Strategies on how to save for your children’s education
One important financial goal you might have is saving for your children’s post-secondary education. But this is likely not your only financial goal and it is often difficult to prioritize and consider your complete financial picture. Discussing with your financial adviser all of your financial goals will help you work together to develop a strategy that factors in all of your priorities and sets you on a course that will best help you achieve them.
Here are strategies to consider as you plan:
Setup a Registered Education Savings Plan (RESP) — An RESP is a tax-deferred savings account designed to help you save for post-secondary education. The government will match 20 per cent on every dollar of the first $2,500 you save in your child’s RESP each year to a maximum of $500 per year for each child up to a $7,200 lifetime maximum.
Consider setting up an automatic payment plan — You can set up an automatic payment plan which systematically withdraws funds from an account to make contributions to your RESP.
Create a budget and stick to it — Work with your financial adviser to determine a monthly contribution amount you can afford and increase it when you can.
Involve your family — For special occasions like birthdays and holidays, you could encourage grandparents or other family members to open an RESP in your child’s name or contribute to one that is already set up.
Explore financial assistance options — A good place to start is the Government of Canada’s Resource page at www.canada.ca/en/services/ finance/educationfunding.html where you can explore student loans, grants and scholarship options that might be available to you
By following some of these saving strategies when your children are young, the investments will have more time to grow and you will be in a better position to support your children’s postsecondary education when the time comes.
There are options and resources that can help make saving for your child’s education easier.