Save today for tomorrow's post secondary costs
(NC) -- Today kindergarten, tomorrow college or university. It can be difficult for new parents to imagine sending their newborn off to university, but as many parents can attest, 18 years go by much faster than expected.
According to TD Economics, the average cost of an undergraduate degree while living away from home is estimated at $84,000 and is only expected to rise, which means parents need to start saving for post-secondary education as early as possible.
The good news is the majority of Canadian parents do just that. TD Canada Trust research found that 53% of Canadian parents started saving for post-secondary education when their first child was born and 25% started saving when their first child was less than five years old.
Juggling today's bills with saving money for the future is a situation many new parents are familiar with. Janice Farrell Jones from TD Canada Trust offers some tips to help new parents negotiate the costs of a new family:
• Start saving early to take advantage of compound interest.
• Automatic transfers into a savings account, no matter how small, will add up over time. Start small and increase savings whenever possible.
• If money is tight, sit down with the family to look for ways to cut back on current expenses so that there is money to save.
• A financial advisor can help you navigate the savings options available. For example, a Registered Education Savings Plan (RESP) is one of the best ways to save for your child's education because the government provides grants while the savings grow tax-deferred until withdrawn, while a Tax Free Savings Account may work best to save for unexpected costs.