Saving for your child’s post-secondary education can be tough—even during the best of times. With the added weight of COVID-19, continuing to grow your RESP investment may be feeling uncomfortably tight.
This year has changed life as we know it, forced us to adapt to a new normal, and has been a stark reminder of just how unpredictable the future is. It has also been a reminder of the importance of saving, especially when it comes to the most important investment you can make - your child’s education. Remember that your RESP is designed for slower, longer-term growth, and is a commitment that will pay off!
With many uncertainties ahead that are beyond anyone’s control, one thing you can control is the decision to continue that investment for your child’s future.
The value that education brings is inarguable. No matter how the world around us changes, education provides lifelong social skills such as teamwork and empathy, and helps to prepare children for greater success in life. Education Indicators from the OECD in 2019 showed that Canadian adults with post-secondary educations have the highest employment rate at 83%.
Saving for an unclear future
Uncertainty is stressful, but reminds us of the importance of being prepared. Based on the latest statistics, Knowledge First Financial projects the cost of a four-year program for a child born in 2020 will be $120,425 with residence, or $63,295 without residence (Tuition, Living and Accommodation Costs, Statistics Canada Sept 2019). You’ve already made the proactive decision to start saving and now, more than ever, it’s important to keep saving, and stay invested in the future. While there may be anxieties about saving for an education experience that could look different than what you expected or hoped for, education still remains one of the most powerful tools you can equip your child with.
Keeping up with fluctuating costs
The national average of tuition in 2019/2020 has decreased by 5.3% from the previous year. Part of the global impact of COVID-19 includes funding challenges for post-secondary schools, paralleled by rising costs of institutions offering students financial relief, and investing in online education. This includes putting resources like (typically expensive) textbooks online for free. Universities in Alberta are planning to eliminate residence altogether while affected by the pandemic.
When you can’t predict, prepare
With post-secondary schools across the country preparing for various scenarios as the new school year approaches, keep your child’s education savings growing strong. Along with following the latest government guidelines on keeping you and your family safe during times of crisis, continuing your RESP investment is one of the best things you can do for your child.