Knowing the financial mess one can end up in from not having a savings plan for post secondary education first hand, hubby and I opened a RESP for our daughter when she was five weeks old. I remember the representative going through the projected education costs for when she’s ready to graduate and was blown away. How can universities justify such an insane inflation?
This week a local news story came out about the rising costs of tuition in Canada. Tuition has increased 5% this year alone. Holy Cow.
At this rate, when baby girl is ready for post secondary, in 18 or so years (should she chose university/undergraduate degree), we’re looking at over $12,000/year. That’s assuming she lives at home and hasn’t factored in books or any other added expenses.
Hubby and I have every intention of continuing regular monthly contributions, plus additional savings when she receives money as gifts and such, but we have no intention of stretching ourselves thin financially for her educational savings. When the time comes and have have more money for saving (vs debt payoff) investing as much money as possible into our own retirement savings is more important than throwing additional money into her RESP.
In a perfect world she gets a part time job when she turns 16 and learns the importance of saving for things that she wants, education included, but despite the finical mess I’m in, I have no problems with student loans and (student) lines of credit. Very rarely in life does the opportunity to borrow at such low interest rates come up, and with proper money management and budgeting skills could be a smart move. I truly believe that if there is some financial responsibility in your education it encourages you to work harder. For this reason if our savings isn’t enough to cover her I’m not going to worry about it. By the time she goes off for school she’s guaranteed to have learned good money management skills-a promise I make for her-and can properly manage a little credit in her name. She will also have a clear understanding of the benefits of financial aid such as grants and scholarships. There is no shortage of award programs for upcoming college students, and she will eventually learn that they are all worth applying for. Take Benedictine University’s Student Success Award for example, it has the potential to award a student with up to $10,000. I’m not going to worry about her college funding once she understands that this is one of many incredible programs designed to reduce the financial burden associated with college as much as possible.
I have friends who insist on having enough savings for any and all education their child may pursue, even if they chose something like medicine or dentistry.
Just an FYI this year’s tuition costs for these programs:
Dentistry students paid the highest average undergraduate fees at $16,910. Medical students paid an average of $11,891 and pharmacy students paid $10,297.
Read it on Global News: Global Maritimes | Undergrad tuition up five per cent this year, more than triple inflation
At the 5% inflation we’re looking at almost $41,000/year for dentistry in 18 years…Just sayin’.
Maybe I’m a mean mom, or totally alone on this, but if we’re fortunate enough that our child can get through Medical or Dental school, I’m pretty sure they won’t have much problem paying off the degree, that’s for sure.
For those with children, who are saving for their post secondary education? Who is prepared to pay for 100% of it, regardless of academic pursuits?