Paying for your child’s education starts in the womb
Planning further ahead financially, should be one of the things on expectant parents’ to do list; parents should take into consideration the cost of post-secondary education and consider saving from the time their child is born. According to TD Economics, today, the total average cost for a four-year Canadian undergraduate degree for students living at home is $55,000 and students who are studying abroad is $84,000. But I wouldn’t get too comfortable with these figures; this amount is still growing and by the time a child who is born today turns 18 years old, these numbers are expected to increase to $102,286 for students studying and living at home to $139,380 for student studying abroad.
It is no surprise that young adults who are paying for their education graduate with large amount of debt and parents can help prevent that by starting a Registered Education Savings Plan (RESP) before the child turn 1 year old. Starting early means that small payments can add up by the time the child turns 18 and with group plans, compounded interest can benefit the plan.
Having an RESP can help relieve the stress of financial ability that many students may have, it is found that paying for school is the primary cause of student stress, according to the 2012 BMO Student Survey.
As parents, we should also start teaching our children about finances and the importance of saving at a young age. Approximately 72% of parents believe that talking to children about good money habits should start between the ages of four to nine, according to the Investors Group research.