As you may or may not have noticed, I updated the chart for one of our 2012 Financial Goals. We met with our financial advisor last week and put $1000 into an RESP for our son.
I’ve shared how we save up our son’s money and the $1000 that we put in came entirely from money that he received as gifts when he was born and money that we’ve received from the government for bringing him into existence. We have set up an automatic withdrawal for $100 each month that will be funded by some of this government money. Each month, we receive about $140 from the government so the other $40 will go towards his needs along with the $20 a month that we put into his budget category. We will have to start putting more money into this category soon as we will have to pay for childcare once I go back to work in a couple of months.
By the year’s end, with the $100/month contributions (beginning April 1), we will have contributed $1900- just short of our $2500 goal. There is a good chance that my son will receive some money for his birthday in which case that will be thrown in towards the $600 we have to make up. Beyond that, he will just have to hope that we do well on our other goals as they have first priority before funding the extra $600 in the RESP account.
I actually have no desire to fully fund any of my kids’ post secondary education. I do wish to help them out- I realize that the cost of education has become prohibitively expensive for many and I don’t want my kids to feel that they have no options but at the same time, I want my kids to learn to create their own options. We will have to see how this plays out when the time comes.. Maybe we will pay for their first year of education. Maybe we will pay tuition and have them cover their other expenses or vice versa. Honestly though, even if I win the lottery, I won’t be paying their way- it is important to me that my kids become self sufficient and if they aren’t already on their way there by college/university, they’ll get an important, lesson-learning shock.
It was important to me to choose a family plan when we opened our RESP. I don’t want my kids to feel pressured to attend college or university so being able to move the money around between different children is important to me. That may sound funny but I found myself in a situation where I had a small sum of RESP money hanging over my head and it has completely stifled any desire to put it to use. I absolutely freeze when I think about it and it has just become something very awkward to think about for myself. Maybe I’ll talk more about that at some point. That story isn’t finished yet so we’ll see…
Our RESP is currently sitting in the Industrial Alliance Focus Balanced Fund under the advisement of our advisor. I’m looking forward to seeing how this does and anxious to get our government grants! How do you get the most out of your RESP dollars? Are you planning to pay for your kids education entirely or will you be expecting them to contribute as well? Did I go the right route with the family plan or should I have done something else? I’d love to hear your thoughts and suggestions as this is new territory for me!!