For Canadian parents who’ve decided to open a Registered Education Savings Plan (RESP) for their child, first off, they are headed in the right direction. This savings plan allows families to put money aside for their children’s post-secondary education, with the Government of Canada offering two federal education savings incentives that help supplement RESP accounts.
According to Children’s Education Funds Inc. (CEFI), a leading provider of RESPs, with a sound plan and a commitment to saving for a child’s higher education, families can be more financially prepared for the future.
While setting aside money is a good first step, making regular contributions to your RESP to ensure you’re getting the most out of the government incentives is even more important. Here are 3 ideas on how to improve your cash flow so you can have extra money to contribute to your child’s RESP.
Pay Yourself First
The easiest way to save is by paying yourself first. Instead of waiting until the end of the month to use whatever money is leftover in your bank account, treat savings as a top priority at the beginning of each month. Determine how much money you’d like to contribute to your child’s RESP, and other savings goals, and work your way backward. You could even have the bank automatically deposit a set amount of money from each paycheck to your savings account.
Teach Your Kids About Money
Teaching your kids about money early in life will establish healthy financial habits that will last throughout their adulthood. Why not introduce your kids to saving by encouraging them to contribute to their RESP? As soon as they begin kindergarten, explain to them that you are saving for their education in the future at a “bigger school.” Establish a chore chart that will allow your child to earn a weekly allowance, and then suggest they save a small amount in their RESP. As they get older and can work a summer job, encourage them to increase the amount.
Earn Money on the Side
The internet can be a useful tool to earn some extra money. Additionally, side jobs and earning extra income in your spare time are easier than ever thanks to the sharing economy. You could use your writing talents to start a blog and get advertisers to sponsor it, or you could become a driver for a ride-sharing service. If you have been meaning to declutter your home, why not hold a garage sale or sell your items on eBay and invest the profits into your child’s RESP?
Whichever method you choose, the RESP is a very useful tool for saving for your child’s education since you can boost your savings with the Canada Education Savings Grant.
Lastly, don’t forget to ask your child’s relatives to contribute money to their RESPs on special occasions like birthdays and holidays. All of these saving strategies will pay off in the long run!