Parents don’t need telling twice that saving for their children’s higher education should be a priority. This can be a significant challenge when times are difficult though. Saving for the future isn’t always as much of a priority when the present is a challenge. And with many having lost work or at least seen it reduced in 2020, now may be one of those times when parents are struggling to justify setting money aside for university costs years down the road.
For parents in Vancouver though, there is an argument to be made that saving for higher education is more important than ever. The area is thriving from an education standpoint, but struggling in some respects economically. And that combination makes it vital for parents to pursue strategic savings methods that further educational opportunity with as little financial strain as possible.
Regarding the resiliency of education in Vancouver, we have seen numerous indicators that school systems remain strong despite the difficult times. On the earlier end of the spectrum, this has been manifested in ongoing investment in elementary schools. We’re referring primarily to the $40 million replacement for Henry Hudson Elementary, and while this was sorely needed, the project is still a positive indication that youth education remains a financial priority.
Where more mature students are concerned, meanwhile, we have actually seen rising graduation rates in Vancouver of late. This may not reflect the disruptions we’ve seen in high school education just yet, but it is another positive indicator that local education remains strong. Kids are being invested in, and are consistently graduating with the opportunity to pursue higher education.
Unfortunately, these positive indicators are coming at a time when many families in the area are struggling like never before. Beyond education costs altogether, there are even instances of families struggling with hunger — shedding some light on the full extent of the financial difficulty we’re seeing. Through the winter at least, it’s expected that significant charitable outreach will be needed just to help keep many area families afloat in the most basic sense.
Of course, families in these dire circumstances will have to prioritize other expenses (which speaks to why college tuition is such an issue with regard to equal opportunity in the first place). But for parents looking to get back on their feet and hoping to find ways of continuing to save for higher education even with tighter budgets, finding the right kind of plan moving forward is essential.
There are actually a number of different options available to Vancouver families and Canadians in general. With specific regard to the current situation so many are facing though, an RESP can be the most sensible option for preserving long-term higher education savings. This is true in part because of flexibility and a lack of tax burden. An RESP allows you to invest what you can, when you can, and any earnings the account accrues thereafter are not subject to taxation. Essentially, you can put in even small amounts to do what you can for the time being without worrying that it will burden you in any way.
The other reason that an RESP is a particularly useful option for the present moment though is that there is a matching grants available. Per the Canada Education Savings Grant, 20% of each RESP contribution up to $2,500 per child per year is matched. That means that for every $100 you can mange to slip into an account like this while times are tough, an extra $20 is added (up to $2,500 for the year, and then resetting). It’s an ideal way to maximize those education savings while you may not be able to contribute as much on your own. Parents can give their children the best opportunity with the least investment.
The hope, of course, is that a better financial year lies ahead. Families can get back on their feet, and as many Vancouver-area parents as possible can invest in the further education of their children. But there isn’t much certainty at the moment. The economic recession Canada saw this past summer still confuses some analysts, and forecasts for recovery are varied and, altogether, unreliable.
For these reasons, families prioritizing higher education savings would do well to pursue strategies that align with tighter financial times.
Last modified: December 20, 2020