Financial Checklist for New Parents in Canada

Are you expecting or do you have a newborn already? Looking for a financial checklist for new parents in Canada? Look no further, here’s the ultimate financial checklist for new parents- a step-by-step guide on what to cover financially when your little one arrives. Congratulations by the way- your life has changed forever, instantly.

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Financial Checklist for New Parents in Canada

You have probably decided already whether you want a 12 or 18 month maternal or parental leave, and decided which baby freebies in Canada to apply for, but there are other personal finance items to check off once you have your baby.

When we brought our firstborn home our one bedroom apartment, there was much more paperwork involved than I had anticipated and it was overwhelming between the 2-3 hour feeding, cluster feeding, sleep deprived nights, and the nonstop changing of diapers.

I thought we would just have to pick a name for our baby and register a birth certificate. Instead, there were forms to fill out to try and apply for the Canada Child Benefit, RESPs to think about and contribute to, and emergency funds to beef up.

Here’s the financial checklist for new parents in Canada so you have one less thing to think about (creating a list) in your sleep deprived state.

Apply for the Canada Child Benefit

The Canada Child Benefit (CCB) is a non-taxable (that means it is not included as income, woohoo!) benefit paid to families with children under age 6 and also to children aged 6 to 17.  The CCB is paid on a monthly basis via a cheque or direct deposit.

How much can you receive?

Here’s a chart of the Canada Child Benefit Amount.

Here’s the maximum that Canadian families can receive from the CCB from July 2023 until June 2024 based on the 2022 tax returns :

• $7,437 per year or $619.75/month for each child under the age of 6
• $6,275 per year or $522.92/ month for each child aged 6 to 17
• You can receive an additional $3,173 per year if your child qualifies for the Child Disability Benefit.

The Canada Child Benefit is dependent on your previous year’s income.

To apply for the CCB, all you have to do is to go to CRA’s (Canada Revenue Agency) My Account and click on apply for CCB or you can complete this form.  The primary caretaker of the child is eligible to apply.

By default, the Canadian government usually considers the primary caretaker to be the mother (I guess that’s the bonus the Motherhood Penalty gets you, acknowledgement). 

I applied for this with the ‘newborn package’ of things to sign up for after our baby was born (it was an automatic sign up as I provided the government with my SIN from our newborn package given to us at the hospital).

You have to have completed the previous year’s taxes to be eligible to receive the CCB (since it is dependent on your previous year’s income). Here’s free tax filing software in Canada if you haven’t done your taxes yet.

Here’s a guide on how to maximize your Canada Child Benefit.

Once you’ve applied, make sure to note when the Canada Child Tax Benefit payment dates are- you can set up direct deposit or have it paid out by cheque.

If the Canada Child Benefit you are entitled to is a small amount (e.g. under $100, I can’t remember the exact amount), you will get it paid out in a lump sum amount via cheque.

Set up an RESP

An RESP stands for Registered Education Savings Plan.

The RESP is a Canadian government initiative to encourage families to save for their children’s post-secondary education.

The money that you put into your RESP plan grows tax free. 

The maximum lifetime contribution to your child’s RESP is $50,000.

On top of that, the government matches your RESP contribution with a 20% match from the Canada Education Savings Grant (CESG). 

So for example, if you contributed $2500 into your child’s RESP, you would get $500 from the government.

You can get up to $7200 in total from the Canadian government from the RESP grant. That’s a lot of money!

Here’s the ultimate guide on the RESP in Canada.

Also, if you live in BC, don’t forget to take a mental note to apply for the BC Training and Education Savings Grant 6 years down the parenting road. This is another grant for when your child turns 6 years old and it is worth $1200.

Investing within your RESP might feel overwhelming especially if you are not comfortable with investing.

A good option for an RESP if you feel lost, is Justwealth’s Target Date RESP.

All you have to do is contribute money and just figure out when your child will be going to post secondary education. The rebalancing will be taken care of without you having to worry about it by Justwealth as the robo advisor.

Basically the portfolio will be more aggressive when you start out with the RESP and will preserve the capital when it comes closer to taking the money out for post secondary, hence the ‘target date fund’.

Here’s a comparison between Justwealth and Wealthsimple RESP, both robo-advisors in Canada.

Get Life Insurance if You Need It

If you haven’t gotten life insurance yet, this is a crucial time to get it. You have a new dependent. Your new baby is completely dependent on you for all of their needs.

If something were to happen to you our your spouse, would you as a single parent be able to handle the financial costs of losing one income (and also not being able to work because you have to take care of your baby)?

If the answer is yes (not being able to shoulder the mortgage, not being able to pay the rent, not being able to pay groceries), you should definitely look into life insurance, and term life insurance is the cheaper and more economical option compared to whole life insurance.

There are a number of life insurance providers available in Canada.

PolicyMe is an online life insurance company that allows Canadians to buy term life insurance in minutes, 100% online, at the most affordable price.

PolicyMe has new Canadian families in mind. They offer discounts when applying as a couple and also includes free child coverage with every policy.

They have a new life insurance calculator (it’s free) to see how much life insurance you would need. They will even tell you if you don’t need life insurance, that’s how honest they are.

PolicyMe asks you a few questions, like, how many dependents you have, what your income is, what your detailed monthly expenses are, and at the end they will tell you how much life insurance you would need.

Click here to try out the PolicyMe life insurance calculator for free.

They also offer critical illness insurance in Canada. As a mom who had a life threatening illness needing hospitalization for a few days (with a 6 month old and 2 year old to take care of), it makes you painfully aware how critical illness can come so unexpectedly.

Add Your Child to Extended Health Benefits Plan

If you have extended health care from work, you have to fill out a form to add your child as a dependent to your extended health benefits plan.

This form is usually called the “Add or Remove a Dependent” form.

Although we are lucky to have medical coverage in Canada, there are a lot of things that are not covered by our universal provincial health plan, such as certain medications (especially brand name medications), acupuncture, massage, counselling, or a physiotherapist (you know for that pelvic floor physiotherapist after your delivery).

Although my baby didn’t use acupuncture for himself, it certainly helped me a lot as a new mom since I got 8 months of post-partum pain from ‘mommy wrist’ (De Quervain’s tenosynovitis).

Orthodontics and braces are going to be costly, but they are usually partially covered by extended health benefits. Thankfully, worrying about orthodontics costs are more than a few years away.

Set Up an Emergency Fund

An emergency fund is helpful for any unexpected expenses whether they are large or small and is an important part of managing your money in Canada.

For example, if your car breaks down because you haven’t been driving it since you have been staying at home for the first three months of your baby’s life, and you need to replace the car battery. This happened to me about 3-4 times during my parental leave.

Thankfully we have the Triangle Mastercard where roadside assistance is included (and free).

Even though that’s not very much in added cost, it’s still something that you didn’t expect. Taking it out of a pot designated for emergency use feels better than dipping into your savings earmarked for other stuff.

Here’s how to calculate how much emergency fund is enough, the key is to be able to calculate your new expanded family’s living expenses.

I personally keep my emergency fund money outside of my TFSA and RRSP (those are reserved for investing), here’s where to put your emergency fund.

Apply for Children’s Savings Accounts

You might think you need to open up a children’s savings account in Canada right away, but you actually don’t need to, since kids savings accounts in Canada are notorious for low interest rates. When your child is older, you could open up one of these accounts to teach them about money and how the banking system works.

Instead of opening up a kids savings account like RBC’s Leo the Lion, you can do a joint high interest savings account (for example, with EQ Bank or the Scotiabank Preferred Package and the Scotiabank Ultimate Package) and add a side account for your little one’s gift money or savings.

That way, you’ll have higher interest rates than the low rates from children’s savings accounts in Canada. This is what we do.

Unfortunately many of these children’s savings accounts do not have big bonuses of iPads or $350 cash like regular Canadian new chequing account promotions, but you can get a small incentive for signing up for a Children’s Savings Account.

Appoint a Guardian and Set up a Will

In the event of death or incapacity of both parents, if parents want a trusted family member to take care of their child who is a minor, they will have to appoint the trusted family member as a guardian.

In British Columbia, this is usually done in a Will.

According to Legal Wills, only 20% of 35-44 year olds and 15.1% of 25-34 year olds have an up to date will in 2021.

Here is a guide on how to make a Will in Canada.

Contrary to popular belief, setting up a Will in Canada doesn’t have to be thousands of dollars through a lawyer.

In short, you can make a will with a DIY Will kit, through a lawyer or notary public, or through an interactive Will service like Legalwills.ca for a very reasonable price (like think under $40 for a standard will).

Related: End of Life Planning in Canada.

Financial Checklist for New Parents Recap

To summarize, there are a few things on your financial to-do list as a new parent:

• Apply for the CCB
• Set up an RESP
• Add your child to your extended health benefits
• Apply for life insurance
• Set up (or beef up) your emergency fund
• Apply for children’s savings accounts (or use a joint high interest savings account)
• Appoint a guardian and set up a will

They don’t have to be all done at once, you just need to focus on being able to get through your day, and even showering can feel like a huge accomplishment at this point in your new lifestyle.

Finally, if you are thinking of working during your parental leave in Canada, check out this post first.

After doing the financial checklist for new parents, you deserve to take a nice getaway, here’s a minimalist list of what to pack for a baby and toddler beach vacation. Flight attendants had told me that it’s easier to travel with a baby (and as I was trying to do squats at the back of the airplane to get my 6 month old to sleep) and I didn’t believe them.

I now believe them. Babies are easier to travel with compared to toddlers!

Before you know it, your baby will turn one years old, and then you can get a free Thrifty’s birthday cake for your new toddler.

Or get a physical share of a stock on their wall (like we have for our kids, haha).

They say the days are long but the years are short.

Congratulations on a new life-changing (tiring but rewarding) chapter in your life.

Did you run through this financial checklist as a new parent?

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