I was one of the very lucky few kids that I knew in high school that didn't have to worry about getting a part-time job and saving for post secondary school. My parents had set aside money for all of us to go to post secondary school if we chose to. Now, that's not saying I didn't have a part time job in high school, because I certainly did, but I was fortunate that unlike most of my friends I didn't have to take a year (or more) after high school just to save for tuition.
When I was contacted about writing up a post about saving money for your child's education with RBC Bank with their RESP program, I jumped right on board.
I worry daily about my children's education, where they are going to go, what the economy is going to be like in another 10-15 years when my son is through with school and is looking for employment.
Every time that boy of mine starts getting into his electronics board, building circuits or designing his newest invention, I quietly start calculating the cost of an engineering degree in my head.
My daughter on the other hand, has been assured that we can cover veterinary school if that's what she chooses when she's done high school.
Those educations are going to come with a hefty price tag.
Like my parents, my husband and I are most certainly going to do everything in our power to help ease the burden of my children's education.
I would like my children to walk away as debt free as possible at the end of their education.
Lordy, I just stressed myself out saying that.
It's true, however. They will have to get part-time jobs to fund their outside activities, my door is always open for them to live at home until they are done university and since they will be adults (gulp, I just got sad writing that) they most certainly can make their own living choices if wanted and the appropriate part-time job choices to fund it.
However I really don't want them burdened with debt starting fresh out of university.
That's where the RESP comes into play.
What is an RESP, you ask?
The 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.
You can check out the details on the RBC website here to learn more.
For those of us in Alberta, we get a special bonus:
Alberta Centennial Education Savings (ACES)
The ACES Plan will contribute $500 to the RESP of any child born to an Alberta resident after December 31, 2004. An additional grant of $100 will be paid when the child reaches age 8, 11 and 14, provided he or she is still in school. The total ACES grant is $800, and can be shared among siblings.
The Canada Education Savings Grant will match up to 20% for the first $2,500 contributed annually. You can receive up to $500 annually, which maxes out to a lifetime amount of $7200. That's a lot of tuition that just fell in your lap!
Not to worry, if your child decides not to go to post secondary or the classes/degree they take only takes up a portion of the saved RESP the balance is eligible to be transferred over to your RRSP, making it a win-win situation for both you and your child.
Now, I DO actually bank with RBC, another reason that I joined in to promote their RESP's. They make it so easy, with their RESP-MATIC, for people like me who forgot things.
Take a look at the chart below and see how a mere $25 a month can end up helping your child immensely when it comes time for post secondary school.
The time to start saving is most certainly now and it's never to late to get those RESP's going!
Do you have any saving tricks? My trick is programs like the RESP-MATIC, because I need some one to just take the money out and invest it regularly. I can forget all about it, knowing that things are being taken care of!
“Disclosure: I am part of the RBC RESP blogger program with Mom Central Canada and I receive special perks as part of my affiliation with this group. The opinions on this blog are my own