If you’ve been reading our blog over the past few months, you will notice we talk a lot about education savings and Registered Education Savings Plans (RESPs).
Saving for a child’s education is an important goal for many families. But it is also a confusing and often difficult task. Parents are often struggling to balance daily expenses, a desire to buy a home or to pay down an existing mortgage, all while also needing to plan for their own retirement. Education savings is just one more thing on the financial “to-do” list.
RESPs are a fantastic tool which allow for tax-free growth of your education savings, and give access to government grants to top up your savings. But with all the rules and exceptions and options, parents often don’t know how to get started – or chose a plan early on, and later realize that it does not work for them, and it is too late to get out without penalties.
Parents (and uncles and aunts, grandparents, family friends, etc.) I am happy to tell you about a fantastic new resource: Mike Holman’s The RESP Book. Mike, a long-time personal finance blogger (First at Four Pillars, which later became the Money Smarts Blog) has written an easy to read, easy to follow guide to Registered Education Savings Plans. He will help you to understand how the accounts work, how to get one started, what kind of RESP account to set up and what kind of investments to buy. He addresses all the relevant topics: RESP grant eligibility, types of grants, Canada Learning Bonds, contribution rules, withdrawal rules, how to avoid penalties, and (I was so happy to see this!) basic investing information.
I spend my days educating Nova Scotians about investing. I have heard the complaints, and sometimes the horror stories of those who have gotten into investment products they do not understand. I have helped individuals navigate the often unreadable fine-print of account contracts and websites. Here, finally, is a comprehensive resource written in plain-language, full of easy to understand examples, to help parents and family members feel confident they are investing their education savings safely, and building a nest egg for their child.
The RESP Book is available from Amazon.ca, but one lucky reader will receive a free copy from Before You Invest and the Nova Scotia Securities Commission. Simply leave a comment below with your RESP question, frustration or success. On Monday, November 8, I will draw one name from all commenters and send that person a free copy. Good luck.
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