A university and college education is essential for students. For me it meant studying in a field I love, Kinesiology, while also experiencing my first time living away from home. Up until that point I had led a sheltered life at home with my parents purchasing all of my material needs and taking care of all the bills without ever including us in these discussions. Heading to university away from home was the ideal dream for so many of us – we all had this vision of awesome parties, living in a posh environment with cool new friends and our own space.
The part that we as young adults never realized? The total cost for this education and experience.
My parents had started an RESP when I was in my early teens but were not able to contribute as much as they had hoped to before I went off to school. I had enough to cover my first year of tuition (which was just under $5,000 CDN) but I never took in to consideration the cost of textbooks, supplementary fees, rent and utilities for the lovely apartment we had to have. In my first year alone I paid an extra $1,000 for textbooks and most of them were used. When I lived at home my parents were there to take care of all the money issues but for the first time in my life I was left to deal with my finances on my own and I was running out of money. Like many students I had to turn to student loans, OSAP and credit cards. Access to this credit was so easy and it didn’t feel like “real” money so it kept adding up. To be honest I felt like I had been lied to all those years about money – no one had taught me about savings, budgeting and credit. It was all to easy to rack up over $15,000 CDN in debt.
When I gave birth to my first son I was in my second year of undergraduate studies. After I gave birth, we knew the best gift we could ever give our son was an education and to achieve that we opened him up an RESP. I never wanted my son to feel the way I was feeling – hopeless and beginning to drown in debt. I wanted him to have some financial freedom when choosing post-secondary education. To me this was the most important decision as parents we would ever make. It is also the decision that I am the most proud of. The years keep speeding by and before I know it both of our boys will be ready to make the leap to post-secondary education.
With the wealth of information out there about the rising costs of post-secondary education as well as the importance of that education I am always surprised when parents say they don’t have an RESP or that they plan on financing with credit when the times comes. RBC has put together a fantastic resource of information on their website for families looking to save for post-secondary education.
Some of you may not have heard about RESP’s before and that’s okay too! Here is some information for you from RBC about these special savings accounts:
What Is An RESP?
- A Registered Education Savings Plan is a tax sheltered account that helps families save for post secondary education.
- You can combine flexible payment plans and direct government assistance (we received $700 in grants because I myself was a student when I first opened up my son’s RESP) to maximize savings.
- The beneficiary only needs to be a Canadian citizen and have a social insurance card to set up an account (super easy!).
- Easy and affordable payments over a long period of time allows you to maximize savings ($50 a month over seventeen years adds up to a lot of money for your child!).
- The Canada Education Savings Grant and Canada Learning Bond: the Government is giving you money to save for your child’s education! This is extra money above what you are contributing and only increases your savings over time.
- It is never too early nor too late to open an account. Head into RBC to meet with an advisor, learn more about your options and set goals.
- Save based on your own financial situation. I know that I personally can not afford to save as much as I wish I could but every little bit counts.
- Be open and honest with your children. Sit down with them and talk about money, tuition and savings. Let them view their own statements, open their own bank account and deposit money into their RESP. Let them take pride in saving for their education.