Kids, Education and Saving for that Inevitable Cost

This is something we stress about often, mostly worrying that we aren’t doing enough. Imagining how much school will probably cost when our kids are grownup and ready for it, is a flipping scary thought. And yeah it’s not the funnest topic to chat about, money never is but when I talk to other people we know (in real life), a good handful have stressed so much about it that it’s frozen them from even starting. Okay, so obviously this isn’t a financial blog and I’m far from an expert on money, but this is a blog written by a frugal and organized mother. So if the thought of saving for your kiddos education makes you feel sweaty, frustrated and/or nervous at all maybe my “non-financial expert” totally layman’s advice will help wipe some of that sweat away.

Start as early as you can. The more years you have to invest/put money away for them, the better. Wait, you haven’t started yet? Hey it’s okay, go do it now and don’t feel bad about it either. Now is better then never. See I’m all about making you feel good for any decisions you need to make/feel bad making now and not earlier. *In Canada the government will match 20% on $2,500 contributed per child per year (Called the Canada Education Savings Grant), so earlier is better and something is way better than nothing.

You don’t need a big lump sum to start. In Canada an education savings plan is called an RESP, in the US it’s called a (insert name here) actually I think it’s called a 529 account? But since I’m Canadian and clearly no nothing about American banking, I’m gonna stick to Canadian terminology from here on out. When we first started King’s RESP I held off for a while, thinking I needed a lump sum to start. I don’t know why I thought that, but when I finally did go to start one (see I didn’t exactly take the “start as early as you can” advice) I learned it’s not the case. Twenty-five dollars is enough to start an RESP account, of course more is always better but starting with something is way better than nothing. There I go buttering you up, again.

Choose a manager. Maybe your bank, maybe a current manager you use for your personal investments or an online investment manager like Wealthsimple. Whatever you choose, make sure you check their rates, then decide which manager is best for you (and your $$). I just learned that Canadians pay the highest investor rates then any other developed country, over 2% per year in fees. For me this means I’m going to be checking our current managers rates and maybe possibly making a switch if it’s too —and the thought of having to do all that makes me sweaty, frustrated and stressed. *Wealthsimple recommends Canadians don’t pay anything above 1%, for a fee reference.

Set up automatic payments. I don’t know how it works at all banks, but you should be able to set up an automatic payment (or debt) to go directly into that RESP you created. And it doesn’t have to be for a very big amount, I think the lowest you can set it at is usually $25 (and that’s way better than $0). You you set it up to go in automatically each month, then you don’t have to think twice about it. And of course you can always add more when you want/have it. It’s the no brainer (lazy girls) way.

Dump the piggy bank in. Okay but don’t actually do that. I sorta think that piggy bank money is a great way to teach kids about money and how to save/spend it smartly, so dumping it into their RESP would probably be a hard and confusing concept to teach (since it’s hard and confusing enough for most adults to understand RESP’s). So what I actually meant, (but it just didn’t sound as catchy) was take any money the kids get as birthday or Christmas presents (maybe from generous grandparents) and put that into their RESP. What’s better then more toys, money for education! Now go play with your future money for education, kids.

And the kids drawing money? They are both really into lining “real life” things up and drawing them (food, toys, a deck of cards). I’d show you their finished product but I might get in trouble for posting counterfeit photos of money—they are just that awesome.

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