5 Easy Tips for Starting an RESP

Parenting Advice and Answers

SmartSAVER helped Jess to start her kids’ no-cost RESPs and to get the Canada Learning Bond for their post-secondary education.

Ask any child what they want to be when they grow up and you’ll likely hear a long list of possibilities that change from day to day: veterinarian, school teacher, mechanic, dancer, firefighter, doctor—even tattoo artist!

What can we as parents do to keep encouraging our kids’ future hopes when we’re already juggling so many demands on our time and money?

By following these five simple tips, you can start saving today for your child’s post-secondary education tomorrow.

1. Take advantage of no-fee RESPs.

The first step is to open a Registered Education Savings Plan (RESP) to hold education savings. This sounds scary to some parents who, like Jess—a single mother of three kids, ages 4, 6, and 8—believe that opening an RESP will cost money that they don’t have: “When you’re on one income, I think of savings as something that’s not for me”.

The reality is, however, that it’s easy to find RESPs that have no start-up or annual cost and that require no contribution from the family to open. You can ask your financial institution if they offer one, or use the free online application through non-profit program SmartSAVER, which provides a direct connection to six banks and credit unions that do. Once Jess learned this, she completely changed her mind about savings.

2. Save time by starting the RESP process online.

The Canadian government’s CanLearn website has all the basic information you need to know about RESPs. Two especially helpful PDFs are the RESP Checklist and Saving for Your Child’s Education.

Once you’re ready to open your RESP, one of the fastest options available is SmartSAVER’s quick-start application: it takes only about 10 minutes to fill in if you have your child’s Social Insurance Number on hand. The application is instantly sent to the financial institution of your choice who contacts you to finish the proecss of opening an individual RESP.

3. Be sure to apply for free money.

Once an RESP is opened, it’s ready to receive free money from the federal government available to all families. British Columbia, Quebec, and Saskatchewan also offer additional education savings grants for children living in those provinces.

These government funds are incentives to encourage parents and families to save for kids’ education.

Canada Learning Bonds (CLB)

When Jess opened RESPs for her three children, she applied for their Canada Learning Bonds (CLB). The CLB is truly free money: an initial deposit of $500 for each child with an additional $100 per year, per child, until they reach the age of 15 or to a maximum of $2,000 per child.

The CLB is available to any child born in 2004 or later whose family has ever received the National Child Benefit Supplement for lower-income families. The bond is contributed to an eligible child’s RESP, whether or not their family can contribute.

Canada Education Savings Grant

Regardless of income, every family can receive the Canada Education Savings Grant, a match on family contributions ranging from 20% to 40% on each dollar a family contributes: the lower a family’s income, the higher the match.

Grants for Residents of British Columbia, Saskatchewan, and Quebec

The new British Columbia Training and Education Savings Grant is a one-time grant of $1,200 per child also requiring no family contribution. The Quebec Education Savings Incentive and the Saskatchewan Advantage Grant for Education Savings are grants that provide additional matching funds.

4. Talk to your kids about saving for education.

When parents talk to their children about education options after high school, it helps build their expectation of going. And when kids know there’s money saved for their education, it strengthens their resolve even more.

When Jess’s son Aiden wouldn’t do his reading, she pulled out their RESP statement and explained how she was contributing to it: “I explained that training for a ‘fun job’ when he grows up costs money, and that learning to read is a big part of getting there.” To her delight, Aiden understood and finished his homework, knowing that it was important to his future plans.

5. Encourage a wide range of education options.

RESP funds are very flexible and can be used toward the cost of part-time or full-time post-secondary training at any accredited institutions across Canada and abroad. And if your child doesn’t want to continue studying right after high school, an RESP can stay open for up to 36 years, so they can pick up their studies later, when they’re ready.

With a no-cost RESP and free money from the government, every family can start saving for their kids’ education and help to make their dreams a reality, whatever they are. For more information on RESPs, visit Canlearn.ca. To start your RESP today, visit SmartSAVER.org.

May Wong is Executive Director of SmartSAVER, a non-profit program dedicated to helping families start saving for their kids’ education.

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