Setting up your kids for success: How to build a strong financial foundation from day one

As a parent, each year brings with it countless milestones for your kids. Whether it’s birthdays, back to school, having their first sleepover or starting their first job, there always seem to be reminders of how fast time moves – and how important it is to prepare for the future.

We believe one of the most impactful ways to support your child’s success is by putting smart financial strategies in place early. It’s not just about covering tuition or future expenses. It’s about giving your child the freedom to make confident choices as they grow.

Here are four powerful ways to help your child build a strong financial future.

RESPs: A smart first step for future education

The Registered Education Savings Plan (RESP) is one of the most effective ways to save for a child’s post-secondary education in Canada. It’s a flexible, tax-efficient tool – and starting early can make all the difference.

Why RESPs work so well:

• Government matching: Through the Canada Education Savings Grant (CESG), the federal government matches 20% of your contributions, up to $500 annually (to a maximum of $7,200 per child). Some provinces may also provide an additional grant.
• Tax-sheltered growth: Investments inside an RESP grow tax-deferred. When your child eventually withdraws funds for school, the taxable portion is typically taxed at their lower student income rate.
• Flexibility beyond university: RESPs can be used for college, trade programs, apprenticeships, and even some international institutions. If your child decides not to pursue post-secondary education, there are still options – including transferring the growth to your RRSP (if you have contribution room available) or naming a new beneficiary.
   

Key takeaway: The earlier you start, the more time your investments – and government grants – have to grow. Even small monthly contributions can create significant momentum over time.

Investment accounts for kids: Building wealth through compound growth

While RESPs are purpose-built for education, you can also establish general-purpose savings and investment accounts to support other goals – from a first car to a down payment on a future home. These accounts also provide an opportunity to teach your child about money, investing, and long-term thinking.

Types of accounts to consider:

• In-trust (non-registered) accounts: Also referred to as In-Trust For (ITF) accounts, these are held in trust by an adult on behalf of a child. You can invest in stocks, mutual funds, or ETFs, and the funds can be used for anything – not just education. There are tax implications (some income may be attributed back to the contributor), but they offer significant flexibility.
• Youth savings accounts: Many banks offer no-fee savings accounts with competitive interest rates for children. These are ideal for younger kids and can be a great way to introduce basic money management.
• Learning through ownership: Even small investments can spark curiosity. If your child owns a few shares in a company they recognize, like Disney or Apple, they’re more likely to take an interest in financial literacy.
   

Why it matters: Starting early gives compound interest time to work its magic. A $50 monthly investment starting at age 5 could grow into tens of thousands of dollars by the time your child finishes university – especially if you invest with a long-term mindset.

Insurance for children: Protection today, flexibility tomorrow

Insurance isn’t always top of mind when you think about kids. But certain types of insurance policies, when structured properly, can offer lasting financial benefits, not just protection.

Whole life insurance: Permanent coverage with cash value

Whole life insurance is a form of permanent insurance that builds cash value over time. It’s not about replacing income; it’s about creating a long-term asset your child can use in the future.

How it works:

• The policy grows in value each year, tax-sheltered.
• That cash value can be accessed later – to fund post-secondary costs, launch a business, or put toward a first home.
• Premiums are fixed and can be paid over a limited term, which means you could pay the policy in-full by the time your child reaches adulthood.
   

Because the policy is based on your child’s health when they’re young and typically very insurable, you’re locking in low-cost coverage – for life.

Critical illness insurance for children

While rare, serious illnesses can and do affect children. A child critical illness (CI) policy provides a lump sum payment if your child is diagnosed with a covered condition. This money can help cover treatment, travel, or allow a parent to take time off work.

The benefit of a return-of-premium rider:
If your child doesn’t end up needing the coverage – and we hope they don’t – many policies offer a return-of-premium option. Once your child reaches a certain age (usually between 18 and 25) and you want to cancel the policy, you can opt for a full refund of premiums paid, as long as the benefit hasn’t been used. There are limitations on what you do with the return of premium, but the funds can be repurposed for education or savings.

Leverage your own insurance policy for your child’s big goals

If you already hold a permanent insurance policy with growing cash value, that policy may be more powerful than you think. It can be used strategically to support your children when they need it most.

How to use your policy:

• Access cash value through a policy loan or collateral loan: You can borrow against the policy for major expenses – such as education costs, business startup capital, or a home down payment – without triggering capital gains taxes or needing to sell other assets.
• Preserve your investment portfolio: Instead of withdrawing from registered investments (and creating a tax event), using your policy gives you flexibility while keeping your long-term investment strategy intact.
   

This approach can be particularly helpful during high-cost life stages, like when your child is heading off to university or getting started in their career.

A layered approach for long-term confidence

There’s no single solution for building your child’s financial future – and that’s a good thing. The most effective strategies layer different accounts, products and tools together.

It’s not about doing everything at once. It’s about making intentional choices as early as you can, and letting time, structure, and smart planning do the rest.

We help families design plans that grow alongside their children. Whether your child is just starting school or heading off to campus this fall, we can help you create a roadmap that supports them at every stage.

Want to talk strategy? Let’s connect. We’ll walk you through the options and help you take the next step with clarity and confidence.