Watch: Parents, it's time to stop leaving free money on the table
The Canada Learning Bond consists of a $500 grant at birth and an additional $100 per year until a child turns 15, but stats show parents aren't taking advantage of the program.
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This week, the Government of Canada mailed out letters to more than 85,000 families who are eligible for the Canada Learning Bond (CLB) – consisting of a $500 grant at birth and an additional $100 per year until a child turns 15, as long as a family continues to qualify.
If I had a table to pound my frustrated fists on right now, because stats show a majority of eligible families aren't taking advantage of this program.
The CLB money is totally free. It provides lower-income families with a head start on saving for post-secondary education through Registered Education Savings Plans (RESPs). The best part is that no personal contributions to an RESP are required to receive CLB, making it easy to start saving when your child is young.
But statistics from Employment and Social Development Canada show 67% of eligible families are yet to take advantage of the CLB program. These are supported by the findings of a recent Ipsos-Knowledge First Financial poll.
In other words, parents are leaving a lot of free money on the table!
I get it. You’ve got so many other priorities, right?
But, when you invest in your child’s education they will earn more, be happier and enjoy a better quality of life. That’s why education is one of the greatest gifts you can give your children. And studies have shown that when a parent opens a savings plan for their child’s education, and they steward their child towards that goal, even if the savings plan has very little in it, it increases the likelihood exponentially of that child going to post-secondary school.
Young families are the most likely to qualify for the CLB as they are in the early years of their work life and thus may have lower household incomes. So, when you are young, poor and on parental leave; you should apply for this grant.
The back to school season may be over, but the need for families with young children to save never goes away.
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A tax-free savings account is a flexible performer in that it lets you withdraw money at any time for any purpose without losing the contribution room.
If you want to save, you need to change how you think about spending.