Saving for college without breaking the bank
According to the Bank of Montreal, the cost of university or college education for a child born in 2011 will rise to as much as $140,000. That’s quite a bit of money, especially if you have more than one child.
There are many reasons you may feel the crunch when it comes to putting away money for the education of your child; however, like any savings or investments, it’s important to pay yourself (or your children) first.
Some of the ways that you can easily build the investment in your child’s future include:
Start early
Opening a Registered Education savings account can be done as soon as your child receives their social insurance number, available right after birth.
Beginning contributions to this account as soon after birth as possible increases the principal and compound interest, increasing the amount that is going to be available for the education of your child. Start early and get ahead.
Apply for education grants
There are multiple grants and programs that are available for Canadian parents. These grants will deposit up to five hundred dollars into every RESP that is opened for your child through a recognized institution, often automatically once it has been opened.
Anniversary deposits are also made into the account by the government, to boost the savings potential.
Use preauthorized transactions
Contacting a representative at your financial institution and setting up preauthorized debits from the account to the education fund means that the transactions are going to be debited automatically.
Every month, the amount will be transferred into the investment fund for your child. This is what we do, and is one less thing we have to worry about every month.
Make small sacrifices
Would you give up something small in your lifestyle for the sake of your child’s education?
Could you live without that daily latte? Could you give up the expensive movie channel package or even a couple of bagged lunches each week? Making these small changes can help to find the money in the budget to contribute to an education fund.
Skip the toys, go for the trust
Grandparents especially are known to spoil their grandchildren. Rather than buying a toy every month or so, it might be a good idea to explain that this money would be better spent on an education fund for your child. Grandparents can contribute annually, monthly, or with a one-time contribution.
Saving for your child’s future doesn’t have to be hard. Simply cut out a few indulgences in your life and put your extra cash away.
By following the tips above, you are sure to see a major increase in the amount of money you are able to set aside.
Have you started to contribute money to your child’s education fund? What are some of the ways that you have made it possible with your budget?
Comments
Every month the $100 Universal Child Care Money that I recieve is taken out and put into my childs RESP automatically. I don’t miss the money and I know it will make a big difference in her future!
We do the same thing with that $100.
I got her SIN right away and that’s what we’ve been doing with it since the day she was born. I figure, why not let the government contribute to her education!
We were blessed in that about the time we were thinking of setting up an RESP (they were new), dh’s mother remarried and her new husband wanted to contribute to a fund for the kids’ education. Talk about melting HER heart-she basically has struggled with lack of money her whole life, married a man who never had children, so that was a bit of a concern to her, and it was his idea to do so. It would not surprise me if, to the penny, it covers the cost of dd’s BA (here at home) and ds’s technical diploma (also here at home). It has enabled us to provide cars for the kids to drive (we live in the boonies), otherwise that money would be going to their schooling and mama would be sitting home or car pooling a LOT more!!!
Start early, contribute regularily-the habit is what is important! If you can contribute enough to get the government grant-all the better!!! “Free” money from the government isn’t easy to come by for most of us!
Although I agree with providing some money for education for my children. I don’t feel that you should be putting all your into their future! I paid for my post secondary, by taking out loans and winning scholarships. I worked hard to achieve good grades to maintain my scholarships. Children these days feel that it is up to the parents to pay for their education, and they just party and get bad grades. My kids will pay for their education, and I will pay them back once they maintain my “scholarship” deal.
Rachel,
I don’t disagree with you at all! We would never have allowed our children to go away to school if they didn’t have a burning, long-standing passion for a career that required it. We have no university here, but there was a new BA programme through Windsor through our college and dd didn’t really know what she wanted to do, and enjoys learning, so took that while living at home. Sadly these days, so many jobs require a BA for no real reason, so now she has that. Ds is taking a technical diploma locally. There are many plants here where he can find a family-supporting wage. While I’m not a fan of loans for school in general, I certainly would not fund a “finding myself” and “party 101” path!!!
We use the $100 from the government as well!! And pool any birthday money and Christmas money (not all) and additional saved money to deposit into our daughter’s resp in January every year. This way, we know we’ve contributed the max for the year and can then start saving for ourselves the rest of the year.
My daugher just turned two, we opened it a couple of weeks after she was born. We pay in the 100 universal child care and an extra 60 dollars making it 160 a month and 2000 a year, (our contribution) plus christmas and birthday money goes right in. My husband and I just finished paying off our school debt the day befores she was born.. Its pretty important to us that she does not have to struggle paying of debts and we can do as much as we can to help her be as educated, happy and hopefully debt free!!!!!!
Start early and contribute regularly! My son graduates in two years and what a relief it is to know that his education costs are taken care of.
Hi,
Start contributing right away. BUT do it through your bank, not through Knowledge First or RESP scholarship plan companies. We did this as we were so young and dumb. You will never get a straight answer, there are stipulations for getting your child’s money, you can’t get a detailed account statement of withdrawals and interest and they charged horrendous amount of money for extra points and enrollment fees… for one of our kids it equaled $680 and we will never see that money, they also won’t just give you the income for certain plans unless you child “qualifies” …. etc. Do you homework, read the small print and go through your bank!
My 19 year old took a year off after he graduated to work and save money for University. Good, thing because we cannot get a straight answer out of Knowledge first as to exactly how much money he will be getting. We left it sitting there for another year, you think it would be collecting interest – NO! Ridiculous.