Comment mieux soutenir financièrement ses enfantsMarch 30, 2017

How to provide better financial support to children

Children are a true treasure. We like to make them feel that they can always count on us, either in the form of lending money or lending a hand. Sometimes, we wish that we could support them better as they move through life, but this can jeopardize the plans we have for our future, including retirement savings goals. How can we help our kids without sacrificing our own financial stability? Here are a few tools that can help you support your children as they are trying to cope with the early stages of their adult lives.

Can you really lower your taxes through your kids’ tuition?

If your child is currently enrolled in a post-secondary educational institution, you may be eligible for a tuition tax credit. This non-refundable tax credit allows you to reduce the amount of tax you must pay. Although it cannot be a part of your tax refund, it can reduce your tax payable to zero.

This option is attractive because the tax credit can be transferred from one person to another within the same household. It is thus strongly recommended that your child transfer the credit to you or someone with a sufficient income to be able to benefit from it.

Generosity that can sometimes work against us

It isn’t easy to say no to our children, especially when they are entering adulthood. Excessive indulgence, however, not only hurts them by not allowing them to prepare to face life, but also hurts you by draining your budget.

For example, feeding an adult at home can cost up to $75 per week. Keep in mind that while this money influences your budget on a day to day basis, it also affects your retirement savings and your progress on your own potential projects.

This is not about being stingy – it’s about helping your children learn to fly on their own.

A widespread phenomenon

It’s not unusual to see children ask for parents’ help even when have become adults themselves. In recent years, however, this phenomenon has reached unprecedented proportions. Rising debt, including student debt, as well as instability in the labour market, force more and more children to rely on their parents for a place to stay or even financial assistance.

The crucial thing, no matter how serious the situation may be, is to establish clear boundaries with the children. Their needs have changed over the years, but you have remained not only the parent, but also the chef and the manager of the house. To put it briefly, even if it’s difficult for you or you fear being too strict with the children, do not go back on your principles.

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