Registered Education Savings Plans (RESPs) - free money from the government!

Dawn Luhning |

Yes, I'm going to say it and I'm sorry! As summer draws to a close, and families with children get back into routines, it's time to start thinking about back to school for the kidlets! Shopping to do for school supplies (I always LOVED new books and pens!), new clothes but what about thinking a bit longer term? Do you have an RESP set up for your kids for their post-secondary education?

This investment account is often overlooked by parents but it's actually never too late to start. Talking to your advisor to determine the room each beneficiary has for contribution would be an excellent start! Each beneficiary has $2500 per year in contribution room per year of age. So a 10 year old would have $25000 in room which he/she could contribute and you would be able to contribute two $2500 contributions per year, which will allow you to take advantage of the missed grants. You can do the maximum contribution each year or start for as little as $50/month. It's up to you!

Then, the government provides a 20% grant on the contributions made to the account. Even if you invested your money into a money market fund, the 20% grant from the government would be a 20% return on your money. What an excellent way to save for one of the most expensive items for families. Tuition tends to be one of the most costly expenses year after year. Starting a plan early when the kids are young is key. Let the grandparents help you make those yearly contributions or even aunts and uncles that are close to you. Birthday gifts and Christmas gifts in the form of RESP contributions might mean more to your loved ones than the most popular gadget at the time. Each beneficiary needs to have a SIN# to open an RESP. 

If you haven't started an RESP, I can help you set one up. Book online with me here to get your children's savings growing!

~ Dawn