{"id":1137,"date":"2023-08-15T16:30:33","date_gmt":"2023-08-15T16:30:33","guid":{"rendered":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/?p=1137"},"modified":"2025-02-19T20:01:43","modified_gmt":"2025-02-19T20:01:43","slug":"intergenerational-wealth-planning-in-praise-of-the-summer-job","status":"publish","type":"post","link":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/2023\/08\/15\/intergenerational-wealth-planning-in-praise-of-the-summer-job\/","title":{"rendered":"Intergenerational Wealth Planning: In Praise of the Summer Job"},"content":{"rendered":"\t\t
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\n\t\t\t\t\t\t\t\t\tRemember the days of old, when the summer job was a rite of passage? Those of us who preceded the digital era may connect with an article in the popular press that reminisces on this bygone era: \u201cnewspaper delivery was the first rung on many an economic ladder. Traditional summer work taught generations of teens about life, labor and their place in the universe.\u201d\n
If your child or grandchild has a summer job, congratulations! This may be a wonderful way to continue instilling financial lessons that will support generational wealth planning. While many parents may breathe a sigh of relief that a summer job will keep children from being glued to their screens, this is an opportune time for young folks to learn how to navigate life \u2014 being punctual, taking responsibility and working alongside others. Some of the greatest financial lessons can also come from the experience of a part-time job, and here are a handful of considerations:<\/div>\n
File a Tax Return<\/strong>\u00a0\u2014 Often, the income earned within a part-time job is less than the basic personal amount (BPA) for tax purposes (i.e, a non-refundable tax credit available to all individuals that eliminates the tax on the first $15,000 of income (federal, 2023)). As such, some may choose not to file an income tax return if there are no taxes owing (assuming the earnings are under the annual BPA). However, this results in a lost opportunity for kids to generate Registered Retirement Savings Plan (RRSP) contribution room (more below). Those ages 19 or over may be entitled to the GST\/HST credit of up to $467 (2023) and a climate action incentive payment if they live in select provinces: AB, MB, ON, SK, NL, NS, PEI.2 Consider also that supporting a (grand)child to complete the task of filing their own paper tax return can be an excellent teaching moment. Finally, an added bonus of filing a tax return is that the child may have any income tax withheld at source refunded back to them, if under the personal exemption.<\/div>\n\"\"\n
Contribute to an RRSP<\/strong>\u00a0\u2014 This may be a great time to teach a child about the RRSP: the opportunity to compound savings on a tax-deferred basis and reduce a current or future personal incometax liability by claiming the RRSP deduction on your tax return. If the child doesn\u2019t contribute to the RRSP in the current year, any unused contribution room will carry forward. Even if they do contribute to the RRSP, they can elect to defer the RRSP deduction until a future year when they are in a higher tax bracket to optimize the tax savings. Building up an RRSP may provide additional benefits as children grow older, such as accessing up to $35,000 from the RRSP under the Home Buyers\u2019 Plan to aid in the purchase of a home.<\/div>\n
Open a Bank Account<\/strong>\u00a0\u2014 If a child hasn\u2019t already opened a bank account, a summer job may be the impetus. A savings account can help kids learn how to set financial goals and work toward them by putting money aside regularly. Other concepts can be introduced, such as how to make a budget or understanding compound interest \u2014 with rising rates, some savings accounts now pay small amounts of interest, or funds can be transferred into short-term GICs, all of which can demonstrate how funds can grow. If the child is over the age of 18, consider the opportunity of opening a TaxFree Savings Account to take advantage of tax savings.<\/div>\n
Establish Credit<\/strong>\u00a0\u2014 Many banks offer student or youth credit cards (some prepaid or requiring a co-signer), which may be a way to teach the importance of building a credit history and credit score. While some parents provide kids with supplementary cards on their own accounts, this doesn\u2019t allow kids to see how debt can quickly accumulate or to learn the importance of making payments on time. If a child manages their own credit card, they will have a better idea of how purchases quickly add up, as well as how to manage payments, establish credit and build a credit history.<\/div>\n
Many great financial lessons can come from a summer job. And, as one newspaper article reminds us, \u201cteens with a sense of purpose do better in school and are more resilient and healthier\u2026but, these days, they are also the minority.\u201d<\/div>\n\n

The information contained herein has been provided for information purposes only. Graphs, charts and other numbers are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information has been provided by J. Hirasawa & Associates and is drawn from sources believed to be reliable.\nThe information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual\u2019s objectives and risk tolerance. This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Market conditions may change which may impact the information contained in this document. Wellington-Altus Private Wealth Inc. (WAPW) and the authors do not guarantee the accuracy or completeness of the information contained herein, nor does WAPW, nor the authors, assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Before acting on any of the above, please contact me for individual financial advice based on your personal circumstances. WAPW is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.\n\u00a9\ufe0f 2023, Wellington-Altus Private Wealth Inc. ALL RIGHTS RESERVED. NO USE OR REPRODUCTION WITHOUT PERMISSION<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

Remember the days of old, when the summer job was a rite of passage? Those of us who preceded the digital era may connect with an article in the popular press that reminisces on this bygone era: \u201cnewspaper delivery was the first rung on many an economic ladder. Traditional summer work taught generations of teens […]<\/p>\n","protected":false},"author":68,"featured_media":3017,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_oasis_is_in_workflow":0,"_oasis_original":0,"_oasis_task_priority":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[40],"tags":[81,165,145],"class_list":["post-1137","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","tag-investment-insights","tag-saving-strategy","tag-wealth-planning"],"_links":{"self":[{"href":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/wp-json\/wp\/v2\/posts\/1137","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/wp-json\/wp\/v2\/users\/68"}],"replies":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/wp-json\/wp\/v2\/comments?post=1137"}],"version-history":[{"count":3,"href":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/wp-json\/wp\/v2\/posts\/1137\/revisions"}],"predecessor-version":[{"id":1692,"href":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/wp-json\/wp\/v2\/posts\/1137\/revisions\/1692"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/wp-json\/wp\/v2\/media\/3017"}],"wp:attachment":[{"href":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/wp-json\/wp\/v2\/media?parent=1137"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/wp-json\/wp\/v2\/categories?post=1137"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/towerwealthadvisory\/wp-json\/wp\/v2\/tags?post=1137"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}