How Can I Give My Child a Debt-Free Life?

Get out of debt conceptMillennial Parents Guide To Financial Planning For Children

How much different would your life be if you were able to live free of debt?

For millennial and gen-x parents, debt was almost a given when we were growing up. Our parents were unable to predict the rise in tuition costs; therefore student loans soon became the norm. Add in the credit card debt, debt from your first car and, eventually, debt from your first mortgage, and the idea of a “debt-free life” seems completely unattainable for today’s young families.

We are so accustomed to borrowing; it’s a cycle that never ends. The temptations are all around us. It’s never been easier to wake up and make purchases you can’t actually afford without even having to get out of bed. Debit cards, credit cards, phone apps that help you buy endless amounts of $4 coffees, now cell phones are also getting into credit as well as your Apple Pay, Samsung Pay. How in the world are we supposed to save if everyone is building apps to take our money?

But guess what? I don’t want to live this way. And I don’t want my children to live this way either.

I don’t want my kids to face a future in which they feel trapped by their debt, like they can never get ahead. I’ve watched so many people in my parents’ generation become overworked and stressed out, while still fighting to break free of their debt. I’ve watched my friends and co-workers succumb to their debt and learn to accept the fact life just simply cannot exist without it. I refuse to think this way.

Is a debt-free life possible for my children?

I understand it’s impossible to predict what our futures – or those of our children – will bring, but I also believe a little planning can go a long way. As costs of tuition continue to rise, and young people continue to seek out alternative education routes and career paths, investing in my child’s future becomes vitally important and the sooner the better.

How can I ensure I am making the right investments today to safeguard their tomorrow?

I’ve often heard of the importance of opening an RESP is. But what is an RESP? When I go to the bank and ask a young financial planner what is an RESP and how does it work, they go into robotic reply. It’s a savings plan for your child’s future education. When I ask what are the benefits they tell me the Government will match 20% of what you put in until they start University. But when I ask if there are rules, they say no. When I ask if they can use it for other things, they say I don’t know. When I ask what happens if my child has scholarships or chooses a different path, then what. They say flippantly why wouldn’t your child go to University? To which I say, maybe the projected costs of $137,000 by your bank would scare the hell out of them.

My main concern before I invest our hard earned money into a Government program for the next 18 years is where is the flexibility? What if my child wants to choose a different path like a school or program that falls outside of the RESP approved list? What happens to my 18 years of savings? After all the RESP isn’t a savings account as they tell me at the bank or these group RESP companies. They’re Government programs with Government rules on where my child goes to school, what they can study and how the money we struggled to save can be used.

When I was growing up, my parents expected me to attend university one day. But this is no longer the case. There is of course the anticipated costs of more than $100,000 by the time they start. There are a lot jobs today that don’t require a University education. There are so many diverse and equally incredible vocational career programs out there now and will be created over the next 18 years which the Government would have to approve before my child can use the funds.

Who am I to decide which route my child will pursue?

And what about the other major costs ahead?

Education is just one of many financial milestones looming for my children. What about the other big expenses: their first car, their first home, or maybe even their first time launching a business?

Being a young entrepreneur myself, I would love to be able to afford my children this possibility, without the burden of taking on added debt.

I need a financial plan for my child’s future and an investment that can be flexible to suit the needs of my family and my child’s future. After all, I am a millennial. I refuse to follow the rigid paths and Government rules set out before me to limit my. I’m here to break the status quo; to live differently; and I believe in the possibility of building a debt free life for my children.

If you have financial questions you’d like answered in an honest and clear language we can all understand? Don’t be shy. Post your thoughts or questions to our Facebook page and we will do our best to guide you through the maze along with us.

This post is part of the Diary of a Millennial Parent series. Every other week, I’ll write about my experiences as a millennial parent trying to make sense of this financial maze and what’s the best way through. Be sure to check back to the answers to my questions, which will be offered in a follow up post by Michael Lampel, President and Founder of, Canada’s leading provider of financial planning for children and creator of Child Plan.

Sample illustration of Child Plan™ Cash and Insurance Values

Based on a Monthly Deposit of $250 per month

Age Accumulated Cash Value Life Insurance Value
20 $82,568 (Education) $612,728
35 $177,953 (House) $1,115,297
45 $303,299 (Security) $1,115,297
65 $834,276 (Retirement) $1,666,824

Sample illustration is based on a monthly contribution of $8.32 a day/$250 a month for twenty years, starting when the child is less than 1 years old. Cash and life insurance values are based on the current dividend interest rate of 6% from a Canadian life insurance company. This example is strictly for illustrative purposes only, the annual dividend scale is not guaranteed and values may differ.

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*illustrations are reflective of the annual premium amount

To learn more how Child Plan will provide your child with the funds for their future education and financial security for life, book a virtual meeting with a Child Plan Advisor.

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