Knowing what to do with your money can be really difficult. The words and terms they use at banks don’t make it much easier: how are you supposed to understand all these abbreviations and acronyms? Dealing with all this by yourself can be frustrating and at times completely overwhelming. That’s why this post is going to help you find the middle ground by teaching you the terminology you need to know and helping you manage your money, so that everybody can win at the end of the day.
If you’re looking at this and going: “What even is a RESP?”, it’s ok, we’re here to help! A RESP is a Registered Education Saving Plan account. How is this different to any other savings account you ask? A RESP account is used to save up for a child, or other beneficiary’s post-high school education like college or university. Parents, grandparents, friends and all kinds of family can contribute to the account, which can be opened at birth if necessary! Everyone knows that the cost of tertiary education has risen immensely, and so has the workforce’s expectations. Nowadays, a basic certification or degree will barely get you through the door while specialization is now all the rage.
And specialization costs a lot of money.
With a RESP account, any money you put into the account grows tax-free until the time has come for your child to head to university or college. That’s only one of the few benefits you could get from a RESP account. With it you can apply to get Government grants like the Canada Education Savings Grant (CESG) or even a tax free savings account. This can go a long way when it comes to tertiary studies, and could take your child or loved one all the way to their Master’s degree if they wanted to!
And don’t go worrying that your child will be drowning in debt when they finish college. With a RESP account, the money will be taxed when your child is already studying or working- and in incredibly small amounts at that! At a time when student loans can cause tons of stress with their increasing pay back fees, a RESP account will lead to the greatest benefit there is: Serenity.
With this account, you don’t have to be a millionaire to give your child the best. By the time your child finishes high school there will be no late nights sitting with a calculator, wondering if you can go another year without getting that leak fixed. Instead, you will be able to enjoy every result, every graduation and every smile without ever having to panic about where the money would have to come from. It’s also an amazing way for grandparents to contribute, allowing them to help out without making them break the bank every birthday.