R.E.S.P….ETC

That title would have worked better if respect was spelt differently but it makes me chuckle when I think of it. Silly how the small things are amusing me more and more these days. I wonder if that is the craziness that comes with becoming a parent and talking to a 5 week old baby all day. Not to mention the fascinating conversations that I have with the cats. Did you know that the squirrel in the tree next door has two female friends? That is according to Wilson – ok I am totally off my rocker which makes the next part of the post probably hard to take seriously.

When you become a parent everyone has advice for you, regardless if you ask for it or not. The trick is to learn to take all advice respectfully and then promptly throw out the crap when the advice giver is gone. You quickly learn which friends to listen to and which people to ignore. I hope that one day when my friends start to have babies I hope I am the friend that they listen to, and I also hope that I am not the person who thinks they are suddenly an expert on children and dishes out the advice by the truck load.

I will state now that I am not an expert on anything I’m going to post, however I have done a lot of research and continue to do so. Everyone’s situation is different. These are 4 things that I think that should be thought about and discussed before a baby arrives. Brian and I started thinking and discussing much of this months before Adam arrived and we are still working on much of it but if you asked me a year ago if I would be thinking about things like this. I probably would have said no.

  1. Life Insurance for Mom and Dad
  2. Life Insurance for baby
  3. R.E.S.P.
  4. Will

1. Life Insurance for Mom and Dad
This is something that I think should be done soon as possible, regardless if you are single, married or having a baby. The younger you take out life insurance the lower your premium is and the easier it is to get. I had a life insurance policy before we got married, so shortly after the wedding we got Brian an insurance policy. Then when we bought the house we took out another policy to cover the mortgage in the off-chance something tragic happened to either one of us. This seems so morbid but we both agreed that we would like to make sure that the other half will have at least some financial relief and will have the opportunity to take time to mourn without worrying about mortgage payments.

2. Life insurance for Baby
You don’t want to think about something tragic happening to your baby, however I don’t recommend this for if the child dies. I recommend it incase down the road you encounter any medical conditions. I strongly believe in this because my parents made the choice to purchase insurance for me as a child and it really benefited me 21 years down the road. They couldn’t see the future, they didn’t know what would happen but this choice was a fantastic one and I can’t thank them enough for this. Back in 2004 I had an episode of bilateral pulmonary embolism (blood clots in both my lungs) related to a protein that was found in my blood. I had just turned 21 years old and life insurance was the last thing on my mind. However it soon came to my attention that this prognosis would make it very difficult if not impossible for me to get life insurance. Lucky I had the option of taking the child life insurance policy and converting it to an adult insurance policy at 5 time the amount of the original policy with no medical questions and with a low monthly premium. Alright after that last sentence I sounded like an insurance commercial but trust me on this one, do your child a favour and buy a policy for them. Or they might be in the same boat I am that I am insurable but instead of paying the premiums for a 27-year-old non smoker I pay the equivalent of a 34-year-old smoker. I’ve never smoked a day in my life. On the positive side at least I can get insurance, it just costs me an arm and a leg.

3. R.E.S.P.
Yes it’s the beginning of that song but I am talking about a Registered Education Savings Plan. If you start as soon as the baby is born you have 18-20 years to save up. So lets say you put away $50 dollars a month, over a year that is $600 dollars. It doesn’t sound like much but in 20 years that is $12,000. I realize that will not go far, because tuition alone for college for 3 years is $9,639.07 and that doesn’t include program specific fees and all the extras. I haven’t even looked at university costs because those numbers will really scare me. Those numbers are also if baby went to school next semester, so I am sure the amounts will be outrageous in 20 years. Regardless every little bit helps and the nice thing is you can obtain grants up to $7,200 from the government. Then as the government throws their money into your savings depending on how you invest it can earn even more money. The one downfall is if the child doesn’t go to school the government will claw back the grants, however any money you make by investing those grants is yours too keep. You can always invest more as time goes on, or stop investing all together but my personal theory is if you can live without $50 now, I’m sure in a year or two you won’t miss it.

4. Wills
This is the most morbid subject of all however death brings out the worst in people. What it all comes down to is that if you die without a will in Ontario you must go to court to prove that you are the trustee of the estate and then they can decide to appoint you as the trustee, they can appoint someone else or they appoint the Office of the Guardian and Trustee to deal with the estate. You potentially have the government making the decisions for you and your child. If something tragic did happen would you want your loved ones to be tied up in court fighting for the right to execute your final wishes or do you take the time now to put it in writing and make things easier for those you leave behind? Who would you want to care for baby? Would you want the trustee to pocket all the money that you worked hard for, as I mentioned death brings out the worst in people and to make sure baby is taken care of I highly recommend writing a will. A will should be done by a lawyer however a DYI kit is no less legal and it’s cheaper. If you can’t afford a lawyer, get a DYI kit for $20 and just put something in writing, follow all the suggestions and you can rest assured that things will be taken care of. As for our will, we’re working on it, we’re close to being done it and it is a priority on our to-do list.

So there you have it, 4 things to think of, look into and follow through on. Very morbid in my eyes however a necessary evil once you become a parent. It comes down to money and time, however once you have a child you realize that you would do anything for them to care and ensure that you provide them with the best you can.

One last small tidbit – once you have all this in place, make sure you have a safe place to put it like a firebox, safe or safe deposit box. Nothing worse than doing all this work and then losing all the information due to an unfortunate event. Also make sure those you are trusting to take care of things once you are gone know where these documents are.

Don’t know where to start on this stuff? I will be happy to give you the name and number to my financial advisor.

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