Feb. 1, 2012

Q: Will you tell your child that they have a RESP?

One of the first things we wanted to set up for Thomas financially when he was born was a Registered Education Savings Plan. Greg and I both paid our way through our undergraduate and graduate degrees with scholarships, earnings from summer and part time jobs, and assistance from our families. Thankfully we didn't have to take out student loans, but many of our friends did (and are still paying them off) so we know the challenges they can create. We wanted to make sure Thomas had a little socked away to assist with his savings in case our financial situation when he's ready for post-secondary doesn't allow for us to contribute, and to ensure that the money we can contribute now has an opportunity to grow through investments before that time.

Living where we do, our provincial government and federal government both offer financial assistance towards raising a child for the first year ($2200 total) and first six years ($7,200 total), respectively. We've decided to put all this money directly in the RESP and top up the remainder of the yearly space ($2500). Now that this is all sorted out in a tidy monthly contribution plan, we're wondering whether (and how) we should tell Thomas that he has it. The company that holds our investment sent us a certificate to show Thomas when he's older that states he is the holder of a RESP. Until receiving it, we hadn't given any thought to when and how we might tell him that he holds this investment. After discussing, at least given what we know now, we think we'll tell him when he's finishing high school and (hopefully) making his plans for further education. We don't want him to think of it as a free ride, and want to encourage him to seek out scholarships and employment opportunities to help make his education plans come to fruition as we did. What do you think? If you have a RESP for your child or expect to open one soon when do you plan to tell them about it? Photo via Queen's University (one of my alma mater).

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