.
I'm always nervous when it come to money (I don't know how to handle it, DH is the better one and does all our bills and banking) and want to start saving so I can take more maternity leave.
We have started saving an extra small amount, and after August (we still have some payments from electrical stuff which finish in August) we'll put away more.
I just feel like I should be doing more. What I really would like to do though is start a savings for the baby, my parents never did that so I never had that extra money for learning or my wedding or mortgage. They just had to scramble. I'd like to save that from my kids.

 

[Mild Mango]

I live in the US, so I can't speak on Canadian benefits, but I plan to start a 529 college savings plan once the baby is born. I've also been toying with the idea of having baby shower guests contribute to the plan instead of getting us gifts!

Also, after the baby is born I plan to get term life insurance for me and my husband in case anything happens to us. If one of us died, I would want to make sure our kid would still be ok financially. Also, even if you don't work, I think it's important to get term life insurance to cover daycare/nanny expenses your husband would incur since you wouldn't be around to take care of the kids. I know it's a morbid thought, but I think its a must once you have kids.

Other than that, we're just trying to put as much as we can away for savings, retirement, and investments to make sure that if anything happens (job loss, family emergency, etc.), we'll be ok.

 

[Nikko88]

Same thoughts as Mild Mango. Term life insurance for my husband and I. We are looking into a 529 because the state of Maine provides a lot of incentives and matching funds.

With a new house and now a new baby on the way, we are continuously having to readjust our budget.

 

[Nina83]

Forgot about insurance, we had to sign up for life insurance when we got our mortgage. If God forbid anything happens to either of us whoever is left behind is covered! That is a must for families IMHO, children or no children.

 

[Sunseal]

Eek, I haven't even thought about life insurance..
I have a savings account open for my little boy, I plan on opening an account for this little one too when she is born. Keep putting in little and often and I've found it suprising how quickly it all adds up.

 

[junbait]

As some of the PPs from US have said, I'll be following pretty similar plan. We will be opening up a 529 savings account once the baby is born for college expenses and we already have life insurance for both of us if anything happens.

 

[MummyToAmberx]

We just opened saving account once baby is born..£10 a month till they are 18.

 

[Brightxeyes]

What I will start doing is simply putting £10 a month away, because even if money is tight, then that £10 a month still equates to a lot of money when they're older!

It'll be what I do until I look more into it and are better off money wise anyway

 

[Mrs Eleflump]

Hubby has always (even before we met) said that when he has kids, he'd like to put some money away each month in a savings account for them to use when they're old enough. So I think that's what we'll do.

Whether we'll open an account in our name and transfer it when LO is of age, or whether we'll do it in LO's name, like a junior ISA, I'm not sure. This may sound selfish, but I think I'd prefer to have it in our name until we see how responsible LO is with money - e.g. I'd have been fine with a lump sum in my own name as a late-teen/early 20-something if my parents had done this for me, but my brother at the same age (and maybe even now in his early 30s) would have just wasted it all on beer and tobacco.

We're going to try very hard to make sure our kids develop our sense with money, but if they turn out not to be financially responsible, I'm not happy handing them a large sum to do as they please with, I'd rather pay for something directly for them. We'll see, though, hopefully our LOs will be the same as us with money

ETA: oh, and we won't be telling them about the savings. I want them to learn about earning things for themselves, like me and hubby had to do, rather than thinking they can just wait til they're 18 or 21 and then get handed a cheque.

 

[lilmonkey86]

I have looked a great deal into RESP's and I don't find the benefit to be that amazing, basically the government will match your contribution into the RESP up to a maximum of $7,200 but if the child does not go to post secondary education they lose the governments portion (EAP), and they get taxed on any interest earned, you as the contributor can take the money out tax free but you pay tax on the interest earned, and if they do go to post secondary they get taxed on the EAP portion and the interest portion. I am personally planning to start a trust fund, it will be in DH and my name with him as the beneficiary of it if something happened to us. When he reaches that point if he chooses to go to school he can use the money for that if he chooses not to go to school he can use it as a down payment for his first house etc. but at the same time it is still in DH and my name so we will still have some control to prevent irresponsibility.