Educating Your Child


Summer is almost over. Labour Day weekend is almost upon us and after that, school starts. The lazy, hazy days are over for another year.

 As our thoughts return to the education of our children, panic may set in. The costs of post secondary education have been rising and we don't want our children to start off their professional lives, drowning in debt! So what can a parent do?

 RESP's - Registered Education Savings Plan - are the first thought. Especially since the government will contribute 20 cents for every dollar you put in, up to $500 on an annual contribution of $2,500. Although there are no limits to yearly contributions, there is a lifetime maximum of $50,000.

 Now, if you are a low-income family, there is more help from the government. You can apply for the Additional Canada Education Savings Grant (A-CESG). This money is added to the RESP to help reach the maximum contribution amount. And it can be used if the child wants to go to university, college, trade school or an apprenticeship program.


There are other ways to save for your child's future education as well. Once the child is old enough to work, have them get a part time job and put a portion of what they earn into educational savings. If your child receives money as a gift, have some of that go into the education fund.

 Try to start this fund early so that it has years to grow. The government allows you to contribute up to the end of the calendar year when the child turns 17.

 But what if the child doesn't pursue post secondary education? Not all is lost. If you have received a CESG grant, you may be able to use that for another child. If not, the grant will have to be paid back. However, the money you put in will be returned to you and not taxed - the interest will be.

 RESP contributions are NOT a taxable deduction but the money grows tax free. When the student takes it out for their education, then it is taxed.






There are other ways to save as well. Use the funds in a tax free savings account - TFSA - or open a non-registered account. The problem with using a non-registered account, according to a March 27, 2013 article in The Globe and Mail, is first the temptation to use those funds for something else besides your child's education and the fact that parents will be taxed on all income and any capital gains.

 Education is expensive and I realize that many parents are struggling to simply provide the basics. Some of you may be thinking that you don't have any extra money to put aside for your child's education. You have too many bills to pay and you are drowning in debt. Maybe I can help with you that.




If you feel that you are ready to gain control of your debt, then stop trying to figure it all out on your own and make sure you don’t go another year without gaining control —click here
 
I might be able to help you by supporting you through the 5-Step Financial Stability program that I have used to get control of my financial situation. click here

To your success, 

Karen Magill 

P.S. It is NOT right for everyone – but if you feel having me working with you almost “daily” & giving you a proven step by step system to follow will help you get your  finances and life back on track then for more details. - click here 

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