“When you’re a new parent, you’re concerned about doing the right thing. You’ve got this infant child with so much potential, and hearing that you may not be able to afford his education makes it very hard,” says Mike Maloney, a Saint John, N.B.-based father who started saving for his son's education when little Simon was only a few months old.
But how do you find the money to save for something that seems so far away when more pressing items like kitchen renovations, family trips and your own retirement savings compete for attention?
Sarah Deveau, mother of three and author of Money Smart Mom: Financially Fit Parenting and Sink or Swim: Get Your Degree Without Drowning in Debt, provides the following smart ideas for putting money aside for your child’s education:
1. Set up an RESP
An RESP (Registered Education Savings Plan) is the easiest way to save and grow your child’s education fund, says Deveau. “What many parents don’t understand is that when you create an RESP with a bank or a financial advisor it can be flexible,” she says. “If you can’t commit to investing $200 or $500 every month, wait until you get a cash gift from Grandma, or a raise or bonus at work and make a lump-sum payment.”
2. Make your contributions automatic
Ask your financial institution to set up automatic, regular contributions from your savings account to your RESP. Some parents set it up so that monthly contribution comes out a day or two after their salaries get paid so they really don’t have to think about it.
3. Look for cash in the toy box
If you tend to throw away or donate old toys and outgrown clothes, take a closer look at them and see if there are any you might be able to sell at a consignment store or yard sale. It not only cleans up the toy room, but may provide you with some extra cash to invest.”
4. Trim creatively
Between the play centres, the video games, the gymnastics classes, and the elaborate birthday parties, there are always places to trim. Think about the $2000 you might spend on your child’s birthday. Consider cutting your child’s birthday party back to $1000, and investing the other $1000 into an RESP. You’ll immediately have $1000 in the account, and you’re still having a party.
5. Involve your family
Deveau recommends asking relatives to consider giving “experience gifts,” such as paying for soccer camp or swimming lessons, rather than toys. “They’re more memorable than toys that get lost or broken, and you can put what you would have spent on these lessons or activities into an RESP to save for their future education,” Deveau says. As well, you can encourage grandparents looking for a way to contribute to also open RESPs in your children’s names.
Besides all these five tricks, you can always learn more about Sun Life education savings plan.
Sarah Deveau, author of Money Smart Mom, August 28, 2017, 5 smart ways to save for your child’s education? Retrieved from Canada Sun Life Corporate Website read the article.
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