Does September mean turning over a new leaf?

As autumn approaches and we all have a renewed spirit of digging in our heels and approaching daunting tasks that we put off during the summer months we may also be thinking of the financial drain, if we are paying, or helping to pay, our children’s tuition fees.  These expenditures can really help with the ‘digging in our heels’ feeling when discretionary funds are so minimized that we have little else to respond to other than those daunting, inexpensive chores. 

If the kids have been home for the summer or if the step children have been visiting more often during their summer vacation then entertainment, dinners out as well as clothing needs for our youngsters have already tapped into our ‘fun’ funds during the hazy days of summer. 

What does it really cost to educate them?  Well, of course, each university or college is different.  Prices depend on whether your protege is going to attend school and stay at home or whether they will be going away for their education.  If they stay in the country it is much less expensive than the hefty international tuition…unless your child has had the fortune to be born in France and returns for their free post-secondary education needs. 

If they stay at home and go to school, in Canada, the average cost for tuition and books is in the $5,000 to $6,000 range.  Of course, this does not include their housing or food requirements.  If they go away to school then you are looking at an average of $20,000 which includes tuition, supplementing their food bill, books and rent.  If we dare to add it up then the stay-at-home kid’s 4 year degree is about $24,000 and the go-away-kid is costing about $80,000.  Keep in mind that this is after-tax money!  If you are paying tax according to Ontario’s highest marginal tax rate then you have to make about $117,000, before tax, to fit this bill.  ….   and that’s for one child!!!

Some children want to go on to graduate studies.  If you are thinking to help out here, then consider that professional designations can be much more.  Have a look at the link to Osgoode Hall’s projected budget.

My advice?  Start saving early for your children’s RESP.  It may be a drain on the pocket book when they are smaller but you will appreciate it when the times comes.  If you happen to run out of RESP funds after they turn 21 years of age remember that they can apply for student loans as, once 21, parental income is no longer a factor in the application process.  This allows you ‘free’ use of government funds until the child graduates and must commence repayment after 6 months………maybe you can even save a little to help out!


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