Even though we all know our children are growing up, there are still times I am unprepared for the milestones. My oldest daughter just received early acceptance at two Calgary universities. I am pleased but not quite ready for her to start in September.
It is wonderful that she decided to continue her studies beyond high school. She is an avid writer and will be pursuing an English degree, though she is still not quite sure what she wants for her career. She had thought about taking a year off to travel the world, but a couple of realties crept in. First, she realized her job did not pay enough to allow her to save for a trip around the world. And second, she didn’t have someone willing to travel with, and she is not yet ready to go by herself.
When I was growing up, my parents were very clear that they would help with the expenses if any of us decided to attend university. My husband and I made the same commitment to our kids to encourage them to extend their education.
A few years ago, we received an inheritance and decided to set aside some of the money for education. We put the money in a separate account so it was not mixed with other household funds. We decided not to invest in a Registered Education Savings Plan (RESP) for a couple of reasons. First, since my children were older, there was a limit to the Canada Education Savings Grants (CESGs) we would receive. Second, RESPs seem to come with a lot of fees attached. I have experience investing money, so I was confident I could choose the right account. Because not everyone has this background, my decision may not be right for everyone.
It will help that my daughter has decided to go to school close to home; not having to pay living expenses will help keep costs down. However, she still needs to think about her transportation options. We are already looking at the costs of a second vehicle and considering if she will be able to take public transit. Again, she is part of the cost discussion so she knows a second car is not free.
Although we expect our daughters to save for their education, we anticipate covering most of the costs of their first degree. My husband and I would like to see them finish without student loans, if possible. But I also realize we are fortunate to be in this position. Not everyone has the money to set aside.
If you are thinking of saving for post-secondary education, I would recommend starting before we did. You should not rely on temporary windfalls like inheritances. And if you start early and open an RESP, you can access more of the benefits of the Canada Education Savings Grant program. Like any investment, make sure you know what you are getting into before you sign up. And there are tax consequences if your child decides not to attend a post-secondary school.
The university acceptance letters came earlier than I thought, but fortunately we had done some planning to help with the costs of university. It's never too early to start your plan and budget.