A Canadian Registered Education Savings Plan (RESP) is a powerful tool designed to help families save for their child’s future education after high school. It offers numerous advantages and benefits that make it an essential investment for parents. In this article, we will explore five compelling reasons why starting an RESP as soon as possible is a wise decision for any family concerned about their child’s educational journey.

1. Rising Costs of Higher Education:
   The cost of pursuing higher education is constantly on the rise. By starting an RESP early, you can proactively save money to ensure your child has the financial support they need when they are ready to pursue their studies. The earlier you begin, the more time your investment has to grow, providing you with a substantial fund by the time your child graduates from high school. By offering them the freedom to choose their desired university or program, you empower them to achieve their educational aspirations. Here are a few staggering figures to consider:

• By 2041, the projected cost of sending your child to a university program away from home may reach $180,000. [1]
• Tuition fees for Canadian undergraduate programs have increased by 2.6 percent to an average of $6,834 across the country for the 2022/2023 academic year. [2]
• In Canada, the average student loan debt for a bachelor’s degree is $28,000, while college graduates carry an average debt of $15,300. [3]

2. Government Grants:
   One of the most significant advantages of an RESP is the opportunity to collect grants from the government. Through the Canada Education Savings Grant (CESG), the federal government matches 20% of your contributions, up to an annual limit of $500 and a lifetime maximum of $7,200 per child. Additionally, there are provincial government grants available to further boost your savings. By taking advantage of these grant programs, you can maximize the growth of your RESP and provide your child with even greater financial support for their education.
3. Collective Contributions:
   An RESP allows not only parents but also grandparents, other relatives, and friends to contribute towards your child’s future. This flexibility ensures that various members of your family and close circle can actively participate in shaping your child’s educational journey. By pooling resources, you can create a substantial fund that will greatly alleviate the financial burden when the time comes for your child to pursue post-secondary education.
4. Increased Educational Opportunities:
   Statistics Canada reports that youth with access to an RESP are more likely to continue their education compared to those without one. This highlights the crucial role an RESP plays in providing children with the opportunity to pursue higher education. In today’s competitive job market, a post-secondary degree or specialized skills have become increasingly essential for success. By starting an RESP, you are empowering your child with the tools they need to thrive in an ever-evolving workforce.
5. Freedom from Debt:
   The rising cost of education often leaves parents contemplating between saving and borrowing. However, relying on loans can have long-term financial implications and burden your child with significant debt. By starting an RESP, you are taking proactive steps to avoid this burden. Through disciplined savings and government grants, you can ensure that your child’s educational journey is debt-free, allowing them to focus on their studies and future prospects without the financial strain.

Starting a Canadian RESP for your child is a wise decision with multiple benefits. By taking advantage of government grants, collective contributions, and early savings, you can provide your child with the financial support they need to pursue higher education without the burden of debt. With the rising costs of education and increasing competition in the job market, an RESP offers peace of mind and opens doors to brighter futures. Don’t wait—start an RESP today and invest in your child’s education.

SOURCES:
1 Projected tuition cost calculated using Statistics Canada 2022 and university websites. 2 Source: Statistics Canada September 2022, “Tuition fees for degree programs increase in 2022/2023.” 3 Source: Macleans.ca, “What to know about student debt,” August 2022. 4 Source: Statistics Canada study from July 2020, “Why are Lower-income Parents Less Likely to Open an RESP Account? The Roles of Literacy, Education and Wealth.”