Did you know that if you have a 3 year old in 180 months they could be going off to college?
The average tuition for college or university in Ontario is 2018 varies between $6,000 ad $7,000 a year! And that doesn’t include room or board. (https://www150.statcan.gc.ca/n1/daily-quotidien/170906/t003b-eng.htm)
Macleans Magazine did an awesome post that says the average cost of school is almost $20,000 per year when you factor in travel, groceries etc. https://www.macleans.ca/education/the-cost-of-a-canadian-university-education-in-six-charts/
Let me ask you what do believe the cost of tuition will be in 2033 when your child has to go to school? How much do you need to have saved? How much have you saved for school right now?
The answer is a lot higher.
And yes, I know the Ontario government is offering free tuition yet not everyone qualifies or gets all the amount paid for.
The point I want you to understand is the need to prepare. You need to prepare in every aspect so that your child doesn’t get a mountain of student debt.
So how do you do that? How do you know?
Determine how much of your kids education you want to pay for? Do you want to pay for all of it? All including room and board? All four years plus grad school?
Once you have that number how much do you have saved up currently for your kids education?
Now you will need some calculators that can help you. Industrial Alliance has a simple calculator to help you, working with a financial planner can you you even more so. (https://ia.ca/resp?Calculateur=true)
Choose one or multiple tools to help you get there. The RESP in Canada is only one option. Insurance is another option, and regular savings are another. By working with a financial planner we can help you pick the best tool or tools from the toolbox to help you achieve your goal.
Tuition rates are not going down, in the above example we have not even factored in inflation.
The main point I want you to get is to prepare.
The more prepared you are, the less debt your child will have to incur, the less you will have to dip into your home equity line of credit or your own savings. You need better planning and preparation to help you reach the goal.
I want you to be prepared and aware of the costs of education and work your way towards it.
I want you to be prepared in all aspects of your life. Tax, estate, risk, insurance, investments and debt/cash flow.
So get better prepared. Use the calculator above or reach out to me and get started towards helping your child with his or her future.