When I was in high school, my parents were always on me about getting a part-time job and setting some money aside for college. I’ll be frank when I say… I didn’t listen. While my parents were gracious enough to have set aside enough money to cover my tuition fees. However, it was up to me to cover the remainder of the costs.
It wasn’t until my first year in college that it hit me. My parents hadn’t been bluffing all those years when they insisted I save for school. Tuition aside, there were many other huge expenses that came with attending college or university. Text books and housing to name a few.
Thankfully with a part-time job I was able to get by and not incur any debt from my post-secondary education.
Ideally, I would like for my children to one day be able to head to college or university (should that be the path they choose), and not have to worry about the overhead of all the expenses.
I worked for a financial firm as an Advisor Assistant prior to becoming a Mom. It was at that point that I started thinking about the future of (at the time) my unborn children. It was at that point I really began to understand the value behind setting up a Registered Education Savings Plan (RESP).
For those who are unaware…
A Registered Education Savings Plan (RESP) is a tax-sheltered plan that can help you save for a child’s post-secondary education. With the high cost of education, many parents, grandparents and other family and friends are recognizing the need to save well before the expenses become a reality.
An RESP combines flexibility, tax-deferred investment growth and direct government assistance to help you reach your education savings goals for your children.
When my daughter was born, I immediately set-up an RESP Family account. This account allowed me the option to add additional beneficiaries down the road, and gave me the cushion to start saving for my child’s education early. There is really never too early of a time to start setting money away for your child’s future. The earlier the better is what I would suggest. Upon getting the account in place, we also got a pre-authorized savings plan also in place. This plan allows for a certain amount to be pulled straight from our bank account each month, and invested straight into the RESP.
Another great incentive to set-up an RESP is the potential to receive “free” money from the government to put towards your child’s education. Did you know that The Canada Education Savings Grant will match up to 20% on the first $2,500 contributed to an RESP annually. That could mean up to $500 a year, up to a lifetime maximum of $7,200! It really is a great incentive to save!
Here are some great tips on how to save for your child’s education:
- Start by investing a realistic amount regularly: for example, $25 a week can grow to over $50,000 in 18 years.
- Take advantage of free money. Get up to $500 a year in government grants for a total of up to $7,200 (the government will match 20% of the first $2,500 contributed each year for eligible children).
- Set it and forget it. Saving for your child’s education is easier when you save automatically with RESP programs, such as: RBC RESP-Matic®.
To learn more about RESPs and their benefits, visit the RBC RESP webpage.
Disclosure – I am participating in the RBC RESP Blogger Campaign by Mom Central Canada. I received compensation as a thank you for participating and for sharing my honest opinion. The opinions on this blog are my own.