It's hard to believe 2014 is almost over. While many parents are busy wrapping presents, trimming the tree and visiting family this December, it's important to remember to do an annual check-up on one of your most important investments: your child's Registered Education Savings Plan (RESP).
November 16-22, 2014 marks the first ever Education Savings Week in Canada. Here are three reasons why we're celebrating Education Savings Week (and why you should, too!)
This Thanksgiving, I have to ask -- have you thanked your investors lately? That's right, your investors. Not the power brokers on Bay Street or Wall Street, but the people who were there for you from the very beginning.
It's no secret that Canadian students are stressed out financially. Many graduates are taking on a significant level of student debt. Recent numbers from the Canada Student Loans Program reveal that in 2012-2013, 472,000 full-time students and 9,600 part-time students took out $2.6 billion in loans from the federal government. Between 2005 and 2012 alone, Statistics Canada also reported that student debt grew by 24 per cent. All of this reminds us that saving early for university or college should be a top priority for new parents if they want to help set their kids up for the greatest potential success.
Many new jobs will emerge -- such as a robot counsellor, who is someone that matches robots with humans depending on their needs. While it all sounds very sci-fi in 2014, many of our job predictions are based on technological advancements that currently exist and are just 'waiting in the wings' for commercial development. It's all very exciting.
Investing in an RESP early on can give you peace of mind knowing that money is there to help fund your child's education. The earlier you start, the more your savings can benefit from the power of compounding. If you start investing $210 every month for your newborn, their RESP could be worth as much as $30,743 more than if you start when your child is five.
There are many different ways to invest the money inside your RESP. As a parent, my rule was simple: I did not want to take any significant risks with the money I was saving for my children's learning. I was satisfied with receiving the 20 per cent government grant, and a modest return on my money. For me, it was more important that the money be there when I needed it.