Category: Finance

Investing in education for your child is very important, and to ensure that families all across the country take it seriously, Canada encourages its citizens to take advantage of a Heritage Education Funds Plan. There are a few things that you will want to know about saving for your child’s future so that you get the most out of this savings and understand how to correctly open the account.

1. Be Prepared
One problem that many parents have when they go to open a Registered Education Savings Plan (RESP) for their child is that they are not prepared with the right documents. This will prevent you from being able to open an account, which is why you want to make sure that you know what you will need and have everything with you. You will need to bring not only your child’s social insurance card, but yours as well. Additionally, you need your child’s permanent resident card or birth certificate. It’s only when you are prepared with this information that you can open an account.

2. Plan Ahead
Before going and opening a RESP for your child, you will want to have done some planning as to how you want to invest the savings. While you can make this decision at the time of opening the account, it’s a good idea to spend some time considering your different options before you meet with the financial advisor. There are a few options for how you are going to invest the savings, including mutual funds, a low-risk GIC, or a no-risk savings account. What you choose will be determined in part by how adverse you are to risk and what kind of savings you have already started for your child.

3. Learn About the Canada Learning Bond
You will want to spend some time to find out whether or not your child is eligible for the Canada Learning Bond (CLB). There are a few qualifications that your child will have to meet, including being born in or after 2004, and you must receive the National Child Benefit Supplement as a part of your Canada Child Tax Benefit. If you and your child are eligible, then you will be able to enjoy an extra deposit when you apply for the CLB and open a Heritage RESP, so it is something that is worth checking out and taking advantage of, if possible.

4. You Don’t Have to Open with a Deposit
Some people avoid opening a RESP because they do not have the money to put in an initial deposit. If you are eligible for CLB you can go ahead and open a RESP and apply for the CLB. This is a great way to start planning and preparing for the future education for your child.

5. Get Your Match
By making deposits to your child’s RESP, you will be eligible for a savings match. The amount that the government will match will vary and depend on your income. Make sure that you understand the income requirements for various match cutoffs so that you can plan for the most money to be saved in the RESP.

Most Canadians who require debt relief solutions have been filing for consumer proposals as better options as compared to bankruptcy, in the last few years. The Office of the Superintendent of Bankruptcy has recorded an upsurge in the number of consumer proposal filings as compared to the bankruptcy option. The increase in the number of people filing for the proposal has dramatically increased due to the recent creation of awareness of this option and its benefits. Although it’s not a one size fits all debt situations, here are four reasons why you should also consider this debt relief option instead of bankruptcy.

1) Assets

Assets are the most dominant rationalization behind considering for filing for consumer proposal as an alternative to bankruptcy. It’s an easier way of debt reduction without losing your valuable assets such as a home. In other words, you get to keep all your assets but still reduce your debts.

2) Protection from creditors

Once you file for consumer protection from your creditors under the supervision of a consumer proposal trustee, you’ll protect your assets from being seized and all garnishments will stop. On the other hand, bankruptcy will lead to the seizure of certain assets depending on your allowable exceptions. However, it’s vital to note that every province has specific exceptions when it comes to these assets.

3) Easier management of payments

The standards of payment are not predetermined before the filing of the proposal and thus it’s designed to meet a wide range of debt situations. It’s up to you to decide on the proposal percentage that you make of the unsecured debts with your creditors. The percentage will be a general reflection of your payment capabilities and your income timing. People who have a reliable source of income can always qualify to make consumer proposals. Moreover, the payment is so manageable because you don’t have pay added interests within the months of between 48 and 60.

4) Credit recovery

Most people are often concerned about their credit rating when filing for credit reduction options. The important thing to keep in mind is that your credit rating has already been demolished by the missed payments. A proposal is treated as an R7 and bankruptcy as an R9 by the reporting agencies. Once you get the completion certification, the consumer proposal will remain in the credit bureau for three years while the bankruptcy will stay for six years after receiving a certificate of discharge from the bankruptcy trustee. In other words, repairing your credit and rehabilitating your financial status and remain vigilant in paying your debts is a continuous process that will require effort, discipline, and time.