It seems like it happens in the blink of an eye. One minute you’re cradling your newborn, the next you’re dealing with an ornery teenager. Life changes significantly as your children age, and you have to consider more than coping with mood swings. These money tips from your financial advisor at The Beacon Group of Assante Financial Management Ltd. will help you navigate the teenage years and help your kids make the transition to adulthood with solid money habits.
Review Your Education Savings Goal
You’ve been investing in your child’s Registered Education Savings Plan (RESP) for over a decade. Now that your child is nearing graduation from high school, it’s time to reassess your education savings goal. Speak with your financial advisor to discuss whether it makes sense to adjust your asset allocation or re-evaluate your saving philosophy from growth-oriented to conservative.
You also have a clearer picture of your child’s education plans and goals. Are they headed to college or university? Will they be staying in town or living away from home? Is graduate school or medical school on the horizon? Speak with your financial advisor and together you can understand the financial implications.
Entering the Working World
Many people begin to branch out into the working world in their teen years. Some just earn a bit of pocket money babysitting or dog-walking, while others enter the fast food or retail universe with paychecks, taxes, and employment insurance (EI) deductions.
Getting a part-time job has many benefits. Your child becomes more independent, develops new skills, understands the working world, and earns an income. However, it must also be weighed against studies and extra-curricular activities.
Now that your child has an income, as a family you must discuss the financial expectations. Decide as a family whether your teen is expected to pay their cell phone bill, or whether they should contribute some percent of their income to savings or their RESP.
Speak with your financial advisor about options that make financial sense for your teen and the family. For example, your child can file an income tax return to maximize future Registered Retirement Savings Plan (RRSP) contribution room. If your teen files taxes, they may be eligible for a tax refund and qualify for the GST/HST credit.
Teaching Money Smarts
Before your teens vault into adulthood and learn hard lessons about budgeting, credit card use, student debt, and more, it’s time to get them on the path to success before they leave home. Talk to your teen on their level about the balance between saving and spending, and present wants versus future needs. Set a good example and demonstrate that sound financial planning pays off in the end.
Speak with your financial advisor from The Beacon Group of Assante Financial Management Ltd. for more tips about helping your teens develop good money habits.