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If you believe the numbers, then plan on spending over $66,000 for a four-year degree at a Canadian university by the time your toddler is ready to go. And that doesn’t even include food and board – these are projected to bring the total to more than $135,000 by 2022. Before you find yourself hoping your son or daughter doesn’t make it into Yale, take some time out to plan.
There are ways to manage the cost of a post-secondary education and help your child learn to save in the process. Here are a few ways to get started:
Start early
It might seem a bit premature to think about that cap and gown when your child is still in a diaper. But as with any savings plan, the earlier you start, the more time you’re giving your money to grow.
Open an RESP
This one is a win-win. If you haven’t yet opened up a Registered Education Savings Plan for your child, then you could be throwing money out the window. RESPs give you access to free government $$$ to help you save for your child’s post- secondary education. You can put away a lifetime maximum amount of $50,000 per child. And, by applying for the Canada Education Savings Grant (CESG) you’ll be eligible for a top-up of 20% on your annual contributions to a lifetime maximum of $7,200. An RESP combined with the CESG is your first step towards saving for your child’s education.
Involve your kids
You don’t have to shoulder the full cost of a university education on your own – in fact, giving your child the opportunity to help pay his or her own way can be a huge part of the learning experience that goes along with college or university. Talk to your child about how much school costs and how much you’ll be able to contribute. The rest can come from part-time employment or scholarships. Engaging your child in helping to pay for his or her education is an important step towards teaching them the link between money and responsibility.
Also, when talking to your child about how much school is going to cost, encourage him or her to think “big picture” – will post-graduate studies be needed to make their dream job come true? Medical school, law school, teacher’s college – additional qualifications may mean your child needs to plan beyond the next four years.
Scholarships and grants
The earlier you talk to your child about post-secondary education costs the better – in addition to giving him or her a jump start on saving, it will also help him or her plan for scholarship and grant applications. Excellent grades, participation in sports, volunteer work – these are some things your child might need to have on his or her resume in order to be eligible for financial support. Here are a few links to look to for available scholarships and grants:
