Everything you need to know about your child’s #RESP #financialliteracy
I recently shared my thoughts on saving for our children’s Registered Education Savings Plans (RESP’s). I have been busy preparing my daughter for high school and entrance exams. In doing so, I realized just how profoundly important it is for me to make sure she gets the absolute best shot at an excellent education. This has meant driving her around to extra tutoring sessions and spending countless hours working with her on this at home.
My parents left their families behind at a young age and traveled to another part of the planet to ensure their children grow up with access to an excellent education. They taught us the value of hard work and it’s a life lesson I will never forget. I want to pay their sacrifice forward with my own children. When researching an RESP for our children, we found there were a lot of details we weren’t so clear on. It took time to spend the time/energy to figure it all out. 1 out of 3 young people who decline a post-secondary education do so for financial reasons.
Average annual RESP contributions per beneficiary by province and territory:
Quebec is among the provinces with the lowest contributions.
According to Statistics Canada, “When parents value and support post-secondary studies, their children are less likely to abandon their studies and are twice as likely to pursue a post-secondary education.”
One popular misconceptions that many parents hold is that if their child does not pursue a post-secondary education, they will lose all of their money. Contrary to popular belief regarding group plans, if the child does not pursue a post-secondary education, at plan maturity, the subscriber receives a 100% refund of the amount invested. As for the government grants, these are returned to the government. In a group RESP, the return on the savings are kept in the fund maintained for EAPs and redistributed among the other beneficiaries who pursue a post-secondary education, thus increasing their payments. This is the principle of attrition in the group RESP, which is intended to encourage academic perseverance.
Several options are also offered (subject to certain conditions) to investors, for example:
- Transferring to an individual plan
- Transferring to another beneficiary
- Transferring to an RRSP
- Receiving the income on contributions
Since day one, Universitas has focused on providing access to education for children of all backgrounds. Here are a few of Universitas’ advantages.
- Universitas is a pillar of education savings in Quebec; the foundation played an important part in the creation of the provincial government’s RESP grant (Quebec Education Savings Incentive). The efforts of Universitas in 2007 motivated the government to offer this provincial grant to encourage parents to save for education. Since then, there has been a growth of almost 25% in the number of RESP investors, which cannot be overlooked
in the case of low-income families, Universitas offers an individual plan with no sales charge or obligation to contribute. The sole purpose of this plan is to ensure the child receives the Canada Learning Bond, which can reach a lifetime $2,000.
- Universitas is dedicated to managing RESPs; all their efforts are focused on this product. They therefore have extensive knowledge of the workings of the government grants and their maximization which they access as soon as they are available to ensure immediate investment growth on these amounts.
- the beneficiaries.
If you whish to learn more about Universitas’ RESPs, visit universitas.ca.
DISCLOSURE: Please note that while this post is sponsored on behalf of Universitas Financial, all opinions are 100% my own.
RESP’s are definitely a great way to save money for the kids! In order to save efficiently, I think the debit needs to be automatic each month, if not, it’s too easy to use the money if needed, and then assume you will add more the following month.
Here in the US we don’t have this program. We do have tax free savings programs. It sounds like a great way to save up for college, which is getting more expensive by the day.
Wow, this sounds like such a great program. I love the help they are providing for families who cannot otherwise afford it. Education is so important and I think people should invest more time and money into programs like this.
There is so much information to think about. Thank you for breaking it down into more manageable steps. It helps me to sift through the information and see what I need to research further for my children! I appreciate the help!
We do something similar for our kids but it is taken out of our paychecks monthly and put into a special educational savings plan. I hope that it ends up really helping them (and us) when it is time to start thinking about continuing education. This is great information for parents. We should all be preparing for this.
This looks like such a great resource for parents and their kids. I think all parents should do something like this to prepare for the financial burdens of education and we should all be preparing for this in our future.
I’m so glad you wrote about this. I try and push this with my friends. I try to get them to even do $25 a month from the time they are born.
It is so great to have a plan in place for saving for school! I am currently in college and paying for it can be so hard, I wish I had saved more ahead to time! I’ll be making sure I use a plan like this in the future for kids!
Hi Fariha! I think it’s fantastic that you are taking steps to ensure your children will have the opportunity to further their educations! We have similar programs offered here in the states! It was very interesting to read the various costs/province/territory breakdowns. Thank you for sharing! This was great information!