While a domestic road trip might appear like an affordable
alternative to traveling abroad, costs can easily spiral out of control. Here’s
how to keep a lid on summer road-trip spending.
Leaving aside the politics of whether you agree with the
expansion of the universal child care benefit, it’s difficult to believe many
Canadians will be sending the money back to Ottawa, even if they don’t support
the current Tory regime.
As for the payouts, the benefit was increased to $160 per
month for each child under the age of 6. It was also expanded to children
6-17, and parents who have kids that age will receive a benefit of $60
per month for each child. It’s retroactive to Jan. 1, and as a parent of
two children in that 6-17 group I will soon be attacking that mailbox with
vigour looking for $840.
Parents receiving the UCCB or the Canada child tax benefit
automatically get the enhanced amount, says Canada Revenue Agency. Even if you
are not currently receiving either benefit, but have previously applied for a
child who is under the age of 18 and still in you care, the cheque will
arrive automatically. If you’ve never applied for either program, you
need to go through the CRA’s website and set up an account.
So what’s going to happen next week when all these cheques
start appearing? Bank of Montreal chief economist Douglas Porter predicts a lot
of spending.
“People might pay down the odd credit card debt, which isn’t
a bad thing, but I think most of it will get spent. It might not happen in the
first month, but I suspect non-auto retail sales are going to be pretty strong
in July and August,” Porter says.
The natural place to consider investing the child tax credit
is into an RESP
Even the Bank of Canada expects the money will burn a
hole in the wallets of parents: “Consumption is expected to accelerate as
household disposable income receives a boost from retroactive federal payments
to families with children,” the central bank said, in its policy report issued
this past week.
Talk to financial planners about what to do with the money
and you get an almost universal response: a contribution to a registered
education savings plan. It’s easy to justify because the government offers 20
per cent matching funds on contributions — a $2,500 deposit per child gets
you the maximum $500 annual grant.
“The natural place to consider investing the child tax
credit is into an RESP,” says Toronto certified financial planner Ted
Rechtshaffen, adding that you always want to capitalize on free government
money.
