If you are like us, you might be worried about financing your child’s education, when the time comes. With so many other payments and savings funds on the go – it is overwhelming to even think about adding in yet another savings account, not to mention where the money will come from. We’re trying to teach our kids the value of money and when to save – obviously education is top of the list.
With this said, we obviously want to think ahead about our child’s education and of course do what will be in their best interests. So coming up with strategies for saving for this purpose is an action we want to put a lot of thinking and planning into.
Although, our children are still young and while I had figured we had enough time to sort this out – the reality is the sooner we begin to set aside money for their education – the better. Here are some options for how to go about funding this important future expense that plan to examine and hope they can be of help to other parents in the same situation.
Government Programs
First up, an option for helping to pay for your child’s education, is to take advantage of the Federal Government Savings Programs. One of these such programs is the Registered Education Savings Plan (RESPs). Similar to RRSPs, RESPs are specialized accounts that you can open and by making regular contributions, you can work towards saving enough money for post-secondary expenses.
An added advantage to this savings program is the tax benefits it offers. Not only are you building interest, the interest you earn on these contributions are non-taxable until the money is taken out. While it is a good idea to start saving as soon as possible, you will also want to investigate further into the specifics of these accounts, including the requirements for making contributions. One set guideline to be aware of, is the 18 – 22 year timeline, you have to make your contributions. This will have direct implications for when you should look to open your account, and then you can start making contributions/withdrawals, in accordance with your child’s post-secondary start date.
Personal Savings Strategies
In addition to seeking out government programs, there are personal steps you can take in your everyday life that can help you to start putting away money for your child’s education, as early as you want. Also, we know if we have to our child can try to get a student loan. Although we’d prefer they be debt-free when they get out of school, I guess that is always an option.
Have a Plan
Above all, perhaps the most important strategy is to develop a plan for saving. Before, you can even do this – you will need to estimate how much the total educational costs will be and then put your budget and savings methods into action. To predict how much tuition will potentially be- you can do so by looking at the average tuition fees across the country. If your child, however plans to go to post-secondary education outside of Canada, then you will need to anticipate these amounts being even greater. You can keep in mind also that some tuition may be covered by student loans and bursaries – and they may lower the total cost – however it is best to prepare for the full amount, if possible. It is also realistic to think that our financial commitments and expenses will only grow, as we move throughout the years – and it just might be more difficult to save enough as the time grows closer.
You may also wish to invest in a variety of other financial avenues, including mutual funds, savings bonds, and even in the stock market. Many financial advisors encourage the diversifying of your investments – to give you a better chance of seeing more financial gain and lowering your loses. You will want to consult expert advice however, should you wish to pursue these additional angles.
Aside from the financial benefit of this writing piece, today I also learned an important lesson about enjoying this time of our lives, when my children are young- while they are carefree, without the weight of the world on their shoulders. This time I know will inevitably come – however for now this heavier role is for us to carry, as their parents.
While worrying is definitely part and parcel of being a parent, if we are more prepared for the important milestones, such as being able to fund their education – this also lifts some of the stress and burden we will also be required to carry. I feel a bit lighter by simply saying this out loud (or at least in writing).
