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There’s more to college and university than classes. Navigating the costs that come with a post-secondary program is just as much a learning experience as Psych 101—for both students, and the adults in their lives. The best time to start—both saving for school, and learning how to handle money—is when kids are still young. That’s why our Student Money Guide begins with the basics: How to help kids understand the value of money; set them up with their first bank accounts; and all about registered education savings plans (RESPs).
When kids are grown and ready to live on their own, check out the sections on applying for student loans, scholarships and bursaries; covering tuition costs, handling housing expenses; and more.
What do you need help with today? Click on any topic in the list below to jump to the full information in this guide:
Regardless of whether your kids are fast approaching their post-secondary schooling or just graduating from kindergarten, the sooner you and your child start saving for education costs, the better. There are a few different strategies to help support your children financially, while they pursue their education. The most common saving tool for children is a Registered Education Savings Plan (RESP). This is a tax-deferred savings plan used to fund post-secondary education costs like tuition, books and other expenses for trade school, college or university.
You can also contribute to a tax-free savings account (TFSA) for a child or grandchild. TFSA withdrawals can be made at any time and used for education, a home down payment or for other purposes. If you’re an adult who has already maxed out your RESP, the TFSA allows you to save for the children in your life. Not only does the money inside a TFSA grow tax-free, but there’s no tax when you withdraw. However, there are annual limits.
To learn more about the best strategies to help kids financially—through TFSAs, real estate and life insurance— read more here .
Preparation and practice are the keys to mastering every skill—including money management. That’s why it’s important to start teaching your kids about money early on.
Age 0-6: At this age, they’ve probably started to take note of your spending habits, so take them through your weekly shopping routines; even if you’ve switched to getting your groceries online, talking through your decisions about what to buy and what constitutes a good price, or not, sets a positive example. Giving kids an allowance and letting them make money mistakes (and wins!) will help them to grasp the fundamentals. Activities like playing “store” can help children learn the money basics, too. For more information on helping small children learn about money, read the full article here.
Age 13-17: As teenagers start earning an income from part-time jobs, they learn about their wage versus their “take-home” pay. It’s also a good time to teach them about the value of saving up for a short-term goal, like a school trip or a car, or a long-term goal like saving to contribute to their post-secondary education. Important decisions, like whether they should have a credit card or clothing allowance, can pop up around this time too. For more on how to educate teens about money, click here to read the full article.
Age 18 and beyond: At this point, your kids are preparing to enter into the real world. Hopefully, they have a good grasp on the value of money and the know-how to responsibly manage a savings account. Now’s the time to talk to them about budgeting, education costs, student debt and more. Want to know how? Read the full article here.
Knowing the value of a dollar (and how much ramen it can buy) going into university helps set kids up for a better relationship with money. Getting kids started with their own real bank account helps foster that knowledge. Look for a kids’ bank account with low or no fees, since the last thing you want is for fees to eat up their smaller contributions. If you can find an account that helps them earn interest, even better. Read more about what to consider in a kids’ bank account here .
A Registered Education Savings Plan is an investment account geared towards saving for a child’s education. An RESP allows investments inside the account to grow tax-free, meaning that no money is owed to the government based on capital gains, interest nor dividend payments. A major benefit of this account: The government pays you to save by kicking in a grant of up to $7,200 over the life of the plan (and potentially more if your family has a low income). To learn more about RESPs, read the full article .
When it’s time to cover the costs of post-secondary tuition, housing and books, you’ll want to understand the steps involved in withdrawing from your family RESP. Regardless of who made the contributions—a parent, grandparent, other family member or family friend—the withdrawals are usually taxed on the student’s income. Typically, students’ income is usually much lower than the contributor’s, so the tax amount owed is generally very low or even $0. That’s the top-level strategy, but there are other tips to help you maximize your RESP savings and returns. For a financial planner’s tips on how to withdraw from this type of account, you can also read this article .
Parents know no two kids are the same. One kid may be headed off to culinary school, while another one pursues academia and the other goes to an arts college. Different educational paths come with different costs and different challenges. If you’re looking for advice on how to fund different types of schooling, read this article .
The cost of housing can be a big one (it can easily add up to a shocking $50,000 over the course of a four-year degree). However, there is a way to turn this financial burden into an opportunity, if you are in the fortunate position to have the financial means to do so: Buying a property in the vicinity of your kid’s chosen post-secondary institution, and becoming their landlord, can help you both save money (especially if your kid rents out rooms to their classmates). Read more about it in the full article.
There are many paths to funding your education aside, from a student’s own savings and their parents’ contributions. Get a list of the bursaries, scholarships, grants and provincial loans that may be available to you right here .
If you need to fund your post-secondary education but don’t have much in the way of savings, you can use student loans to fully or partially cover costs, depending on your approved amount. The Ontario Student Assistance Program (OSAP) works in conjunction with the federal loans and grants programs to make sure you can pursue the education you want, with a relatively low-interest loan after graduation day. For more details on how to apply for OSAP, check out the full article .
Even if you have scholarships, other funding or work during school, you may still have a tight budget throughout the academic year. These strategies can help you save money and take advantage of your student status, including making the most of student discounts and finding cheaper travel and textbook options. Read the entire article here .
If you’re looking to build your credit history while earning credits (see what we did here? #dadjokes), there’s a selection of no-fee cards with useful perks, like earning cash back on groceries or free tickets at the cinema, that can help make student life more fun. We’ve rounded up the credit cards best suited to students’ budgets and lifestyles here .
When budgets are tight, the last thing you want is to be hit with a $20 monthly fee (that’s two burritos!). These low and no-fee accounts are perfect for students, as they offer useful features like unlimited transactions and useful points on purchases of essentials like gas. Some even include sign-up promotions that offer cold, hard cash. Read the complete list of bank accounts—and their features— here .
Having the freedom to get to class, to your part-time jobs and your extracurriculars while at college is a huge advantage (and time-saver). We calculated the cost of owning a car while in school to see if it could be worth it for you, in this article .
Taking the first (exciting) steps toward building the financial foundation of your future—by working toward your degree and fostering a positive relationship with money—can be scary and exciting. We know this is a lot of information, so feel free to bookmark this page and come back to it.
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