Wednesday, October 1, 2014

Our RESP with RBC

Classic TV scenario: a set of new fathers gaze into the hospital nursery, one of them is a new parent to a set of multiples and his head is spinning. He talks about all the crazy things he will have to pay for twice and then, dun dun dun.... He realizes he will have to send them both to university. I know this idea is massively daunting to all of us, no matter how many children we have it is a big financial burden looming in our future.
Now realistically we all know that the financial realities of our generation are shaky to say the least and the majority of us are still struggling with our own student loans and it seems backward to think about saving for their school when we have yet to pay off out own. However one thing we learned about RBC RESPs is that it doesn't have to be a regular contribution. This leaves us the ability to use our weekly income to work on our own loans, but place windfalls and gifts into their account. So it is a slow process, but hopefully sometime in the next 15 years we can upgrade our contribution to the recommended regular contribution of $25 a week. Also starting early allows the government contributions to start adding up. The government will contribute up to 20% of our annual investment up to a $500 yearly. So if we waited until she was 10 we could be missing out on a potential $4000!
When I look around at the school debt of my peers it makes me very frustrated. For a great many of us, school debt it very much an albatross around the neck. It is keeping many people from achieving their goals. My peers are crippled by huge monthly payments on student debt, using up their resources which could be used for better things. Home ownership, becoming debt free, sometimes even car ownership are prevented just by these massive debts. If there is a way to save my children from this situation I am going to try my best to do it. 
However, lately it seems that a University education is not necessarily the surest bet. RBC RESPs are flexible enough to allow for this. They can be used for pretty much any kind of secondary education : College, University or Apprenticeship program. Suppose your children choose to opt out of schooling? There is even a contingency for that, your money can be rolled forward into an RRSP for yourself.
So, why did we set up an RESP with RBC for our kids? Because we need to take care of them financially. Because I care about their finanical future and want to save them from as much burden as possible. At this point it may be just drops in the bucket, but hopefully slowly but surely it will trickle in to fill that bucket up.

“Disclosure: I am part of the RBC RESP blogger program with Mom Central Canada and I receive special perks as part of my affiliation with this group. The opinions on this blog are my own.”

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