A good education is the best gift you can give your children

There are many things we want for our children as they grow up. We encourage them to eat well and exercise so they have the gift of good health. We want them to grow up being happy, to be kind and caring individuals, to fulfill their potential and find a great career. A good education is the backbone of any well-rounded and successful adult and it gives a child the best head start in life they can possibly get. But education can be costly, so it’s never too early to be thinking ahead and looking at how you’re going to ensure your children have the best start to their adult life by funding their education.

The best way to save for your child’s educational future

 You can of course always put money aside in a savings account, and this is a viable option. However, it is not the option that makes the most financial sense. These days most savings accounts don’t make very much in the way of interest and when your savings pot is simply the account where you keep all your savings for a multitude of household expenses, the temptation to dip into it can be difficult to resist. A really good option for saving for your children’s education is to regularly deposit money into a RESP or Registered Education Savings Plan. RESPs are a simple way to save for the specific purpose of future education as these plans have been created purely for this purpose. They’re flexible, safe, and they also come with some very good benefits as  RESPs in Canada are eligible for an additional contribution in the form of grants from the government.

The benefits of RESPs

Tailored for education – RESPs are a savings tool that have been developed entirely for the purpose of saving for your child’s education.

So simple – RESPs can be set up literally in a matter of minutes. You’ll be able to watch your money grow.

They can be  flexible – Committing money for a long term goal can be a little daunting, but with a carefully chosen RESP you don’t have to worry that you’ll be over-committed. Some RESPs are incredibly flexible and take into account life’s ups and downs. You can alter your contributions as you go along your saving journey, reducing payments should your funds be temporarily needed elsewhere and increasing your input when you choose to do so.

They benefit from government grants – The government offers grants to supplement the sums you invest in the RESP. No other investment tool in Canada gets such a contribution.

When should I start a RESP?

With the benefits that a RESP has, even if your child doesn’t have long to go until they start higher education, it’s still something that is well worth considering. Any contribution towards school fees and expenses is going to be a help, and your child is likely to be in education for several years and so you can make quite a decent sum towards the later years if you open a RESP now and start making sizable payments into it.

Of course at the other end of the spectrum, when is it too early to open a RESP? Well really, it’s never too early to start saving for your child’s future. That dream of a fantastic education will come around soon enough as the childhood years fly by, and so, if you start your savings plan now, it will grow as your child does. The earlier you begin a RESP, the greater the chance you have of ensuring all costs are covered when the time comes to withdraw from your RESP and pay for your child’s future of learning. With RESPs being so flexible you can adapt the amount saved as and when, perhaps increasing the payments as you progress, or altering them depending on your financial situation at any given time.

Photo: Ben White, Unsplash