A Real Gift for the Kids

While most parents focus on buying that perfect gift for their kids for the holiday season, I tend to skip that.  I don’t want then to have the ‘perfect’ gift, but rather a gift.  Since more often than not about a month after opening their present they won’t be able to tell you who bought them that toy anyways.  Instead I tend to focus my efforts right now on something the kids never even see their Registered Education Saving Plan (RESP) account.

After all what do you want most for your kids?  To be happy, to grow up and find something they like to do as a job and potentially retire early themselves (if they would like to).  So an investment in some kind of post secondary education will likely help them out for the majority of their lives (especially if they can keep any student loans to a minimum).  While I don’t know what my kids will want to do when they grow up I am at least taking some steps to put some money aside for them.

Currently their RESP account has a little over $40,000 for both of them.  Not too bad given my boys are currently ages 8 & 5.  That gives me about 7 more years of saving to finish up saving for the first kid.  We currently put aside $167 per kid, per month.  So adding in all their grant money and assuming a 4% real return we should have just under $95,000 (in today’s dollars), by the time the first kid goes to post secondary.  So overall each kid will have around $50,000 to fund some kind of education.  Will that pay for it all? Frankly I doubt it, but it at least gives them a good start in life.

You see I love my kids, but I have no illusions of paying their way through Harvard law school which tuition alone for a SINGLE year is over $50,000.  Needless the say, I’m keeping my sights a wee bit more modest for them.  You see I really don’t want them to have “the best”, just like their holiday gifts, I just want them to have something.

So how much would you put towards your kids education?  Do you look for the best or settle on more realistic dreams?

2 thoughts on “A Real Gift for the Kids”

  1. I do the same thing. Any money given to my little bugger goes straight to the RESP. I don’t put more than 2500 a year though because I want to maximize the govt 20% matching.

    Any extra money he gets beyond that is set aside and used as a mortgage prepayment at the end of the year (which helps out the whole family with interest savings), and I will keep track of the % and $ ownership he has in the house and pay him back when he eventually moves out.

    He’s not even 2 yet but as of the end of this year he will own $1000 worth of the house. Not bad for a guy who doesn’t even know how to jump up and down yet.

  2. $0 in any funds for their tuition unless I have the money available to do so after having met my retirement needs.

    I’ll probably end up using the RESP since it’s so easy at $2500/year but otherwise I am not planning on paying for their education, which is something they will know up front.

    (It’s another story after they graduate and I have the cash to gift each child fairly to help them pay for their education, but I do not want any expectations that I am planning on giving them anything. Scholarship and bursaries — they should be on them like white on rice.)

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