Blog

Diary Of A Millennial Parent: Beating Tax-Planning Overwhelm

The tax deadline isn’t until April 31st, and yet tax season is clearly upon us. We know this because we are bombarded with advertisements from the bank, telling us the RRSP deadline is quickly approaching and we better act fast before we miss out.

Should I even invest in an RRSP?

I’m a millennial, and I want to make smart financial decisions. I graduated from university with $25,000 in student loan debt. It took two years working two –sometimes three – jobs at once, but I paid off every cent and promised I would never put myself in a position like that again.

How do I live a debt-free life?

I understand the importance of saving and investing my money.I know I’m supposed to pay myself first, and I should never spend every dollar I make.

I dream about achieving financial freedom one day. To me, this means being able to rely on my savings and investments to pay for my expenses and to support my family; it means working at what I love because I want to, not at a job because I have to.

Talking about “money” doesn’t make me squirm; it doesn’t make me sweat. This may separate me from other millennials out there, but I definitely relate to the financial struggles our generation faces. If we’re to succeed then we have to confront our fears and ask the questions that need asking no matter the reply.

We’re being told by mega financial institutions to invest in an RRSP before it’s too late or suffer the tax consequences; but where are we supposed to find the dollars to invest with today’s cost of raising a family?

Many of us are familiar with working unpaid internships to “get ahead.” When we graduated, we took on low wage jobs for our first few years after school. We didn’t enjoy living in our parents’ basement in our late twenties (but we’re certainly grateful for the help).

We want to do it on our own, but we could all use a little old-fashioned, honest assistance from someone to help us understand what direction we should take and what the right choices are for us and our families.

I still have a lot to learn about money.

I’m not going to lie; I get a little anxious when tax season rolls around. I feel overwhelmed by the tax forms and the alphabet soup of government programs I’m supposed to invest in: RESP, TFSA, RRSP, RRIF, LIRA, LRRSP, HBP, ORPP, CPP, OAS, Child Tax Benefit, Physical FitnessTax Credits, and on it goes….

How are we supposed to know which option is the right choice? What do these letters even mean? Is an RESP right for my children’s future? Is a TFSA truly the “best thing since sliced bread” for our generation? How do I make sure the government doesn’t take half of my family money?

Tax planning is a confusing topic for millennials.

I know this firsthand. We need someone we can trust; someone who will guide us through our options and be honest about what is the best choice for our personal needs, our family and our children and their future.

After all, finance is personal. But that shouldn’t stop us from talking about it. We want to learn. We want to be smart about our money.

Every 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 for the answers which will be provided by Michael Lampel, President and Founder of insuranceforchildren.ca Canada’s leading provider or financial planning for children and creator of Child Plan.

If you have any financial questions you’d like to have answered in plain English, please don’t be shy – post your questions to our Facebook page and we will do our best to guide you through the maze along with us.

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.

Personalize Your Child Plan™

Request a Child Plan™ Illustration and see how much cash value your child will have for their education and for life.

Request Illustration

*illustrations are reflective of the annual premium amount

Have a question about Child Plan or wish to speak with a Family Advisor?