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March 28, 2021

Funding post-secondary education

298822_6140There's much to be said about a good education.

But if you're late getting out of the gate, how do you plan on funding your child's post-secondary education?

Graduating high school students, like my daughter in Grade 12, are just now starting to get their acceptance letters to colleges and universities. And, according to a new report by BMO Wealth Institute, a four-year university degree can cost upwards of $60,000 and yet three-quarters of Canadian parents are not prepared and only half have taken advantage of Registered Education Savings Plans (RESPs).

The report also reveals that 70 per cent of parents recommend saving for their children's education starting from birth in order to meet their education savings goals. However, only half have actually set up an RESP and only 20 per cent are taking advantage of the available government grants.

The report, which examines the cost of post-secondary education and the mistakes parents make when saving for their children's education, also outlines five other options available for saving for your child's post-secondary education. These options include a non-registered account earmarked for education; a Tax-Free Savings Account (TFSA); a Trust Fund; Corporate Dividends; and Life Insurance.

Chris Buttigieg, Senior Manager, Wealth Planning Strategy, BMO Financial Group says it's important to research all the options available to save for your child's education.

"You will likely need more money than you anticipate. Consider one option, or a combination of options, that suit your situation to make the most of your money," he says. "Proper planning will make it easier to save and also set your children on a path to future financial success."

The road to higher education is indeed steep.

By Donna Donaldson, MSN Money

Do you feel you are financially prepared for your child's post-secondary education?




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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

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The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...