Have a child in Canada? Get over $500/year in 4 simple steps!

As my wife got pregnant (yay!), I started to do some research to prepare for my baby’s future. As I was doing some research, I found a way to get significant savings for the baby’s future and wanted to share with fellow parents/parents-to-be.

Assuming that your kids will one day go to college/university, the parents would need to save decent amount of money for the upcoming tuition (unless they are planning to let the kids have student loans). RESP (Registered Education Savings Plans) is a great tool to do so.

Here is the 4 simple steps to get over $500/year:

(1) Get a SIN for your kid.

(2) Open a RESP account with a bank or other financial institutions, registering your child’s SIN to associate with the account.

(3) Deposit $2,500/year into the account. Invest the money in your preferred investment vehicle (e.g. stocks, EFTs, bonds, GICs, etc.)

(4) Canadian government deposits $500-$600* (depending on your income) into the account.

The above figures may change depending on the government’s policy. Check here for the latest info. Think of RESP as the education version of RRSP, with incentives provided by the government, not the employer. If your income is less than $46K/year, you may also want to check out the Canada Learning Bond. There are additional incentives for those who have relatively low income. This is why I love Canada. Canada is pretty nice to poor people.

My wife laughed at me for how I even started thinking about the baby’s education more than 6 months before she is even born but I am very excited to use this program to get extra savings to prepare for my baby girl’s bright future.

Are you wondering what to invest for RESP? Check out my valuation articles to find great investment opportunities. Follow and subscribe my blog to keep being posted on my latest investment ideas and personal finance tips!!