Teaching Our Kids To Play Safe On Public WiFi

Most people take for granted that if they have a question or want to look up information, they can jump onto the internet and the answers will be at their fingertips. Kids today understand that they need to keep passwords private and that they have to be responsible about caring for expensive gadgets like tablets, laptops and smartphones when they’re being used away from home or their classrooms. But as WiFi becomes more available wherever we go, the internet can falsely appear to be a seamless, safe space when we move from home or the classroom into public spaces.
Parents and teachers still need to remind young people to keep in mind that how they connect to the internet in public is as important as keeping passwords private and not interacting with strangers online. Teaching your kids to always take a few mindful steps when connecting online in public can ensure that they don’t get more than they bargained for when surfing the net on open networks.
When in doubt, use your data
Now that wireless data packages are becoming more or less limitless, the hands-down best practice according to Wired.com for internet use in public is to use your own phone as a private password-encrypted data hotspot. If that’s not possible, it’s important to keep in mind that no public WiFi service can be 100% secure.
Learn which networks are safe to use
If your children need to use public WiFi, remind them to be sure they know who is providing the service and to only sign on to networks they trust. Keep in mind, scammers can create very legitimate looking login pages. If in doubt, or if the page looks fake – misspellings in the URL or the colours are off – they can ask an employee if WiFi connection is legitimate. The number one way for hackers to access personal information and other sensitive information is to lure users into signing onto fake hotspots. Even if a WiFi service is legitimate, other users may still be trying to phish from your public online activities, so doing banking or other sensitive activities that require private passwords should be avoided on public networks.
Always click the “forget network” option
Companies like Starbucks and other large chains offer free internet access but can be cumbersome to sign on to because they may ask for information like email accounts and phone numbers. Allowing devices to automatically connect to frequently used spaces can be tempting. However, it’s best to limit the number of networks your devices automatically connect with and be sure to set up devices to ask if a public network is legitimate each time before signing on.
Turn off file sharing
Devices connected to public networks should also have file sharing preferences turned off, except for in specific circumstances like working on a group project and be sure to have firewalls active when using public services as well. When file sharing is active, hackers might be able to access any files on the connected device. So, turning this capability on and off as needed in public should be a required habit.
Use only HTTPS sites
While surfing on a public WiFi connection, teach children to avoid pages that aren’t encrypted with the HTTPS protocol. This encryption stops other people using the same public WiFi from snooping on their activities and will help them avoid insecure sites in general.
Turn on firewalls
Firewall warnings are often annoying when we’re using the internet on a secure system at home, so most people tend to turn them down or turn them off completely. But firewalls protect devices from malware and other malicious attacks from unsafe websites, so it should become a habit to turn them back on whenever using public WiFi networks.
Other sources:
For more information check in with our resident education expect, Karen Wallace at Knowledge First Financial!
See what our customers are saying about us www.knowledgefirstfinancialreviews.ca
Email: Karen_Wallace@HeritageRESP.com

A Written Plan Can Help You and Your Children Achieve Their Education Savings Goals

If the news about the rising cost of tuition and student debt are keeping you awake at night, you are not alone. Stories about young people graduating from university with mortgage-sized debt loads seem to be everywhere lately. But experts agree, that no matter our income level, parents can help their children meet their education goals by creating and sticking to a written plan.
Recently, the Financial Consumer Agency of Canada (FCAC) released its findings from a cross-Canada financial well-being survey it conducted in early 2018. Their survey results show that “regardless of the amount of money someone makes, regular efforts to save for unexpected expenses and other future priorities appears to be the key to feeling and being in control of personal finances.”
It turns out, though, that less than half of us are actively saving for things like RESPs or RRSPs, let alone for other unexpected expenses. One in 10 of us uses credit to cover monthly expenses and a similar number of Canadians report that they regularly splurge and make purchases they can’t afford. These statistics beg the universal question: if sticking to a budget increases our overall sense of well-being, then why do so few of us actually do it?
Like anything that’s good for us, it would seem that budgets are easy to put off getting around to. Financial advisors suggest various reasons for this. Modest income earners may feel that having a budget won’t work for them because they have no discretionary income to save in the first place. Meanwhile, higher earners may be meeting their monthly payments, so they don’t see the value in bothering with a budget.
Another element that may be holding people back from creating a written plan is that the process can seem overwhelming. So, we created this simple monthly budget that you can download to get you started and help ensure that you’re contributing to your and your children’s future goals.
A basic budget can be created by using our tool and following these easy steps:
Determine household income. Include items such as your income, spousal income, interest, dividends, gifts, rental income etc.
List your expenses, including rent/mortgage payments, utilities, groceries, insurance, as well as discretionary spending like entertainment, clothing, eating out, gifts, etc.
Calculate income versus spending. If your final figure is a negative number, some adjustments for discretionary spending may need to be made. This number can help you establish realistic debt-repayment and savings goals.
Set goals and pay yourself first. Once you have a broad sense of your financial landscape, advisors suggest paying yourself first so that you can keep on track for your long-term goals. The easiest way to manage this step is to set up pre-authorized payments for things like RESPs and RRSPs.
Track your spending. Tracking spending is a great way to develop better budgeting habits. Smartphone apps can help make this step almost second-nature. After all, it’s all too easy to spend just $5 extra per day without noticing, but that can add up to a whopping $150 per month!!
By sticking to a written plan and tracking your spending, you can make more informed decisions about where you want your money going. You can also ensure that you are maximizing your ability to contribute to and enjoy the compound growth that comes with products like RESPs, RRSPs and by paying down debt faster.

What Will Tuition Cost for Your Child?

According to Statistics Canada, tuition costs across the country rose by an average of 3.3% during the 2018/2019 school year. This is up to a full percent higher than Canada’s rate of inflation over the same period. Parents know that saving for their children’s post-secondary education will help their kids offset the cost of education when the time comes, but many are unprepared for how high tuition could be in the future. Children born in 2019 could pay over $30,000 for their first year in tuition and on-campus residence costs. By 2037, a four-year university program is expected to cost just under $70,000.
Tuition costs will vary for students, depending on which province they live in, and some costs may be offset by grants and scholarships. But with stories of the crippling debt that some students have to deal with after graduation, it can make one wonder whether the investment is worth it. The short answer is yes. Today, people with post-secondary education continue to earn more income over their lifetimes than people with only a high school diploma. As work shifts in the future, skilled workers will be in higher demand, while those with only basic education will risk being left behind or replaced by automation.
An RESP is a smart and proactive tool that parents and individuals can set up to earn tax-deferred benefits that grow throughout the lifetime of the plan. As well, all Canadians under 18 are eligible to receive up to $7200 in matching grants from the Federal government, along with various benefits from provinces. Tuition costs are on the rise, but the benefits of investing in higher education continues to pay dividends in the long term. By planning ahead and taking advantage of as many benefits and grants as possible, parents can give their children a head start when it comes to managing the costs of post-secondary education.
For more information about saving for your child’s tuition, contact Karen Wallace at:

How Drawing up a Will Can Help You Determine Your Legacy

Keeping an up-to-date last will and testament is a crucial component of estate planning and maintaining a solid overall financial plan for families. Surprisingly, however, more than half of Canadians don’t have a will at all. Another 15% of us acknowledge we don’t keep our existing wills up to date. That means as many as 65% of Canadians are at risk of letting an outside legal process decide what happens to their assets should they pass away. Drawing up and updating a will gives us control over our assets after we pass away, so why is it that so many of us put off making a will?

What happens if a person passes away intestate?

The worst-case scenario for people who die intestate, is that all the careful measures they’ve taken to care for their children and other beneficiaries for the future could suddenly become null and void. For instance, parents who have been paying into an RESP and who have claimed the Canadian Education Savings Grant (CESG) may risk losing those benefits if they die intestate. The administrator of their estate may have no choice but to collapse those plans and distribute them to all of their beneficiaries, while the CESG and other benefits may need to be repaid to provincial and federal governments. There are some fail-safes in various investments and insurance plans that may shift those plans to a spouse or partner if the worst should happen. However, without a will, if both parents pass away, their hopes and plans for their beneficiaries’ futures could unravel.

Planning your legacy

Drawing up a will can be a positive experience. It’s a process that can help us determine what type of legacy we wish to leave behind. We can leave gifts to charities or causes that mean something to us. A will is where can assign guardianship for minor children so that they don’t become wards of relatives we’d be uncomfortable raising our kids. We can even state who will take care of our beloved pets and set aside some funds for their care. Thinking about making a will can feel like doom and gloom, but in reality, by setting out our wishes and hopes for our beneficiaries and our assets, we can take control of our legacies with a fairly simple document.

What’s holding us back?

The most likely reason many of us procrastinate on the task of drawing up a will is that it’s not particularly pleasing to think about our demise. It’s also not a topic that is top of mind when younger people are starting careers and families. So it’s not surprising that people over 55 are more likely to have an updated will than those in their 20s and 30s. In fact, 88% of Canadians between 27 and 34 say they don’t have a will.

It’s understandable that people in this younger demographic just don’t think they’re old enough to even need a will. Yet this is the age group that is most likely to have young children who would need to be taken care of should their parents pass away. A will can help ensure that the supports, including RESPs, that parents have put in place for their young children are delivered in the future according to their wishes.

How much does it cost?

The other reason many people don’t set up a will is because they’re worried about costs. Finding and hiring a lawyer may be intimidating for many, and lawyers’ fees may be too costly for some budgets. There are a number of low cost will kits available for purchase that can help people set up simple wills. These can cost anywhere from $40 to over $250, and they can be useful for straightforward estate planning.

Luckily, Knowledge First Financial clients also have free access to the Knowledge First Financial Will Kit, that guides clients, step-by-step, through the process and allows them save their documents on their own computers and to make changes when necessary. Laws are slightly different in Quebec, so those clients should consult the province’s estate planning rules.

Have more questions? Meet Karen from Knowledge First Financial at our ‘From Bump To Baby & Beyond Show’ this February 8th! Or you can reach Karen at the email below:

Karen_Wallace@HeritageRESP.com

Program Administrator Job Opportunity

We are looking to add one amazing person to our dream team! This December, we are looking to hire a program administrator to help with team organization of events, workshops, planning and business development. Take a look at the post and see if you fit the criteria! We are all about community and connection so if this is one of your core values, think about sending in an application!

Program Administrator – Mommy Connections Calgary
* The successful candidate is someone who is organized and efficient, who has an administration background and is capable of working with and managing a team. This person will be working from home, so highly motivated, and is able to work primarily 2 hours during the daytime hours as well as some evenings. Here are the details of the position:
1. Program Planning (planning 8-10 programs every session – 6 sessions a year)
2. Facilitator Documents & Agendas
3. Business Development (2-4 new businesses per month)
4. Responding to emails regarding programs (inquiries)
5. Rebooking presenters if they cancel last minute
6. Manage facilitator booking, contracts and invoice checking
7. Managing day to day of programs – any issues, you are the first point of contact
8. Weekly call with the Director and Program Manager
9. Managing workshops and events – booking facility space and presenter – following up with presenter, etc.
10. Participate in the facilitator orientation (every second month)
10. Any other duties as discussed and agreed upon.
Approximate Hours a Week: 15 hours (2 – 4 hours a day) * These hours will be daytime, but some may be in the evening. You will be working primarily from home with the occasional time you are required to attend programs, events and or workshops.
Compensation: To be discussed based on experience.
  1. Please send a cover letter and resume to our director Katherine at katherinemcyyc@gmail.com. In the cover letter, let us know WHY you are applying, WHY you think you’ll be a great addition to our dream team and as well if you have taken a program with us before.
  2. Deadline for application for both of these jobs is Friday November 22nd. Please do NOT contact us, we will contact you if you are chosen for an interview.
  3. In person interviews will be held during the last week of November, with the successful candidates chosen and beginning in early December.

Good Luck!

Echinaforce JR: Product Review

My little man is 4 years old now and he’s quickly learning that winter brings more than just snowmen, sledding, and skiing.

Last year he got sick. Not just once but a handful of times. It seemed like our house just continued to pass along colds and cases of the flu all winter season. It wasn’t a great winter.

This year we are optimistic about change. He’s one year older, he has now been in preschool for one school term so hopefully, he’s slightly more immune to every single illness. But this year I decided to try something different.

My husband and I both take our daily vitamins but we also take echinacea which we have found to be very helpful during the cold season. So I did a little research and found out that a company does, in fact, make echinacea for young ones!

A. Vogel makes ‘Echinaforce Junior’ a cold & flu chewable tablet for prevention and treatment. It helps to prevent and relieve the symptoms of upper respiratory tract infections (common cold and flu) and shorten their duration. It is recommended for children ages 2 and up. Bonus it contains no dairy and or wheat.

This is our first winter season we have decided to try it out and see if it works for my son. So far, he asks to take it every morning with his regular vitamin and he has no problem taking it. Check back with me after the cold and flu season has come and gone, when I will have more solid evidence but I can say that since September when winter really does begin in Calgary, he has yet to have a cold.

Like all of you, I just want the best for my kids, so I urge you to take a look and see if this might be an option for you in the fight to keep your little ones healthy this winter season! We handed it out at our recent Travelling Tot programs and I am not sure who was happier to receive it. Parents or the kids who thought it was a treat!

For more information on A.Vogel and ‘Echinaforce Junior’ you can check them out below.

https://www.avogel.ca/en/herbal-remedies/echinaforce-junior.php

Warrior Label

Meet Venesa Wheatley. She is the creator of @Warrior Label, a brand of apparel designed to acknowledge, honor and celebrate warriors.

In 2015, when Venesa was almost 39 weeks pregnant she and her husband lost their daughter, Kate, to stillbirth. Venesa found in those early days that she really needed to be truly seen and heard; that she needed to share her story in order to process her loss and honor her daughter’s life. 4 years later, her need to be acknowledged for her story hasn’t changed, but where she once was so consumed by grief, she now feels stronger than ever for what she has gone through. She feels like a WARRIOR.

In her going through her own struggle, it also made Venesa acutely aware of other people’s struggles and their capacity for resiliency. She believes that there are millions of warriors out there, each with their own story, and feels they need to be both acknowledged and celebrated. She does this through the thoughtful designs of their apparel and in an on-line community she is establishing. 

When she’s not busy building Warrior Label, Venesa is working part-time (both as an HR professional and a substitute teacher), volunteering in the pregnancy and infant loss community, and being an awesome mom to their 2 living children. Warrior Label is a brand of apparel designed to acknowledge, honour, and celebrate all warriors, no matter where they are in their journey. In choosing fabric that warms and envelops the body, to creating designs that resonate with those who are warrior-ing on through their struggle, compassion, care and acknowledgement are infused in every part of their brand.

Warrior Brand also gives back 10% of their profits to charities that provide support to individuals and families going through adversity. To learn more about their apparel and how they support worthy charities head to their website here.

Five RESP Myths Busted!

Although Registered Education Savings Plans (RESPs) have been available since the early 1970s there are still some lingering myths and confusion for people exploring this investment tool. This blog will help clarify how RESPs work and address some persistent myths in order to make choosing the right RESP for your family less perplexing.

An RESP is a powerful savings tool designed to help families save for their child’s education. Similar to the Registered Retirement Savings Plans (RRSP) and Tax Frees Savings Account (TSFA), the investments within an RESP grow tax free but that is where the similarity ends.

Only an RESP is eligible for government grants which truly make them the best way to save for post-secondary education. The Canada Education Savings Grant can contribute up to $7,200 to your child’s future and depending on your financial situation and province, other education grants may be available and can add even more to your savings.

When the time comes for your child to withdraw from the RESP, known as an Educational Assistance Payment, the earned income and grants are taxable to the beneficiary, which typically means a minimal amount.

Let’s bust some of those persistent RESP misconceptions!

Myth 1: Setting Up an RESP Should Be Free

An RESP is an investment tool, so while individuals can certainly set up and manage their RESPs for their beneficiaries on their own, there will always be costs involved. At the minimum, there may be annual fees along with commission fees that must be paid if you buy or sell investments within the product.

Many families choose to work with organizations that manage the portfolio of investments on their behalf. Knowledge First Financial works with leading portfolio managers who actively manage low-risk investments to provide steady growth over the long term. “Keep in mind that all investments have costs, such as fees to cover portfolio management and administration.”

There is one important exception available for modest-income families who open an RESP to access the Canada Learning Bond. For families that qualify, the Canadian government provides an initial grant and helps cover the costs of setting up the RESP.

Myth 2: Only Parents and Grandparents Can Set Up an RESP

With an individual plan, like the Flex First Plan from Knowledge First Financial, the beneficiary of an RESP does not have to be related to you. There are no restrictions who the beneficiary is or how old they are — you can even set up an RESP under your own name.

Myth 3: RESPs Cannot Be Shared Among Family Members

If the beneficiary chooses not to continue their education after high school, another beneficiary can be chosen. An individual RESP provides the greatest flexibility in choosing who the beneficiary is.

One thing to keep in mind when changing the beneficiary is the lifetime limit of $50,000. Coordinating with an RESP expert can ensure that your contributions and benefits are maximized for your students/beneficiaries.

Myth 4: Accessing My Child’s RESP Will Be Cumbersome

Your contributions are always available to be returned to you, tax-free. To access the grants, grant income and contribution income in your plan, the process may differ between RESP providers. At minimum they are required to ask for proof of enrolment in a qualifying program in order to withdraw the income in your plan. At Knowledge First Financial, we want to make the process easy and memorable by enabling customers and students to request funds online, offering tutorials and web chat customer service to answer any questions.

Myth 5: If My Child Decides Not to Attend College We Lose Our Savings

The money contributed to your RESP can be withdrawn any time as a Post-Secondary Education payment. If your child is not attending a qualified program at that time, the grants must be returned to the government. Investment earnings can be withdrawn as an Accumulated Income Payment or transferred to your or your spouse’s RRSP if there is contribution room available, provided your plan meets certain conditions specified under tax regulations. While you won’t lose your savings, it’s always best to speak with an RESP expert to understand your options and the financial considerations.

If your child decides not to head directly into college or university after completing high school, there is no need for concern. Beneficiaries have up to 35 years to use their RESP money, which can be used to cover the cost of a number of post-secondary educational programs, including college, university, apprenticeships, trade schools, as well as part-time studies. That means if your child later chooses to change careers or upgrade skills, those funds will still be available through their RESP.

If you would like more information or to set up a free consultation contact me at Karen.Wallace@KFF.ca

How to Understand Your Credit Rating and Credit Score

Knowledge First Financial
Unless you can afford to pay for everything in cash, you’ll need to borrow money at some point. That’s when a good credit score comes in handy. By maintaining a good credit score, you’ll pay less in interest and have more money to contribute to your child’s RESP.
Your credit score is made up of three main parts: credit history, credit report and credit score. Your credit history is like your resumé; it has a history of any time you’ve borrowed money. Your credit report is a yearly recap of your credit history. Your credit score is the number that lenders care so much about. Credit scores usually fall between 300 (lowest) and 900 (highest).
Understanding Your Credit Score
Your credit score is made up of five main factors you’ll want to understand in order to maximize it.
1. Payment History
Your payment history has the biggest influence on your overall credit score. Paying any money you’ve borrowed on time can go a long way in maintaining a good credit score. However, missing payments or paying them late can hurt it. If you do it too often, it can cause your credit score to plummet. By making at least the minimum payment, you can protect your credit score.
2. Total Available Credit
Your total available credit is as the name suggests how much credit you have at your disposal. To calculate your total available credit, take your total credit limits of all your credit accounts minus the total of all your outstanding balances.
Ideally, you’ll want to be using 35 percent or less of your total available credit. Using 35 percent or less of your total available credit shouldn’t impact your credit score. However, when you start using 50 percent or more, that’s when it can lead to your credit score dropping, as lenders tend to worry that you’re getting in over your head.
3. How Many Credit Inquiries
The number of credit inquiries can also impact your credit score. When it comes to credit inquiries, not all credit inquiries are created equal.
There are two types of credit inquiries: soft and hard. Soft inquiries don’t affect your credit score like checking your own credit. Meanwhile, hard inquiries like applying for a mortgage or credit card do. You want to limit the number of hard inquiries to protect your credit score. You can do that by only applying for credit that you truly intend to use.
4. Credit Types
Having just one type of credit like a credit card can hurt your credit score. You want to have a mix of credit. Besides just a credit card, try to have at least one other credit type like a mortgage, line of credit or loan. Just make sure you use any credit that you take out responsibly, otherwise it could hurt, not help your credit score.
5. Length of Credit History
Before a lender will grant you credit, they want to see that you have a track record of using credit in a responsible way. Your credit history goes a long way in demonstrating to a lender you can use credit responsibly over the long-term. The simplest ways you can demonstrate a good credit history is by always making payments on time.
Sometimes people close accounts because they’re no longer using them. However, as long as you’re not paying an annual fee, it’s worthwhile to keep a credit account like a credit card open if you’ve had it for a long time, otherwise you could cause your credit score to fall if you close it.
Karen Wallace
Sales Representative
See what our customers are saying about us www.knowledgefirstfinancialreviews.ca

RESPs vs. TFSAs: What’s the Best Place to Save for Your Child’s Post-Secondary Education?

As a parent, you want what’s best for your child. You do that by helping your children in many ways. You teach them how to ride a bike, attend their school recitals and help them save for post-secondary education. While all of these can be considered important life experiences, the last one can seem daunting. Thankfully, you’re not alone.
There are two popular ways to save towards your child’s post-secondary education costs: the Tax-Free Savings Account (TFSA) and Registered Education Savings Plan (RESP). Each have their advantages and disadvantages. Let’s look at both of them in-depth now.
Tax-Free Savings Account (TFSA)
The TFSA is tax-sheltered account that lets your money grow, as the name suggests, tax-free. You’ll never have to pay income tax on money that you earn in the TFSA, not even when you withdraw the funds. You can hold a variety of investments inside your TFSA, including savings accounts, bonds, stocks, mutual funds and ETFs.
When contributing to the TFSA like any other tax-sheltered account, it’s important to make sure you’re following the rules. There’s a limit to how much money you can contribute to the TFSA each year. In 2019, the TFSA contribution limit is $6,000 and any room that you’re not currently using is carried forward from previous years.
What makes the TFSA great is that it’s super flexible? If your child decides not to go to college or university, you could use the funds towards something else like the down payment on home, a family vacation or whatever else you like.
The one major drawback about the TFSA is that it doesn’t attract the 20 percent government grant, so in most cases you’re better contributing to the RESP first, although the TFSA can be a great place to save for your child’s education if you’ve maxed out their RESP.
Registered Education Savings Plan (RESP)
Unlike the TFSA, which is best described as a multi-purpose savings account, the RESP is an account specifically designed for saving towards your child’s higher education.
The RESP is similar to the TFSA in many ways. You can hold many investment types inside the RESP, including savings accounts, bonds, stocks, mutual funds and ETFs. The investments grow tax-free inside the RESP. (You do have to pay tax when the money is withdrawn, although it’s taxed in the hands of your child.) Since your child usually has little to no income when they’re going to school, they likely won’t have to pay any income tax.
The major advantage of an RESP is that it attracts a 20 percent government grant. That’s the equivalent of a 20 percent risk-free return on your money. Not bad! If you contribute $2,500 per year to your child’s RESP, your child will receive the full $500 Canada Education Savings (CESG).
The RESP also has a lifetime contribution limit of $50,000. While that should be plenty for most, if your child is attending an Ivy League School, $50,000 may not be enough. No matter what account you choose, just know that by helping your child save for school, you’re already doing a great thing to help provide them with a brighter future.
 a parent, you want what’s best for your child. You do that by helping your children in many ways. You teach them how to ride a bike, attend their school recitals and help them save for post-secondary education. While all of these can be considered important life experiences, the last one can seem daunting. Thankfully, you’re not alone.
There are two popular ways to save towards your child’s post-secondary education costs: the Tax-Free Savings Account (TFSA) and Registered Education Savings Plan (RESP). Each have their advantages and disadvantages. Let’s look at both of them in-depth now.
Tax-Free Savings Account (TFSA)
The TFSA is tax-sheltered account that lets your money grow, as the name suggests, tax-free. You’ll never have to pay income tax on money that you earn in the TFSA, not even when you withdraw the funds. You can hold a variety of investments inside your TFSA, including savings accounts, bonds, stocks, mutual funds and ETFs.
When contributing to the TFSA like any other tax-sheltered account, it’s important to make sure you’re following the rules. There’s a limit to how much money you can contribute to the TFSA each year. In 2019, the TFSA contribution limit is $6,000 and any room that you’re not currently using is carried forward from previous years.
What makes the TFSA great is that it’s super flexible? If your child decides not to go to college or university, you could use the funds towards something else like the down payment on home, a family vacation or whatever else you like.
The one major drawback about the TFSA is that it doesn’t attract the 20 percent government grant, so in most cases you’re better contributing to the RESP first, although the TFSA can be a great place to save for your child’s education if you’ve maxed out their RESP.
Registered Education Savings Plan (RESP)
Unlike the TFSA, which is best described as a multi-purpose savings account, the RESP is an account specifically designed for saving towards your child’s higher education.
The RESP is similar to the TFSA in many ways. You can hold many investment types inside the RESP, including savings accounts, bonds, stocks, mutual funds and ETFs. The investments grow tax-free inside the RESP. (You do have to pay tax when the money is withdrawn, although it’s taxed in the hands of your child.) Since your child usually has little to no income when they’re going to school, they likely won’t have to pay any income tax.
The major advantage of an RESP is that it attracts a 20 percent government grant. That’s the equivalent of a 20 percent risk-free return on your money. Not bad! If you contribute $2,500 per year to your child’s RESP, your child will receive the full $500 Canada Education Savings (CESG).
The RESP also has a lifetime contribution limit of $50,000. While that should be plenty for most, if your child is attending an Ivy League School, $50,000 may not be enough. No matter what account you choose, just know that by helping your child save for school, you’re already doing a great thing to help provide them with a brighter future.