What is an RESP?
It is debatable how much benefit your child will get from a post secondary education. It used to be common knowledge that going to university or a trade school would give you a good start on a career, but things may have changed a bit in 2016 depending on where you live in Canada.
I think everyone has heard a story or two about someone’s son or daughter that graduated from university and can’t find a job in their chosen field. Maybe it was just a bad choice on their part when they decided to take some sort of arts degree that has very little demand in the real world, but I know of one young man that graduated with a bachelors in science with a major in environmental and even he can’t find a job. One would think with all we hear in the media about how important the environment and climate change are, that there would be lots of environmental jobs. That is not so.
Even some people that went to a trade school are having problems and it is not just in Alberta where the oil price collapse has caused mass layoffs in the oilsands. There are unemployed welders, plumbers, carpenters, and electricians in all parts of Canada. However, I would argue that your chances of finding employment are better in the trades than in some of the more general university degrees.
Having said all that, everything is cyclical and if you have young children right now you would be wise to start saving for their education. By the time they are ready to go to a technical institute or university, there may be a real demand for their chosen profession. This is around a 15 to 18 year process so you should start right away when the child is born.
There are some great government of Canada programs to help you save and you could get up to $7200 in free money. That’s right you can get free money from the government through an RESP to help pay for your child’s education. That makes saving for their education a bit of a no brainer. Of course you have to make a contributions as well, so you have to have some money in the game as well. The government will not just give you the $7200 without you contributing any money. However, if you can be disciplined and contribute a certain amount every month, you will get matching contributions from the government of Canada.
So, don’t delay and start the process right now. Here is a very informative video that explains the entire process and how to get started.