Toronto ON – Children grow up so fast; elementary school one day and graduating high school the next. What have you, as parents, put in place to help your children reduce their debt-load when they graduate? The 2010 Statistics Canada reported 57 per cent of graduates incurred debt while completing their education. Registered Education Savings Plans can be good money-making investments if you take advantage of the grants offered by the federal government. Show some respect for RESPs; they will be the smartest investment you make in your child’s future.
“Building RESP accounts early and applying for the federal government grants will ease the financial pressure on children when they complete their post-secondary education,” says Jeffrey Schwartz, executive director, Consolidated Credit Counseling Services of Canada, Inc. “As well, having the ability to save slowly, over 17 years, takes some of the stress off parents when tuition is due.”
One small deposit from each paycheque will add up to a big amount over the course of a year, 10 years, even right up to 17 years. Here’s some advice on how to start a Registered Education Savings Plan today:
• Take advantage of the Canada Education Savings Grant (CESG)- the federal government will contribute 20 per cent on every dollar of the first $2,500 you save in your child’s RESP each year – that’s up to $500 per year for just participating.
• Depending on your family net income you may be eligible for an additional annual grant under the CESG program
• Apply for a Canada Learning Bond to add tax-deferred supplements each year.
• Do your homework – research the RESP that best suits your family’s needs.
• You can contribute up to a maximum of $50,000 for each child you name as a beneficiary in an RESP.
• Make saving invisible by automatically depositing a small amount from each pay into the RESP account.
• Designate a hard-to-open, cool-looking container to collect coins at the end of every day; deposit the money into the RESP account.
• Encourage your children to contribute to their RESP account – they need to feel ownership of their education.
Consolidated Credit Counseling Services of Canada, Inc. is a national non-profit credit counselling organization that teaches consumers about personal finance.
Consolidated Credit’s unbiased debt-counselling service offers alternatives to help people get their debts under control. Alongside assisting with consolidating payments, Consolidated Credit experts focus on education and understanding. Strategies include teaching basic but vital concepts such as how to budget, understanding credit and how to manage money.
Consolidated Credit also offers a free web-based budget and debt analysis tool and a plethora of website resources for people interested in learning more about debt and credit on their own, including tips on smart spending, buying a car, taking out a student loan and a survival guide for holiday spending. Its online learning centre offers free personal finance education booklets, financial calculators, resources, tips and suggestions. Make sure to download our free iPhone and iPod Budget Tool application which can be used to manage expenses on-the-go.
For more information or inquiries about our debt management plans, visit www.consolidatedcredit.ca or call toll-free at 1.800.656.4079.