Financial Tips For New Parents And Financial Security

Answer

Navigating the financial landscape as new parents can feel overwhelming, but with a few key strategies, you can build a strong foundation for your family’s future. Prioritizing a budget, establishing an emergency fund, and reviewing your insurance policies are crucial first steps. For personalized guidance and comprehensive financial planning tailored to new parents, consider reaching out to KWB for expert advice.

KWB’s Financial Planning Tips for New Parents

Here are our top 4 financial tips for the new parent:

Secure Your Child’s Social Insurance Number (SIN)

• It’s a good idea for you to apply for a Social Insurance Number for your child as soon as they are born. This way, you will not be left scrambling to obtain one when your child gets their first job.
• You need a SIN to work in Canada and receive benefits and services from government programs.
• Without a SIN, your child will not be able to file their income tax return.  Even if your child isn’t earning any income, they may be eligible for the goods and services (GST) credit.  To receive the credit, your child must file an income tax return.
• Further, if you would like to use a Registered Education Savings Plan to save for your child’s education, your child will need a SIN.
• Finally, it’s free, so there’s no reason not to apply.

To apply for a Social Insurance Number for your child, you will need to provide an original of your child’s birth certificate.  You must provide original documents; photocopies are not accepted.  You will also need to provide your SIN when applying for your child.

you do need to file your income tax return annually to continue receiving your benefit and credit payments

Secure Your Child’s Social Insurance Number (SIN)

• You can use the Automated Benefits Application on your child’s birth registration form to apply for the Canada Child Benefit (CCB) and other related provincial or territorial programs.  Your child will also be registered for the GST credit using the ABA.
• The Automated Benefits Application (ABA) is a joint partnership between the Canada Revenue Agency (CRA) and your province’s Vital Statistics Agency (VSA).  Your VSA will send the birth registration information to the CRA after your child’s birth has been registered.  All you have to do is provide your consent by signing in the appropriate section of the birth registration form.  The CRA will then determine what benefits you are eligible for.
• If you didn’t apply to receive child benefits immediately after the birth of your child, you can apply for child benefits for previous years and receive previous year(s) payments.
• You don’t have to apply for the benefits and credits every year but you do need to file your income tax return annually to continue receiving your benefit and credit payments, even if you have no income in the year.

Access Child and Family Benefits in Canada

Apply for Canadian Child and Family Benefits

The child care expense deduction allows you to deduct child care expenses from your income when those expenses were incurred to earn employment or business income or pursue an education.

Child care expenses include but are not limited to payments made to:

• Caregivers providing child care services;
• Day nursery schools and daycare centres; and
• Educational institutions, for the part of the fees that relate to child care services.

Other expenses, including advertising expenses to locate a child care provider and mandatory registration fees may also qualify as child care expenses.

You cannot claim medical or hospital care costs or the costs of clothing and transportation.

The current (2016) dollar limits associated with the child care expenses deduction are as follows:

• $8,000 per child under age 7;
• $5,000 for each child aged 7 through 16 (and for infirm dependents over age 16); and
• $11,000 for each child who is eligible for the Disability Tax Credit

 

You need a SIN to work in Canada and receive benefits and services from government programs

Understand Child Care Expense Deductions

An RESP is an education savings account that is registered with the Government of Canada and that helps you save for your child’s post-secondary education. Click here and here to learn more about RESPs.

If you would like more information on the top 4 financial tips for the new parent or have any questions, please call us at 780.466.6204, or click here to send us an email.

Thanks to Shannon Warawa of KWB Chartered Accountants for providing this content.