Investing in your child's education after high school

[Medic]

So for the longest time I've been debating whether or not to put money aside for my sons education. At first it seemed like a no brainer and I actually had a lot if money saved up but then due to daycare I lost it all. Now I've been thinking if I should or shouldn't, I'm worried that he won't go to college or university and then I don't know what to do with the money, because it would be in an RESP

For those who don't know RESP is Registered Educational Savings Plan offered by the government and it's money you can put aside for your child and the government even contributes a percent to it. But I'm wondering how it works for like apprenticeships etc.

I also think he should learn that there's things in life that you need to save up for. My friend wants to be something like a vet and she refuses to go to school for it until she has the money all saved up so she's been working for years. Which I think is a great idea!

Any opinion is greatly appreciated I know this seems like a no brainer but I'm still on the fence because money is tight. Right now all I have for his college is a small bank account that whenever I sell any of his stuff (clothes, toys, etc) I put the money I made from that in the account.


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[Medic]

Yeah that's true. I just like how with the RESP they give you extra money. I'll try and find a banker that can explain RESPs to me better.
I know with our student loans we don't even have to pay back them entirely like say we get a 15 000 loan I think you only need to pay back like 13000. Why are banks so damn complicated. -.-


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[fossilfinger]

My dad paid for my college fully and he spent over $100k on it and it was pretty much a total waste of money for him and a waste of time/a completely miserable time for me. I should not have gone to college. My parents said it was my only option.

If I have a kid I will probably save up for a couple years of community college. I would encourage my kid to take off at least a year after high school to decide what they actually want to do. A college degree is almost worthless nowadays and will be even more worthless in a decade.

I know this sounds pessimistic, but I truly believe most people should not go to college. If someone absolutely knows they want to be a doctor or a lawyer or some other profession that requires a degree, fine, but they better really be sure.

[thegooseiscooked]

I think your idea of putting away any money you make on selling his clothes and toys is a great one. Over the course of 15 odd years, that will build up into a sizeable amount. Even if it's only $20 here and there. Put it into one of those accounts you mentioned and make the most of the government contributions.

Other than that, I'm not a big one for college funds but I'm in a different position. Parents don't pay for university here, the student goes for pretty much free up front and then starts paying the debt off once they start working through taxes.

Even if your son doesnt end up going to college or university, you could surprise him with the money when he needs it. For example, if he wants to start his own business or buy into one, if he gets engaged and wants to buy a house etc or give it to him as a wedding present. I know it's funny thinking about those events so far in the future but it's never too early to start saving.

[thegooseiscooked]

Oh sorry, just noticed the thing about RESP. There must be a helpline or website where you can find out what happens to the money if your son doesn't want to use it for college. Otherwise, you could talk to your bank about a long term, high interest bearing account.

[Shameless]

I think you should definitely save for your child's college or higher education, whatever they decide to do. Maybe for now you could just keep it in a regular savings account and see how he feels about it when he gets to starting high school and then flip it over to a RESP if he thinks he wants to go.

If he does end up going to college for something, I don't think you should just pay for his classes right away. Make him get a summer job and pay for it himself up front. Then if he achieves over an agreed grade then you reimburse him with the money you have saved.

You have to be really careful, because although it's great to provide things for your child, just giving it to them can make them not really appreciate the true value of what they have.

[Kayliecoburn]

We started to save when my first was a year old. I was so excited about it and so sure that this is what I NEEDED to do. Then I accidentally got pregnant with my second and that plan went to shit. We struggle as it is and had to stop putting money into the account. Even if we could save some, it wouldn't be much...then between two kids it would be even less. With the rising cost of college, by the time my kids are 18...there is no way we could have paid for it outright anyway unless we were rich. At this point, I know that it is up to my children. I hope that by knowing there is only enough for us to pay for books for 4 years that my children will work hard in school for scholarships. If they have to take student loans, I will help them out with it when the time comes.

On the bright side, I know a ton of people who didn't have their college outright paid for. In fact, most of my peers in high school didn't have a savings account. My own sister in laws included. They still managed to go to college (via scholarships and loans) and get good jobs when the time came.

[Kayliecoburn]

My dad paid for my college fully and he spent over $100k on it and it was pretty much a total waste of money for him and a waste of time/a completely miserable time for me. I should not have gone to college. My parents said it was my only option.

If I have a kid I will probably save up for a couple years of community college. I would encourage my kid to take off at least a year after high school to decide what they actually want to do. A college degree is almost worthless nowadays and will be even more worthless in a decade.

I know this sounds pessimistic, but I truly believe most people should not go to college. If someone absolutely knows they want to be a doctor or a lawyer or some other profession that requires a degree, fine, but they better really be sure.

where do you live? in america, you NEED a degree to be able to advance in any job, essentially. unless you're starting low, which you will, and working your way up over years. even if you just have a degree in SOMETHING, it will help you get a job in a better paying position than you would have without it. not to mention, it makes you much more of a contributing member to society. knowledge is power, my friend.

That is total BS. I have a degree in marketing that hasn't done shit for me and I'm struggling to even get a retail job. My husband has a degree from a top 10 university in political science (stupid choice...but he was delusional) and all that has gotten him is an office job with lower middle class pay...with some coworkers that have no degree.

His parents paid 100k for his education. Down the shitter, if you ask me.

[FLOSSY77]

You don't need a degree to be successful. We have funds for the kids. But what happens depends on who they are. My husband is a financial advisor. He helps people make more of the money they are saving. Find someone that can help you save while making more money.

[rodgerdodger]

My parents are paying for my college education and I am SO blessed for them to be able to do so. I'm the first person in my entire family (including extended family of over 200 cousins!) to go to college. Both my parents struggled and didn't graduate high school, and only recently (the past five or six years) was my dad able to get a lot of money from the family business. My grandfather only paid my dad minimum wage but when he passed, my dad became the "boss" and his paycheck increased ten-fold.
Every nickle and dime my parents make is going into paying off my college loans. Part of me really hates that they are working so hard, but another part of me understands that having a child graduate from college is a dream they both have had forever. I will pay them back in thirty years when I am taking care of them in my own house when they are old and wrinkled haha

[FLOSSY77]

Some states in the US have pre paid college plans. Idon't anything about them but it's worth a look.

[Medic]

Here's basically the nutshell of an RESP: https://www.tdcanadatrust.com/products- ... -index.jsp

Government website on it:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs ... w-eng.html

I found a FAQ page on one if the bank websites and it says what if my child doesn't go to post secondary and they said there's a penalty fee of the money you get back, but it's hard for me to understand. I think I'm going to look into other accounts like tax free savings accounts, high interests savings accounts, etc then lay out all the pros and cons in front of me. I really need a banker to explain this to me in dumbed down versions. I really like your idea shameless! I'm definitely going to do that, I'm worried that he won't work as hard if he's not paying for it. I'm not going to tell him about it until he's in college/uni.

Regardless of his grades I will pay some unless he drops out but the higher the grade the more I pay I think that's what I'll do




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[Shameless]

Here's basically the nutshell of an RESP: https://www.tdcanadatrust.com/products- ... -index.jsp

Government website on it:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs ... w-eng.html

I found a FAQ page on one if the bank websites and it says what if my child doesn't go to post secondary and they said there's a penalty fee of the money you get back, but it's hard for me to understand. I think I'm going to look into other accounts like tax free savings accounts, high interests savings accounts, etc then lay out all the pros and cons in front of me. I really need a banker to explain this to me in dumbed down versions. I really like your idea shameless! I'm definitely going to do that, I'm worried that he won't work as hard if he's not paying for it. I'm not going to tell him about it until he's in college/uni.

Regardless of his grades I will pay some unless he drops out but the higher the grade the more I pay I think that's what I'll do

Hahaha lucky for you, Shameless is a banker. Too bad I'm from Australia but I'll have a go anyway.

It sounds like the money (interest) that is earned by the fund is not taxable until it is removed for use, and then at that point it is taxed at the rate of the person who is receiving it (the student) which would be a very low rate as the student wouldn't be earning much income at that point. Then there are grants and stuff that you can get but tbh it doesn't really make a lot of sense to me either. Other than that there doesn't seem to be a whole lot of benefits. Whenever I read about these types of programs, I always wonder if they make it confusing on purpose so that people won't utilise them.

If it were me, I probably wouldn't use an RESP, although there are some savings to be made, it sounds quite restrictive. Especially if you only plan to have on child so you can't roll it over to your other kid if one decides they don't want to go to college.

At least if you've got it in a regular savings account you can use it for other things like buying them a car, helping with a house deposit, etc. How old is your son?

Don't feel bad that you can't put much away. Something is always better than nothing. Even if it's like 30 bucks a month. Just put it away and then ignore it. I've always found that saving attracts saving. Once you get into the habit it becomes really quite easy.

Best of luck to you Medic, if you have any questions feel free to PM me. I am only young in my career but I will do my best to answer them, or at least give you a different perspective.

[TaylorKnows]

My parents are paying what they can. They started a fund awhile ago and they put money in every month for when I switch to a bigger university. Since I go to CC right now, they're paying out of pocket because we can afford that on a payment plan. I will have to take out loans and all of that, because my parents don't make enough to support me all 4 years, but I do qualify for financial aid, which is good.

I don't know what they use for our college fund. I do know that's an account we can only use strictly for school. When I was thinking about not going to college, my college fund would've gone to my brother. And vice versa if he chose not to go. (Though I'll be almost done by the time he starts and he's very serious/studious so I don't see that being an issue)

[TaylorKnows]

My parents are paying what they can. They started a fund awhile ago and they put money in every month for when I switch to a bigger university. Since I go to CC right now, they're paying out of pocket because we can afford that on a payment plan. I will have to take out loans and all of that, because my parents don't make enough to support me all 4 years, but I do qualify for financial aid, which is good.

I don't know what they use for our college fund. I do know that's an account we can only use strictly for school. When I was thinking about not going to college, my college fund would've gone to my brother. And vice versa if he chose not to go. (Though I'll be almost done by the time he starts and he's very serious/studious so I don't see that being an issue)

[Medic]

Thank you shameless!! Okay going with no resp thank you to everyone else too!


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[whatsername_]

My dad paid for my college fully and he spent over $100k on it and it was pretty much a total waste of money for him and a waste of time/a completely miserable time for me. I should not have gone to college. My parents said it was my only option.

If I have a kid I will probably save up for a couple years of community college. I would encourage my kid to take off at least a year after high school to decide what they actually want to do. A college degree is almost worthless nowadays and will be even more worthless in a decade.

I know this sounds pessimistic, but I truly believe most people should not go to college. If someone absolutely knows they want to be a doctor or a lawyer or some other profession that requires a degree, fine, but they better really be sure.

where do you live? in america, you NEED a degree to be able to advance in any job, essentially. unless you're starting low, which you will, and working your way up over years. even if you just have a degree in SOMETHING, it will help you get a job in a better paying position than you would have without it. not to mention, it makes you much more of a contributing member to society. knowledge is power, my friend.

This is extremely untrue. Most of the time, people are over-qualified with degrees, especially where I am. And so they're overlooked.
Most great jobs, like the one where I am, you only need a diploma.

Why else would you have a job, if not to progress and grow with it?

[whatsername_]

Well, with teaching you just need certification, not necessarily a teaching degree.
Same with nursing. There are other options for people who don't see schooling as something for the long haul.

[FLOSSY77]

My dad paid for my college fully and he spent over $100k on it and it was pretty much a total waste of money for him and a waste of time/a completely miserable time for me. I should not have gone to college. My parents said it was my only option.

If I have a kid I will probably save up for a couple years of community college. I would encourage my kid to take off at least a year after high school to decide what they actually want to do. A college degree is almost worthless nowadays and will be even more worthless in a decade.

I know this sounds pessimistic, but I truly believe most people should not go to college. If someone absolutely knows they want to be a doctor or a lawyer or some other profession that requires a degree, fine, but they better really be sure.

where do you live? in america, you NEED a degree to be able to advance in any job, essentially. unless you're starting low, which you will, and working your way up over years. even if you just have a degree in SOMETHING, it will help you get a job in a better paying position than you would have without it. not to mention, it makes you much more of a contributing member to society. knowledge is power, my friend.

This is extremely untrue. Most of the time, people are over-qualified with degrees, especially where I am. And so they're overlooked.
Most great jobs, like the one where I am, you only need a diploma.

Why else would you have a job, if not to progress and grow with it?

I kind of agree. Doctor, lawyer ect. but if you are smart or creative no need.Go get um. College is a waste. I made more money than my college educated friends. I never finished. I hated school. I am creative.

[VolcomCherry]

No not for college/uni.
However a fund towards their first car or deposit on a home loan etc.


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