We all know how important education is for children to be successful in their lives. One of the first observations people make when talking about post-secondary education is that it’s very expensive.
It’s a challenge to pay for education costs, and often the biggest question parents are faced with is: How soon should I start saving?
Here are some answers and useful tips.
Start saving early with an RESP
Open a Registered Saving Education Plan (RESP) for your child or children, and you can benefit from terrific incentives offered by the government. Apply for the Canada Education Savings Grant (CESG), and the government will deposit an extra percentage depending on your yearly contribution and income to help your child’s savings grow faster.
Anyone can open a RESP on behalf of a child — a parent, family member or friend of the family.
The Canada Learning Bond
Families that are recipients of the National Child Benefit Supplement can receive up to $2,000 in free education money for each of their children born after January 1, 2004. All parents have to do is to open an RESP account. No contribution is required from the parents to receive the bond — they simply must open the account on behalf of the child/ren.
The government will deposit $500 right away into the RESP, and could deposit up to $1,500 more by the time the child is 15 years old. That’s up to $2,000 for a child’s education after high school! This can be a great first step for a young person to consider post-secondary education as an option.
There are many options and providers for RESPs. Visit www.smartsaver.org to find a complete list and more information on RESPs, the CESG and Canada Learning Bond.
It’s never too early to set up your child for success!
Note: The YMCA of Greater Toronto is a partner in the SmartSaver initiative solely as an information provider, and does not sell RESPs or investments.
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