Are you dreaming of your little peanut becoming a doctor? Rubbing your belly, imagining junior graduating at the top of his class? Going to University? Me too. Which is why as soon as our first child was born, we started saving. And for good reason.
Post-Secondary education is not cheap in this day and age. And that’s NOW. Think about twenty years from now, when your CHILD is in school…the experts are estimating that a four year University degree at that time will be over $100, 000.
You read that right.
One child’s University degree (if they complete it in four years) will be over $100, 000. I have three children. Is it hot in here? Because I just started to sweat.
You have a few options when it comes to saving for their education and choosing something early on is very important. The earlier you start saving, the better.
Option 1: RESP
This is an excellent option because the government will contribute 20 cents for every dollar you put in up to a maximum of $500/year per $2500 contribution. There’s also a possibility of grants depending on the family’s income. That’s free money. As long as it is used for education after high school. Sounds pretty sweet to me! We put a specific amount in the bank automatically so we don’t even miss it and all the extra money the kids get for birthdays and holidays goes directly in the RESP. Every year or so, we look at our finances and see if we can add a little bit more.
Option 2: Investments
Sit down with a financial advisor and look at your options. Maybe you can invest in real estate or mutual funds! Let your money work for you. This option is more risky, but can work for the right people. Talk to an expert, I am so NOT an expert.
Option 3: Work Together
Realistically, not many families are going to be able to foot the bill for their child’s entire education. The kids can help as they get older. This is their education, after all. Have them save a portion of their earnings from a summer job or put their birthday money from Grandma in their RESP. They’ll thank you when they’re all edu-ma-cated.
Last, you can do what we do. Play catch with them, read to them, encourage them to love school and hope they get a scholarship. Yes, all three of them…it can happen, right? After all, my kids ARE geniuses.
One more thing to consider when your children are getting older and choosing a University is budgeting. If they are not going to be living with you, they need to know how to use their money wisely. Many kids these days go off to University completely unprepared financially and they quickly run out of funds. Teaching them how to manage money is our responsibility. It’s easier if they are staying with us, but if they are halfway across the country, they have to be responsible for their own finances. This may mean planning a budget for student fees, textbooks and supplies, transportation, entertainment and groceries, etc.
As a parent, we’ll always want to save them but instead of handing over money- think grocery gift cards or credit at the University bookstore…these might be a better option.
Do what you can, but start as early as you can. And just cross your fingers they’ll be a basketball or science superstar.
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