How a young family built a plan to save for their son’s future during the pandemic
“It's been night and day for us since we talked to our advisor, Aundrea. We've got a start on our savings, and we feel more optimistic about the future.”
Apr. 01, 2022
5-minute read
Most parents will tell you there's no "perfect time" to have a baby. But the pandemic made things even more uncertain. Still, we knew we wanted a family. So even though we were nervous, we decided not to let the pandemic derail our dreams. Our son, Bennet, is almost a year old now. He's happy and healthy.
But it's been a scary time. Both our jobs were impacted by the pandemic. Amanda was working in hospitality, so she was out of work for a long time. I lost a few weeks of income, too. It was a real hit. We dealt with some of the immediate debt by tapping into the CIBC Home Power Plan. But navigating the government support — including Amanda's maternity leave — on our own was challenging.
It was perfect timing when Aundrea from CIBC reached out. Before the pandemic, we'd never really had time to focus on our financial goals for the future. And now, we were caught up in the new pregnancy and navigating living on just one income. We knew we needed to start our savings for retirement, and an emergency fund was suddenly so much more important.
Aundrea started with just asking how we were feeling about everything that was going on. We opened up about our challenges, but also our goals for the future. Our first priority was to start our savings journey. The pandemic showed us just how important it was to have a safety net. Aundrea listened to what was going on in our lives. She provided advice to help us build the right plan for our family. We set up a daily savings account and a tax-free savings account (TFSA) to invest in mutual funds.
We also started thinking about longer-term goals, like saving for Bennet's future. Aundrea helped us set up a registered education savings plan (RESP) to help save for education funding. Now, we're contributing money to the RESP. Our next goal is to start thinking about ways we can save to buy a bigger house for our growing family.
We're definitely not out of the woods yet. Until Amanda goes back to work she's on employment insurance (EI). We've primarily been living on my income, and only have so much to spare at the end of every month. But at least we're saving and not accumulating debt.
It's been night and day for us since we talked to Aundrea. We've gotten a start on our savings, and we feel more set in our lives and optimistic about the future. It's a relief to feel like we have a strong foundation and a sense of where we're going.
Aundrea's 3 tips for saving for a growing family
I know the feeling of being scared about money. I want my clients to feel empowered about their financial choices — because they do have choices, even if it may not feel that way to them.
When I talk to clients I invite them to speak openly and honestly about how they're feeling. The “feels" are big for me. I want people to tell me how they're feeling about everything so we can address the feelings and put plans into place. Here are a few things I told Kyle and Amanda that are applicable to a lot of first-time savers.
Talking to a professional is a great first step. As an advisor, I'm here to help. I'm here to listen and talk, provide guidance and educate. Wherever you are, there's no judgment — I know it's just your starting point.
A lot of people don't understand the differences between a non-registered savings account, a TFSA and a registered retirement savings plan (RRSP). So at the start of any client relationship, I break down the advantages of each. This way, we figure out the best solution for short- and long-term goals together.
For Kyle and Amanda, it made sense to have a CIBC TFSA Tax Advantage Savings Account that earns interest, to provide for short-term needs. A TFSA that invests in mutual funds is a great option for a longer-term emergency fund or a savings plan to provide funds for your retirement.
It can be as simple as transferring $25 every time you get paid. It adds up. You realize you can contribute more, and it's empowering. You may be in a tough spot, but you're taking control of your finances.
2. An emergency fund is critical
The pandemic was a big wake-up call for a lot of people. For those who were already savers, they realized the importance of keeping that up. It was a hard lesson for those who didn't have emergency funds in place.
Kyle and Amanda already had a pre-approved line of credit, which was great. Credit can be a good back-pocket option if you run into a tough spot and need funds quickly. But it should be just that — a backup option, not a primary emergency plan.
There are many ways to build up an emergency fund of savings. The first step is to sit down with your advisor and have an honest conversation. Do you want the funds to buy a house? Or is it truly for an emergency like if you lose your income? Think about how available you need the money to be. Discuss your risk tolerance. Answering these questions can help you and your advisor find the right path forward.
3. It's never too early to start an RESP
As soon as you have your baby's SIN number and birth certificate, it's time to set up an RESP. The government often contributes grants and bonds, and you'd be surprised how quickly it starts to add up. Amanda and Kyle knew this was an important goal, so they got started early.
Find out about the benefits of government grants and how to grow your savings with our RESP calculator.
Aundrea is one of our CIBC advisors. Come meet with us.
What's your ambition?
Let’s map the journey to success together. Connect with an advisor to learn how we can help.
