The Razniks opened a Registered Education Savings Plan (RESP) when their son Serge was born last year. They will save $170 a month over the next 17 years. This is enough to get $400 in government grants each year.
How much will they have in the plan by the time their son goes to college? More than $70,000, if their money grows by 5% each year. That’s what the experts say it will cost to pay for Serge’s education by the time he finishes high school.
The DiMarcos, on the other hand, started late. They opened their RESP when their daughter Rosa turned 10 last year. To save enough for all of her education costs, they will have to save almost twice as much as the Razniks do each month.
Lesson learned: Starting early makes it much easier to grow your RESP savings.
Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca
Follow us on Twitter: