Question: I want to start building a financial plan for my 7-year-old daughter. Which of the following option would be the best way to start in Canada?
1. open a checking account
2. open a savings account
3. start an RESP
4. apply for a credit card
5. add as an additional user on my credit card
6. open a TFSA for her
Answer: The best option to start building a financial plan for your 7-year-old daughter in Canada would be to open a Registered Education Savings Plan (RESP) and a savings account. An RESP is a government-incentivized savings plan that helps parents save for their child's post-secondary education. Contributions to an RESP are not tax-deductible, but the investment income earned within the plan grows tax-free, and when the funds are withdrawn to pay for the child's education, the funds are taxed in the child's hands, which is typically at a lower tax rate. A savings account is also a good idea as it can help teach your daughter about saving money and managing it. It's important to note that the other options you listed, such as opening a checking account, applying for a credit card or adding her as an additional user on your credit card, are not appropriate for a 7-year-old and should be avoided.
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