You’ve decided to open a registered education savings plan (RESP) for your child. First off, congratulations! This savings vehicle is specifically designed to accumulate funds for post-secondary education and is the only financial product that allows your beneficiary to receive government grants totalling up to $12,800* per child.
But if you want to give your savings an extra boost, here are some tips on how to manage your RESP!
1- Make Monthly Contributions
The best way to ensure your RESP funds grow is to maintain some self-discipline to save. A good option is to commit to contributing the same amount each month. Pick a realistic amount that you know you’ll be able to save; whether you contribute $20, $50, $100 or more, the important thing is to establish an amount suited to your financial situation. It’s better to make small contributions, but to do so regularly. The group RESP is a product that can help you develop this savings discipline.
2- Ask your Family and Friends to Chip In!
It may seem a little embarrassing to ask your family or friends to contribute to your child’s RESP, but it really shouldn’t. Tell yourself you’re making their gift shopping a lot easier. Instead of searching for a present that often just becomes clutter in the house, you’re offering them an original and meaningful alternative: to make a small contribution to your child’s RESP and offer a gift that will last a lifetime.
They can also choose to offer a gift certificate specifically intended for RESPs. They’ll likely be very happy to contribute to your little one’s future education. Remember to keep a record of these contributions in a notebook; you can give it to your teenager when he or she undertakes a post-secondary education. This small token will surely trigger your child’s recognition for the value of this gift and a genuine appreciation for it.
If they wish to, your family and friends can also open their own RESP for your child; ask your representative about this option!
3- Teach your Kids Money-Smart Habits
Why not initiate your kids to saving by encouraging them to contribute to their RESP? As soon as they make their academic debut in kindergarten, explain to them that you are saving for their education in a “big school” later on so they choose to do whatever they want in life. This will be a great way to bring your children to reflect on their future while encouraging school perseverance. If you give your children an allowance, suggest that they save a small part in their RESPs. When they get older and get summer jobs, encourage them to increase their contribution.
4- A Piggy Bank For Education Savings
Leave a piggy bank for school in a visible spot. Whenever you have some pocket change, drop your coins in the piggy bank and empty it regularly to make additional contributions to your child’s RESP. Over several years, these small contributions (plus the government grants to which they entitle) will increase your child’s educational assistance payments (EAPs) significantly.
5- Garage Sales = Extra Funds
Got anything gathering dust on shelves or cluttering your home? Have a garage sale and invest the profits in your child’s RESP! If your child is old enough, ask him to help organize the sale by cleaning and sorting out items, making price tags, greeting clients, etc. You’ll have a great family day, mingle with your neighbours and gain additional funds to contribute to your child’s RESP.
An article by Universitas