By 2030, the cost of a four-year university degree in Canada is projected to be around $112,000 including residence and $55,000 without.
Those are staggering numbers for parents to absorb — particularly as Canadians come to grips with the economic fallout from U.S. President Donald Trump’s tariff turmoil.
Despite financial worries, however, education is one of the most valuable gifts parents can give their children leading to higher earnings and an improved quality of life.
The trick, is paying for it. Here are six tips to help make it happen.
Open the right account so you don’t leave money on the table
Research shows that simply opening a Registered Education Savings Plan (RESP) for a child’s education, and guiding them towards that goal, significantly increases the likelihood of the child going into post-secondary schooling — no matter if there’s enough cash to cover the whole cost.
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An RESP offers parents huge benefits in saving for a child’s education.
Federally, there is up to $7,200 of free money available through the Canada Education Savings Grant (a maximum of $500 per year or 20 per cent of the contribution).
Lower income households could also receive an additional $2,000 through the Canada Learning Bond (CLB).
The lifetime contribution limit for an RESP is $50,000, and the money grows tax free until withdrawal — when it is taxed in the student’s name when they go to school, often at a super low rate.
Sadly, only about half of Canadian parents are contributing to an RESP plan for their children, according to surveys by Ipsos and another by Angus Reid for Canada Life, which means millions of grant dollars are being left on the table.
I love free money, and have prioritized my kids’ RESP contributions to capitalize on the grants, and the compound interest and reinvested returns over time.
Consistent weekly or monthly contributions into a well invested RESP, even during market roller coaster times, is called dollar-cost averaging which smooths out the cost of the investments over time.
Chop down your costs for essentials to fund your RESP
When shopping for anything — groceries, cleaning supplies, diapers, clothing — avoid brand names and reach for generic Canadian alternatives, then funnel those savings into your RESP.
Become that shopper who uses coupons, compares prices and scours flyers before buying. And use a list to avoid impulse buys and duplicates.
Many Canadians are also flocking to second-hand markets to save big and keep their money in country.
Consolidate credit card balances, and use the savings for RESP contributions
Most Canadian families carry an average of $4,000 in credit card debt, and another $15,000 to $20,000 in other personal debts.
This means that for most, $1,000 to $2,000 a year is going towards interest payments.
Simply switching balances to a low rate line of credit or consolidation loan will save you hundreds — if not thousands — in interest, which could go toward a child’s RESP.
This strategy also helps parents pay off debt faster.
The key with consolidation, however, is to not pile on more debt while paying off the existing balance.
Reimagine your activity fees
We’ve all just finished summer camp registration and are financially and emotionally drained.
Now is the time to temper future registrations.
Perhaps ask your child to pick just one or two extracurricular activities instead of five?
Or narrow the selections to lower-cost activities, community rec centre variety sports (cheap and cheerful) versus horseback riding (costly).
Investigate public programs run by the city, community associations, libraries, churches or schools.
These programs tend to be hundreds of dollars cheaper than private programs with children often having an equally great experience.
The savings? You’ve got it — directly into their RESP.
Make education savings a family affair
There are only so many toys and trips that kids need and appreciate.
Could you allocate some of your travel funds to their RESP? Or ask extended family to make RESP contributions as a part of their giving instead of more toys?
Redirect a portion of their allowance toward a monthly RESP contribution. If they’re earning money through a part-time job or side-hustle, encourage them to contribute; a friendly reminder that when they do, the government gives that money a 20% ‘bump’ through the CESG grant. This can be an incredible financial teaching moment.
Comb through your family budget for RESP savings
Subscriptions, memberships, insurance costs and more.
Are there costs that have ballooned over the past few years that you haven’t really noticed?
Look at all your family expenses to see if any other savings can be made.
Reducing your take out to once a month versus once a week would be a quick way to drum up an easy $100 for an RESP contribution.
Finally, if your teen is heading to school soon and you know you’re coming up short, help them apply for scholarships and bursaries.
Most universities in Canada have an online listing of all financial help available to students.
Scholarship season is kicking off in the next few weeks, and millions of dollars are given away to Canadian students annually.
Why not be one of them?
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