RESP’s and Saving for Post-Secondary Education

pink piggy bank

As loathsome as it is to admit, there are a few things that my parents did right. One of them was fostering a love of travel, and the other was paying for my University. I wasn’t saddled with student loans after graduating, which made saving for a downpayment an easier endeavour.

Saving for post-secondary education

Saving for post-secondary education is much more important now, than it was two or three decades again. I don’t know about you, but I can’t expect to suddenly be flush with cash when Eve heads off to Uni in (gulp) a few years time.

To be fair, my post secondary tuition only cost $1,800 back in the day. Now runs anywhere from $5,000 to$12,000, depending on your faculty and province. Who knows how much it’ll be in a decade? Plus, there’s all the housing costs, books, obligatory beer fund, etc..

Rolled coins

Since I feel obliged to give Eve the best of what I had, we started saving for her postsecondary education as soon as we moved back from England when she was three. We had a few years to catch up on, so we set up a Registered Education Savings Plan (RESP). We’ve only been at it five years and Eve’s account is already sitting pretty.

How, you might ask, is this possible for a freelance writer and her husband (who does not work in oil and gas) manage this? Well, we started early and contribute regularly. Our secret is a little something called RESP-matic.

I don’t even see the $208 that goes out of our account and into Eve’s each month, as we set it up with the bank to come out automatically. We set aside that amount as it’s the maximum you can put away to receive free money from the government.

That’s right. The Canada Education Savings Grant will match up to 20% on the first $2,500 contributed annually ($208/month per kid). It works out to $500 a year, and a lifetime maximum of $7,200. Not maxing out the $2,500 a year, just leaves money (government money!) on the table.

Don’t worry about being locked in. You’ve got the flexibility to use the RESP for university, college, apprenticeship and non-credit courses. In the horrifying event that Eve doesn’t continue studying after high school, we can use these contributions (and earnings) to fund my much neglected RRSP.

Graduation caps

Want to see how easy it is? Check out this cool chart that shows you how much you’ll save depending on your child’s age.

For us, $208 a month isn’t noticeable. Some people ask relatives to donate to their child’s RESP account in lieu of birthday presents, and others can only manage a weekly contribution of $25. And that’s just fine. Every little bit counts! Our only goal is to have Eve graduate debt-free, and I know this is possible through the RESP program.

Have you started saving for your child’s education? What are your tips?

Disclosure: I am part of the RBC RESP blogger program with Mom Central Canada and receive special perks as part of my affiliation with this group. The opinions on this blog are my own.


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8 thoughts on “RESP’s and Saving for Post-Secondary Education”

  1. Great tip about going directly to your bank and not getting sucked in by the door to door salesmen (and they do that for baby photos, too!).

  2. We put alot in the first year, and we’ve done lump sums occasionally, but we just started the direct deposit last month. $200/month (total) for 2 kids. It’s going to take a bit getting used to, but we’d been putting it off forever! Glad we got it set up.

  3. Good for you! I know I also felt so much better once everything was set up so I didn’t have to think about it.

  4. Heather Atton Cook

    I’d definitely notice $208 … but the earlier you start, the less you have to put in per month. I started quite early with both kids. The total amount I contribute each month is $125 …for both and we expect to have enough for at least 4 years of school for them by the time they are ready to go to school.

    I’d suggest new parents talk directly with their bank, not the guys who come around door knocking specifically to sell RESPs to tired new parents!

  5. I can’t believe these door to door people. Relieved we went straight to the bank or else I might’ve boughten life insurance for my babe as well:)

  6. We are so happy we started saving early. I agree with talking to someone in a bank rather than someone at the door as well.

  7. Leslie Brooks (@mrslesliebrooks)

    We do Heritage b/c it was easy and just do the $100 a month that the gov gives. Guess we’ll need a plan for when that goes away!

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