With two clicks of my mouse I cut off the saving that I had previously been automatically been putting towards my children’s education each month since shortly after they were born. It wasn’t a huge amount of money only $167/per child per month so it wasn’t like I had to do it because of cost cutting or anything.
So why? Well because I hit the goal I had set for their RESP fund. It had recently broke the $80,000 threshold I had set for the total amount saved for both kids. So that gives both kids an even $40,000 each to help cover the cost of their education. Yes I’m fully aware that won’t fully pay for a post secondary degree depending on what they take and where they take it. You see we never planned to pay for all their education costs. We instead wanted them to have a better start than we did.
My wife and I after graduation had a total of $60,000 in student debt back in 2000 which actually was fairly low for two bachelor degrees when we both we paying for living costs as well as the usual tuition and book costs. But it did take us a while to pay off those debts so we wanted out kids to end up with a better start in life than we got. But rather than trying to guess how much to save based on the wide spread of costs depending on what my kids take for post secondary education we decided to instead just save a flat $40,000 per kid to cover the basics and let them decide is the additional cost above that amount is worth it.
Also if I’m going to be completely honest I really only expect one of my kids to go to university. My one son loves math and science so I can totally see him taking a engineering, science or geology university degree. The other son will likely end up with some other post secondary education like a trade or diploma. For him school has always been an effort and frankly I don’t see him in a university, but should he want to try the money is there regardless of what he chooses to take.
On the plus side now that we have stopped those payments to their RESP we can now use their Canada Child Benefit (which over the summer went up to $340/month) to actually pay for those kid related expenses like new clothes and food for my 13 year old who is growing at an insanely fast pace right now. Like seriously the kid has grown almost six inches in a year and eats at times like a bottomless pit (given my own memory of those times growing up this is hardly surprising). Also the money helps pay for their activities like swimming lessons or other classes they want to pursue.
Of course some people might wonder why stop investing in their RESP at all. Why not not just keep saving and pay for all their post secondary education costs? Well when I went to university I saw some of those kids who had all their costs paid for by their parents and at times it didn’t end well. Kids would party too much and study too little and waste everyone’s money and time by failing badly at most of their classes. So I really want my kids have to come up with some of the money for their education. It might be from working a summer job or applying for scholarships I really don’t care how it gets paid as long as they have to do some effort to get it. I want to balance my kids having a good starting point in life with my kids not getting entirely a free lunch.
So how do you handle saving for your kids education? Do you plan to pay it all or partly or none?