Financial Planning for Your Child’s College Education

What is the average cost of university in Canada these days? About $ 28 000 for a Bachelor’s degree and $ 33 000 for a Master’s. Higher education comes at a higher and higher price as each year goes by.

It has become a costly endeavor for most students and their families. But thankfully, with good financial planning, most families can find a way to pay for some, if not all, of their children’s education.

Start Planning and Saving Early

It’ll be 17 or 18 years before your child goes to college or university. If you start planning to pay for it now, you’ll less likely need loans. If you save $ 100 per month for 17 years, at a conservative return of 5%, you’ll have just under $ 32 000 when your child turns 18.

Open an RESP

I wrote about the many benefits of a Registered Education Savings Plan here. An RESP also gives you access to the Canada Education Savings Grant and the Canada Learning Bond. i.e. free government money.

Invest in Your Child’s Obvious Talents

Colleges and universities in North America like well-rounded students with interests outside of the books. Plan to save for lessons to help your child become a better singer, musician, wrestler, runner, and so forth.

Invest in Entrance Exam Practice Courses

This may change, but as of today, many colleges and universities use standardized tests such as the SAT, LSAT or ACT entrance exams not only for accepting applications but also for assigning financial aid like scholarships.

If this is important to your school choices, pay for early test-taking training starting the summer before 9th grade or even in middle school.

Encourage Your Child to Contribute

When your child gets gifts of money or earns money, teach them to start saving for their long-term needs, wants, and desires by helping them put away at least 20 percent of anything they earn from day one.

Summer before 9th Grade Planning

When your child is getting ready to go into high school, it’s time to start the real realistic planning. At this time, you’ll have a clearer idea about the costs and the desires of your child regarding what they want to do when they grow up.

Final Word

While parents reasonably need to help their children with college/university expenses, the truth is, you should not set aside a single penny for your child’s education unless you can do so while still contributing fully to your retirement.

I’ve been blogging for almost 9 years now, and my view on this matter hasn’t changed.

Don’t feel guilty if you can’t save for your child’s university tuition fees. There are still several ways for your child to finance their education.

You, on the other hand, won’t be able to borrow for your retirement or to apply for a grant…

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