Going back to school in September was always one of my favorite times of year. I loved shopping for school supplies – books, pens, calculators, new clothes. While I’m sure my parents were glad to see me back in class every Fall, I’m not sure they shared my enthusiasm about the shopping or tuition part. If you’re a parent, you know that education is one of the biggest expenses that families face and with the costs expected to keep rising, you definitely need a plan.

The Costs

To give you an idea of what to expect, a four-year English degree at Carleton University in Ottawa will run about $16,100 per year, including double-occupancy campus housing and a meal plan. The total, no-frills, estimate for four years at Carleton: about $64,400. If your child lives at home, expect to pay between $5,000-$8,000 a year for tuition and books alone.

Different types of programs, accommodations and meal plans will affect your calculations. To estimate costs, contact prospective post-secondary institutions and check out the tuition and expense calculators that are readily available on-line.

The Canadian government’s CanLearn web site is one of the most comprehensive RESP info sites with detailed on-line calculators. Most financial and educational institutions also have their own on-line calculators, but be careful some of them neglect key expenses like books and supplies.

Also keep in mind the hidden/ignored/forgotten expenses that not even the best calculators allow for. These costs can include computers, software, art supplies, cell phones, long-distance calls, special health or medical needs, trips home at Christmas etc.

Paying for Education

Now – how to pay for it. This can be a mix of student loans, family savings, summer jobs or part-time work, scholarships and so on. I’ve noticed how much pressure parents put on themselves these days to cover the full cost of university. Sure costs are higher than ever, but having your kids contribute in some way to their education is a good long term lesson in financial responsibility for them.

Registered Educational Savings Plans (RESPs) are now the most popular and flexible vehicles for education savings.  Available through most banks and financial advisors, I particularly like that parents aren’t the only ones who can contribute to them. Grandparents, aunts, friends can get on the act too.

It also helps that the Canada Education Savings Grant (CESG) can add as much as $500 per child per year to your savings. (See tips on Setting up an RESP)

Make sure You Have the Right Investment Mix

As with any investment, it is crucial that you review your RESPs at least once a year to know whether you’re on track to meeting your education funding goals.  You also need to make sure that the asset mix is in line with your investment time frame. If you need to start drawing on the RESP within the next 3-4 years, make sure that your RESP holds some cash investments. The last thing you want is to have a market downturn wipe out your hard-earned savings at the eleventh hour. – Karin Mizgala

Karin Mizgala is a Vancouver-based fee-only financial planner with an MBA and a degree in psychology. She’s the President of LifeDesign Financial and co-founder of the Women’s Financial Learning Centre.