August 24, 2007, 7:00 am

Frugal With Babies Part I: People around You

by: The Financial Blogger    Category: Frugal
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Having children is a blessing for many reasons. Unfortunately, it has also a big impact on your finance. Being a father twice now, I have to overcome two issues: the raise of expenses and the drop in my wife’s income. Being more frugal seems to be one of the best solutions to compensate for these two financial issues. Then, I decided to create this series in order to share with you my tricks and my thoughts about this topic; Frugal with babies. The very first thing I noticed when we find out that we were going to be a parent for the second time was: there are people around you that care. You should accept their help and while building stronger relationships, you will have the opportunity to save a lot of money.

There is nothing better than grandparents for babysitting

They know what there doing as they already went by it all, they are reliable and always looking forward to see your children and… they do not cost anything! My parents and my in-laws just love to take care of my kids. While they are having fun with them, it gives my wife and I a great opportunity to relax and rediscover the couple we used to be. We are never worried about what could happen or if we are late or not. This is just the perfect situation!

Co-workers can help too!

How many of your colleagues have older children? You probably know some of them. While I was never going to ask anybody at work for clothes or toys, one of my newest co-workers gladly brought a huge bag full of clothes for Amy. I was totally speechless. I could not believe that this guy that your came two months ago gave me for I don’t know how much in baby clothes. On top of that, for my first one, everybody at work pooled together and offered a gift certificate. We then bought several useful things such as a baby’s chair for William. Co-workers are definitely a great help when you have a baby!

Brothers, sisters, godmothers and godfathers

Your close family might not have a clue about what would be the best to offer to a newborn baby. How about a contribution to an RESP? This money will grow over not less than 20 years and will definitely be a great push to your children’s future. It will also help you out bearing the burden of a newborn’s expenses without having to worry to much about their education.

Do not get me wrong, these frugal tips are not given to abuse your relatives. Every time that someone around me gives us direct on indirect financial help for our children, I take good note and surely give it back by another means. The chain goes like this: the more you give, the more you receive. Being frugal sometimes mean being more generous in other ways than money.

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Interesting article. I agree – the relatives want to help so the best thing is to allow them in a constructive way ie RESP!

Also – maybe it’s because I’m a lot older than you but I have a hard time reading your blog – any chance you could increase the font a bit?


No FP, you’re not just old, you’re blind too 🙂
Actually, the font is a little small.

I like the RESP idea, my fiancé and I have been secretly setting aside for some newborns in our “extended family” that both came around this year.

However, it’s just sitting around right now (no savings etc.) Do you know what’s involved in setting up someone else’s RESP? Do I still get the tax break? What is the parent’s involvement?

Truth is, the parents in question are both pretty bad with money, which is one of the reasons we’re secretly setting aside. So if we give the money to “the kid”, we actually want to be sure that it belongs to “the kid”. What are the provisions for this?

AFAIK, it’s just best to keep the money in a personal account and then figure it out when they hit 18, but I’d definitely like to hear other options.

by: The Financial Blogger | August 24th, 2007 (7:05 pm)

FP, Gates,
I was wondering if it was too small as well! I,ll change that shortly 🙂

Gates, I’ll get more info on the subject for you. From what I know, if you withdraw money and it is not for the kid (you have to provide proof that he achieve a certain school level), you will loose all the Gov contribution. I’ll get the info and write a full post on it. Thx for the idea!

Thanks Gates – I suspected that too 🙂

Re: resp – anyone can set up an resp for anyone else. The annual contribution limit used to be $4000 so if you set up an account you kind of had to coordinate with other contributors in order not to exceed the limit. The new rules are more lenient so you don’t have to worry about contributing too much in any given year.

To set up an resp you need the child’s SIN number, name, address etc.

The tax break with RESPs is that the income and cap gains are tax sheltered in the account – there is no tax rebate like with an rrsp. The grants, capital gains & income are all taxable in the hands of the student at withdrawal. It’s a pretty good deal.

My parents set up an resp for my niece for the very reasons you mentioned. The person who sets up the resp controls the money and the student (beneficiary) receives the money. Their parents have nothing to do with it.


[…] Financial Blogger presents Frugal with babies Part I: People around you. “Having children is a blessing for many reasons. Unfortunately, it has also a big impact on […]