(TORONTO, ON) – Post-secondary tuition costs an arm and a leg, and it’s parents who are losing limbs.
A recent study released by The Canadian Alliance of Student Associations lays out the sacrifices Canadian families are making:
· 13.5% of household income is set aside for children’s post-secondary tuition (the same percentage is spent on food each year)
· 14% of parents have remortgaged their home to pay for their children’s education
· 33% have dipped into their retirement savings to support their kids’ schooling
Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, says this is contributing to the financial hardships faced by many families –
“Parents will do almost anything to support their children – even if it means sacrificing their own financial future” says Schwartz. “But, it’s important to avoid financing an educational goal on a foundation of debt.”
Although tuition payments grab the most headlines, there are loads of other costs that need to be factored into a post-secondary education. Residence fees, books, food and transportation are other expenses that can’t be avoided. A poll by CIBC found that kids don’t stop asking for money after their parents cut the tuition cheque
· 69% of parents help their kids with school or living expenses
· 47% of parents receive requests for more money from their children
· Parents send an average of $1,200 each semester to their children in college or university
Schwartz says all expenses need to be properly budgeted for to ensure the financial well-being of both parents and children –
“If you don’t know where your money is going, you’re on a road to financial trouble” advises Schwartz. “Keep track of your expenses so you know how much you can responsibly help your children.”
Consolidated Credit has compiled a few tips for parents who want to support their children’s education –
· Save early – Setting aside a little money each month from the time your child is born can lesson the burden on you as they reach university or college age.
· Utilize RESPs – The government encourages you to save through the use of RESPs which will give you a tax break on contributions. Take advantage of this option to help your money stretch further. Another incentive is that the government will give you an instant 20% return on the first $2,000 you contribute. That means you’ll get a free $400 after you save a couple of grand.
· Share the burden – Children are more than able to contribute to their own education costs. Holding a steady part-time job through high school or a summer job should help them save enough to cover a year’s tuition.
· Saving goals – Reaching a long-term goal is helped by achieving short-term goals along the way. Striving to save $5 a day, $100 a week or $500 a month will give you motivation to keep on track.
About Consolidated Credit Counseling Services of Canada, Inc.:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.
For more information or to request an interview with Jeffrey Schwartz, please contact:
Eric Spence, Public Relations Coordinator, Consolidated Credit Counseling Services of Canada, Inc., T: 416-915-7283 ext.1041, C: 416-731-5588, F: 416-915-5200, E: [email protected]