Financial Wellness Matters for Your Child 

Every parent dreams of seeing their child thrive, and financial wellness is often a big part of that vision. You can play a vital role in helping your child achieve this by teaching them about money and making thoughtful investments in their future. From saving for education to securing life insurance, there are many ways you can set your child on the path to financial wellness. This guide will provide practical strategies, including the benefits of a Registered Education Savings Plan (RESP) in Canada, to help you lay a strong financial foundation for your child.

Teaching Your Child About Money

Understanding money is crucial, and starting early can prevent many pitfalls. You want your child to learn the value of money and how to manage it wisely, without having to learn the hard way. Let’s make money matters simple again so that our kids can grow up confident, wise and financially well!

It is important to model a healthy relationship with money to your children so that they can grow up with a clear image of financial wellness. If they can follow in your footsteps, you’ll be fast-tracking them on the journey to generational wealth! We have plenty articles published on budgeting, evergreen financial principles and investing for you to learn from.

Here are some practical yet simple ways to teach your child about money and start building a financially secure future:

Start with an Allowance

Begin with a modest allowance, linked to household chores. This helps your child understand that money is earned through effort.

Encourage Budgeting

Teach them to manage their finances by showing how your household budget works. Encourage them to save for something special, helping them appreciate their purchases and make thoughtful spending choices.

Open a Savings Account

Once they have some money, help them open a savings account. Show them how to set aside a portion of their money and let them see how interest can grow their savings. This is also a great time to introduce them to investing and the magic of compounding interest.

Teach Credit Basics

Explain credit scores, credit cards, mortgages, and lines of credit. Discuss the importance of managing debt responsibly and making timely repayments.

Investing in Their Future

Teaching your child about budgets and savings might not be enough, so start preparing for their financial future as soon as possible. You have a few options available to you when it comes to sowing into their adult life and ensuring they’re financially secure when they leave your home and start their independent life. We believe that these two strategies go hand-in-hand – teaching our children about money, AND preparing the way for them.

There are several ways you can invest in your child’s future, ensuring they have a strong financial foundation. Here are a few strategies you might find beneficial:

Save for Education with an RESP

A Registered Education Savings Plan (RESP) lets you save tax-free, with the added benefit of government contributions. Saving for your child’s education should be a top priority. With Wealthstack’s personalized dashboard, you can easily track the growth of your child’s RESP alongside your other financial goals as a family so we’d encourage you to set up your Dashboard and keep everything in one place.

Start a Retirement Fund Early

It may seem unusual to think about retirement savings for a child, but starting early allows their money to grow through compounding interest. Plus, an RRSP can be a great way for them to save for a first home or further education.

Consider Life Insurance

Securing life insurance for your child while they are young and healthy is easier and often more affordable. With a permanent life insurance policy, they can benefit from cash value growth over time, which can be used for future needs like buying a home.

Add Critical Illness Insurance

This can provide financial support if your child is diagnosed with a serious illness, allowing you to take time off work. Adding a return-of-premium benefit means you could receive a refund if your child doesn’t suffer a critical illness within a set period.

Gift Money on Special Occasions

Instead of traditional gifts, consider giving money or investments for birthdays, graduations, and other milestones. Encourage family members to contribute to an RESP, RRSP, TFSA, or even gift stocks or mutual funds, teaching your child about investing and the market.

Financial Wellness is a Family Affair

Setting your child up for financial success involves a combination of education, smart saving, and strategic investments. By taking these proactive steps, you can ensure your child is well-prepared for a successful and financially secure future.

Wealthstack is here to support you on this journey, providing the tools and expertise you need to make informed decisions. Plus, you can get a “bird’s eye view” of your family’s financial wellness with your Dashboard, making sure you’re on the right track and what changes you can make to get there with peace and clarity. Reach out to a Wealthstack Expert and let’s work together to give your child a bright and secure financial future.

Ready to get started? Sign up for Wealthstack’s Service Package and take the first step towards securing your child’s financial future.