It’s time to get smart about funding your children’s education.
You want your children to be successful through a higher education but the cost of a post-secondary just keeps getting higher and higher. The tuition and related fees are not the whole story. They represent only about one-third of the expenses that students face each year. Add in accommodation, food, transportation, books, computers, leisure, and the cost of a four-year post-secondary education could add up to more than $80,000. But there is way to meet these rising costs. By setting aside education funds for your children now, you can help them earn a university or college degree and avoid the crippling debt many students are incurring.
A Registered Educations Savings Plan (RESP) is an effective way to save for, and maximize the money available to, children when they enroll in a post-secondary program. The government of Canada and certain provinces offer several grants to help you build their education savings. Contributions are not tax-deductible, but money inside the plan and any grant they attract can grow tax-free until it’s withdrawn for education purposes. Once paid out, the earnings are taxed in the hands of the beneficiary (the child). Presumably, the child will be in a low tax bracket when the funds are withdrawn, and will therefore pay little or no tax. Saving for a child’s education is one of the highest financial priorities most people have and one of the largest expenses they will face. Start today to invest in your child’s future.