When we first brought our daughter home from the hospital only 24 hours since she was born, I was worried about so many things.
Was she latching correctly?
Why couldn’t I get her to burp?
How often should I change her diaper?
Was it warm enough in her room?
Did I swaddle her correctly?
What if I dropped her?
How often should I feed her?
And, more importantly, WOULD SHE EVER LET ME SLEEP??!
By about the 72-hour mark, when I simply could not keep my eyes open for another second, I turned to my husband to tell him he was on Daddy Duty for the next few hours while I tried to catch some Zs, and I noticed his spot on the couch was empty.
Assuming he had crawled into bed, I cradled our colicky infant in my arms and marched to our bedroom to give him a piece of my mind.
(If anyone should be sleeping, it should be me, right??!)
But while I was storming down our hallway, I noticed the light in our den was on, and when I pushed the door open, my husband beckoned me over to show me a model he’d been building in Excel.
Now, one thing you must know about my husband is that he’s a bit of a finance geek.
And when I say he’s “a bit of a finance geek”, I mean he’s a full-on nerd. But that’s okay! He’s the nicest, most good-looking nerd I’ve ever met in my life, and he loves me like crazy, so it’s all good.
Anyway, when I looked closer at the computer screen, I saw he had built a financial model outlining what he felt we would need to cover our daughter’s university education, and he could barely contain his excitement as he walked me through how we could maximize her RESP by compounding interest and The Canada Education Savings Grant.
I remember looking at him in complete shock.
The kid wasn’t even a week old and he was already boring me with financial models and government grants??!
But when I was asked to participate in the RBC RESP blogger program, I suddenly cared about what he had to say in relation to planning for our daughter’s education, and my interest excited him so much, he actually agreed to help me with this blog post by sharing his top 9 reasons why YOU should be starting an RESP for your kids RIGHT NOW.
I tried to dumb down his thoughts as much as I could, but if anything is unclear, please leave your questions in the comments section below and I’ll make sure he answers them for you!
1. The cost of education has been exceeding inflation year over year, and one can expect this trend to continue, which means educations costs will go nowhere but (you guessed it!) up.
2. Investing in an RESP sooner than later allows you to benefit from compounding interest on a tax-deferred basis.
3. When the money is taken out of your child’s RESP plan, the amount that was compounded through investment returns will be taxed at the hands of the child (translation: it will be taxed at a lower tax bracket).
4. The Canada Education Savings Grant will match up to 20% on the first $2,500 contributed annually, which could mean up to an additional $500 a year in your RESP, up to a lifetime maximum of $7,200. Why WOULDN’T you take advantage of that??!
5. The earlier you start contributing, the more you will benefit from compounded interest, and the less daunting it will be to pay off the costs of your children’s education.
6. Starting an RESP is something the whole family can get behind. For example, my husband always asks grandparents, aunts, uncles, etc. to make contributions in lieu of birthday and Christmas presents for our daughter. I find this boring and sad, but his side of the family thinks it’s great!
7. With advice from RBC, it’s easy to start an RESP. There’s no need to feel overwhelmed, and you will have the flexibility to use the RESP for university, college, apprenticeship, non-credit courses etc. Oh, and if your child decides she doesn’t want to go to university (which will not happen with our daughter, by the way…), you can use your contributions and earnings to fund your own RRSP!
8. If you setup a plan now, you will alleviate your children from the stresses of trying to pay back a student loan after graduation.
9. Setting up an RESP gives you an opportunity to teach your kids the importance of saving, investing, and getting the proper financial advice from professionals like those at RBC.
Wow, that was a lot of technical jargon, but I think he did a pretty good job of explaining the importance of saving for your kids’ education NOW instead of LATER.
And guess what?!
RBC is offering 4 prizes of $500 towards an RESP to help you get a head start in saving for your child’s dreams right now. All you need to do is click THIS LINK and enter for your chance to win.
And if you tune in to the #RESPwithRBC Twitter party on October 1, 2014 at 9 pm EST, you can get real-time advice on saving for your kids’ education, and you’ll also have a chance to wine one of 6 $100 gift cards!
Oh! And if you would like more great tips on saving for your child’s education, you can find them RIGHT HERE.
Pretty cool, right?
Good luck and see you on Twitter on October 1, 2014 at 9 pm EST!
Disclosure: I am part of the RBC RESP blogger program with Mom Central Canada and I receive special perks as part of my affiliation with this group. The opinions on this blog are my own.