With the cost of higher education rising each year, many families are struggling to save enough to help their children get through school. Surveys show that the average family pays 30% of their children's college costs. With some programs today costing $14,000 a year and more, that can be a big part of your savings. How do you get ready?
Three steps to plan your education savings
- Set some realistic goals. For example, will you pay all of the cost, or will your children also help by getting jobs or taking out student loans?
- Calculate what you need to (or can) save each year. If you have a new baby, you may find you can pay their college tuition just by saving $20 a week until they turn 18.
- Choose your investment strategy. Depending on your situation, you may choose to be more aggressive in the early years. Then, as your child finishes high school, you may want to move your money into more conservative investments.
Need more help? We’ve developed some helpful tips to assist you with your planning. It’s important to plan a savings strategy just as you would plan to save for a home or for retirement. Learn more now.
Remember: Life, and your savings plan, may change over the years.
You’ll be more likely to save enough for your child’s education if you start with some clear goals. If you’re not sure how, a financial adviser can help you create a plan, and then adjust it as you save and invest over the years.
Use this education savings calculator to help you estimate how much money you will need to put into an RESP account each year to cover your child(ren)'s education costs.
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