Start today - Even if it is only possible to put a small amount of money aside every month for education, start doing it now! Contributions start earning interest right away and with the rising cost of post-secondary education it is important to save as much money as possible.
Look into bursaries - It is never too early to start looking at bursary opportunities. Many national and provincial bursaries and scholarships start in grade 10. When your child is old enough, book an appointment with their school's career counselor to talk about different options.
investing in education
As tuition and living costs rise, it becomes increasingly important to save for what matters. While the idea of saving enough money to provide your child with a university or college education may seem a bit out of your range, opening a Registered Education Savings Plan (RESP) can help make it happen.
Talk about post-secondary costs
Saving for children's education is a shared family responsibility. Spend some time with your child to look at post-secondary programs of interest. Discuss the costs involved in obtaining a degree or diploma - tuition, books, living expenses - and calculate a rough estimate of the total cost. Talk about different ways that this education could be paid for.
Open an RESP account
An RESP is a special account that helps families save for post-secondary education. Any growth will grow tax-free until the beneficiary named in the RESP enrolls in education after high school. In addition to the interest you may earn on your investment, you will also receive yearly contributions from the Canadian Education Savings Grant (CESG).
To give you a better idea of what you can save with an RESP account, check out this example.
Let's say your child is now ten years old...
|Your family's combined income||Between $35,595.00 and $71,190.00 a year|
|Your rate of return*||6%|
|Your investment period||8 years|
|Your personal contribution||$2,200.00 a year|
|Your total personal contributions||$17,600.00|
|Total CESG contribution||$3,600.00|
|Interest earned - on personal and CESG contributions||$6,512.73|
|Your Total Education Savings||$27,712.73|
These numbers are an estimate only. *Rates of return will vary.
After deciding on an RESP account, sit down with your child and discuss how you will make contributions. Both you and your child should be putting some money in this account. Set up a plan that is feasible and determine a percentage of gift money, allowances and part-time job income to be put away.