Registered Education Savings Plans (RESPs) have a lot to offer Canadian families. From the 20 per cent bonus top up from the federal government to the tax-deferred compounding that occurs in this type of investment, contributing to an RESP is a great way to pay for rising post-secondary costs.
The reality of those costs comes as a surprise to many parents.
A 2018 Maclean's survey reported students who moved away from home to attend school in 2017 spent an average of $19,500 per year. Given the historical rate of tuition increases and general cost of living, these costs could increase at a rate of three per cent per year, hiking the average yearly cost to more than $37,000 for a child born today.
That’s a total of $148,000 over four years.
And yet, only half of Alberta families are taking full advantage of RESPs and the Canada Education Savings Grant (CESG). In this article, we outline four steps you can follow to create a financial plan for your child’s education, and how to achieve it by making the most out of RESPs and the CESG.