Whether your child is a month old or partway through high school, you've probably thought about the cost of post-secondary education and how you'll pay for it. For many parents, it's an important savings goal.
The tricky thing is that we don't know how much to save. What program will your newborn choose? Where will they want to go to school? Will they want to go straight to the workforce after high school? You might not know what they will do after high school until, well, after high school.
Using an RESP is an undeniably good choice for post-secondary education savings. There are tax benefits and you get free money from the government. But if your child doesn't need the money all the benefits of the plan are stripped away. And there are restrictions on when you can take the money out and to use it for something else. You might not want to put all of your education savings eggs in that basket.
Consider an RESP/TFSA combo. Save some in an RESP to get the maximum government grant (the free money) and top up the savings using your TFSA. A TFSA is a wonderfully flexible account, allowing you to take money out for any reason with no tax consequences. So, put money aside and if your child doesn't need it, use it for something else. (Empty nest trip to Venice?)
There are pros and cons to this approach plus some other things to know about RESPs. There's more in my most recent blog post.
