If you are a parent, you know worrying over your child’s future comes with the territory. Whether your child is still learning to walk, heading off to their first day of school or trying to choose the right university, there can be plenty of anxiety around the choices they make, not to mention the choices we make on their behalf.
One of the best ways we can equip our children for the future is to provide them with the best educational opportunities we can afford. But even with two parents working, for many families, affordability of post-secondary education can be an issue.
The price of a university continues to go up. While tuition represents just 34 percent of college costs, according to Maclean’s, other costs like rent, extracurricular activities, books, transportation and more add up fast.
Yet, of those university students surveyed, nearly two-thirds don’t have a Registered Education Savings Program or RESP to draw from, which oftentimes means parents must budget for school costs out of their monthly earnings.
However, parents who create a financial plan for their children’s post-secondary education sooner than later and begin saving for their education early can buffer escalating education costs.
Canada’s Registered Education Savings Program or RESP has been designed specifically to give families a head-start on saving for post-secondary education.
Benefits of Saving with an RESP
An RESP is an investment resource that the Canadian government started in the 1970s to encourage parents to save for the cost of their child’s education. A tax-deferred savings vehicle, RESPs have become in many ways a lifeline for Canadians in making post-secondary education financially attainable.
RESPs can be established through banks and other financial institutions, as well as through distributors like Children’s Education Funds Inc. (CEFI). Having helped Canadian families save for their children’s post-secondary education since 1991, over the past nearly thirty years, Children’s Education Funds have become leading RESP distributors and managers.
In addition to providing parents an accessible way to effectively save for post-secondary education, what makes RESPs particularly attractive is the access the plans provide to the Canada Education Savings Grant (CESG), a grant program that has the government contributing to eligible RESPs.
Other Education Saving Tips Outside of RESPs
In addition to setting up an RESP for your child sooner rather than later, there are other important guidance points to know when planning how to save for higher education. These points include:
- Again: begin saving early, so that your savings can benefit from accrued interest;
- Invest cash given to your child as gifts;
- Set up a pre-authorized payment into your RESP account
- Encourage your children to save some of their part-time work earnings for their university education.
While there are some things that you can’t help your children prepare for – like their first skinned knee or heartbreak – post-secondary education is something that you, as a parent, can help them financially prepare for.
With good planning and wise investing, you can build a strong savings account that will help your child achieve whatever educational dreams they have for their future.