Whether you want to fund education or other plans, offering savings is a budget-friendly way to fund the future of those you love.
Here are a few ways to surprise them!
1- Bring higher education within reach
Give an RESP to your children, grandchildren, nephews, or nieces to help them go on to higher education and their dream careers while keeping debt under control. In Canada, one of every two university graduates finishes school in debt to the tune of $17,500 on average, so give an RESP to the future young adults you care about. You’ll help them undertake their careers with one less financial burden to shoulder.
Registered education savings plans also offer several advantages. The investment earns tax-free income as long as the amounts invested remain in the plan. RESPs are also eligible for substantial government grants that will grow the fund significantly over time.
2- Teaching good saving habits
The sooner you develop good saving habits, the easier it is to put money away for an emergency fund or retirement. That’s why it’s important to talk about saving with your children, grandchildren, and even your nieces and nephews from an early age.
To do this right, you can, for example, open an account in the child’s name and provide the first deposit to start them on the road to savings. You can then provide a weekly or monthly allowance, some of which the child deposits in this account to save up for something that matters to them.
For a teenager who gets their first job, you can commit to adding money to the savings account each month, matching the amount of every paycheck they deposit.
What matters here is to demonstrate the advantages of saving and to develop good habits that are easy to keep.
3- Help a loved one with life plans thanks to a TFSA
Let’s get this out of the way: TFSAs are only for people 18 and older. You can only give this savings product to those you love who have reached the age of majority.
The TFSA, whether individual or group (provided by an employer or association), has many advantages. Among other things, it grows your savings tax free and allows you to make non-taxable withdrawals anytime.
Giving a TFSA to a loved one is a great way to meaningfully contribute to an important life project for somebody you love. Whether it’s a trip, a wedding, buying property or the birth of a child, saving with a TFSA is a great way to achieve a goal.
Keep in mind that the TFSA’s beneficiary doesn’t have to use the money as you would like.
Other financial gift ideas
You can offer other financial products besides savings as gifts to those you hold dear. Consider these examples.
- Purchase critical illness insurance
This protects the child when young and healthy and helps parents if they must take time off work to care for their sick child. This insurance can be assigned to the child once they reach adulthood to protect them for the rest of their life and can provide cash if the need arises.
- Purchase life insurance
In addition to having fully paid life insurance, your child will benefit from guaranteed insurability should their state of health prevent them from purchasing life insurance. It’s also possible to access a source of funds due to the cash surrender value, depending on the product.
- Give to a charitable organization
Did you know you can bequeath gifts in honour of somebody you love? If somebody close to you participates in an organization or cause close to their hearts, this could be the perfect gift to both show your support and contribute to an organization that makes a difference in their community.
Do you want to give savings or a financial product to somebody you care about, but don’t know where to start? Contact a financial advisor to learn more and make the right choice.