RESPs: free money from government that half of Canadians don’t ask for
According to Statistics Canada, less than half of parents take advantage of free money from the government. Any Canadian can open a Registered Education Savings Plan (RESP) for their child. And the best part is that for every dollar you put into the plan, the government kicks in an extra 20 percent towards the cost of paying for education expenses. There are also additional programs for low-income families that receive government help. While there are rules regarding the government portion, you have options available to you if the child named in the RESP doesn’t attend university or college.
- Even if you don’t have money to put into it right now, open an RESP so you can add as little as $5-10 when you can.
- The government contributes through the Canada Education Savings Grant (CESG), which provides 20 cents for every dollar contributed, up to a maximum of $500. Depending on your income, the contribution may be even higher, and you may qualify for the Canada Learning Bond.
- The CESG allows families to carry forward unused contribution room, so you can catch up from the previous year’s contribution.
“Millions of Canadians struggle under the financial burden of parenthood…It’s hard enough to pay the bills, let alone save for the kids’ education. That’s why it’s so baffling that less than half of those eligible participate in a program offering parents free money for their kids post-secondary education.”