Save now for your child's education
And that's why it is important to make sure you have a roadmap in place for funding your child's education.
If you're worried about how you will fund your child's post-secondary schooling, you're not alone.
According to a new report by BMO Bank of Montreal, two-thirds of Canadians share that same concern.
Besides tuition, there are other expenses to consider such as accommodations, food, books, transportation, and spending money.
So what should you do?
Robert Armstrong, Vice President, Managed Solutions and Registered Plans Strategy, BMO Investments Inc., offers this advice, "Graduation is the perfect time to think about how one will fund post-secondary education.
"With the costs of a four-year university degree rising rapidly, parents and grandparents can help by earmarking cash gifts for post-secondary education. A little goes a long way, with government grants and compounded earnings adding significantly to total savings."
The study revealed that 70 per cent of Canadians give their grandchildren, godchildren, nephews and nieces an average of $100 a year in monetary gifts for birthdays and other special occasions.
If two sets of grandparents each deposit $100 per year to their grandchild's Registered Education Savings Plan (RESP) from the time the baby is born, the RESP could be worth up to $8,000 by the time the child reaches 17 years of age, says Armstrong.
The government also offers a Canadian Education Savings Grant (CESG) of 20 per cent, up to a maximum of $500 annually, on all RESP contributions.
To get started, apply for a Social Insurance Number as soon as your baby is born and use it to open an RESP.
Planning now for the road to further education makes good sense.
By Donna Donaldson, MSN Money
Have you saved for your child's education? Have you considered an RESP or some other way of saving for post-secondary education?