The ABCs of RESPs

As parents we often think of the major milestones our children will accomplish – first word, first step, first day of kindergarten, and the list goes on… A growing number of parents are taking this one step further and are planning for their child’s first day of postsecondary education. 

While it may seem far away now, considering that your child may not even know how to sit yet, it is important to start preparing for that day sooner rather than later.

 Why save?

According to Statistics Canada, university tuition fees in 2011/12 were an average $6,062 - that’s 17.7% higher than they were four years ago. Costs continue to rise faster than the pace of inflation, leading some to believe that children born today will be looking at post-secondary costs in excess of $100,000.  As parents, no one wants to see their child struggle to pay for school and end up in debt.

Maximize your savings with an RESP

A Registered Education Savings Plan (RESP) is a plan registered under the Federal Income Tax Act that helps families save for postsecondary education. Not to be confused with a Registered Retirement Savings Plan (RRSP), contributions are made with after-tax dollars and income earned on contributions grows in a tax-shelter until a child is ready to attend college, university or trade school.

As an added incentive, the federal government’s Canada Education Savings Grant (CESG) and the provincial government’s Alberta Centennial Education Savings (ACES) grant can add up to an additional $8000 plus interest over the life of the plan!

The ABCs of RESPs

There are two main types of RESPs:  Group and Individual/Family savings plans: 

Group Savings Plans

Group plans are education savings plans with a scholarship plan dealer where regular contributions are pooled with those of other planholders providing better opportunities for higher returns than you would achieve on your own due to greater economies of scale.  These plans are ideal for those saving for children aged 12 or younger who are comfortable making regular contributions.  Some group plan providers offer additional incentives such as a share of income from cancelled plans, donations from the plan provider (often a foundation) and a refund of enrollment fees.  There is an option to transfer to an Individual or Family savings plan after having been enrolled for 3 years or more.

Individual and Family Savings Plans

Also known as self-determined plans, these are ideal for children 13 years or older, for parents who anticipate their child will attend a postsecondary program of two years or less, or for families who do not want to establish a regular contribution schedule.  The plans are managed by the planholder themselves or a financial or investment advisor. These plans offer greater flexibility than group plans but have a lower potential payout as there are no additional sources of funds and tend to have to assume greater risk to match the returns of group plans.  You can name one Canadian-resident child as the beneficiary in an Individual Plan.  In a Family Plan, you can name one or more children as beneficiaries provided they are all siblings and under the age of 21.

Start saving today

Many of us do save – but very often if is for our own retirement which is decades away. We tend to forget about saving for our kids’ education which comes much sooner than we think. The reality is that many parents will need and want to help pay for their child’s education before they retire - an RESP is often the best way to reach this savings goal.

It's the little things...

My new sister has arrived!  OK that sounds a bit odd especially for those of you who know me, but it's true.  OK so technically she's my cousin, but her mother passed away about 8 years ago and my mother began the lengthy process of adopting her.  What makes this so interesting is that she was born and raised in a tiny village in Tanzania and arrived in yeg this weekend.
She's 19 now and for all intensive purposes is a typical teenager.  She loves texting and music videos.  She bores easily.  She rolls her eyes.  ALOT.  But there are some pretty big differences.  She has never seen or used a dishwasher or microwave.  She's lived without a flush toilet her entire life.  She has lived under power failures and brownouts.  She's used to charging her cell phone with a hand crank generator (the juxtaposition here makes me giggle!).  She doesn't look at you directly when you speak.  She speaks no english.  I could go on and on. 

Since her departure from her village less than a week ago she has seen more new things than she could have ever imagined and she is handling it all with a stride. 

Now the language barrier has been tricky.  Half my family speaks her native tongue.  The other half not a word.  Now this has added several decibels to our family dinner, but it's working great.  My 3 y.o. was doing flash cards with her.  She'll say the word in english and then learn the word in swahili.  CUTENESS!!!

Now when the conversation veers english for too long she has developed a strategy that involves grabbing my baby Pikey "Mr. Allergic" and playing with him.  They communicate silently.  It reminded me of that movie "Babies". It is adorable to watch and has led to some pretty hilarious moments:

1.  When she was explained that the rash on his face was due to a food allergy, she suggested we stop giving him the food that does that to him.

2.  When we explained that we were trying to that, she reponded that all we needed to do was smear him from head to toe in pork fat.  (We are totally going to try this!) stay tuned @Zoomjer

3.  Within moments of being introduced she had grabbed him by one hand, swung him over her shoulder and tied him to her back with a loose cloth.  This got me thinking of those baby wearing advocates like @CosyBbyHappyMom

4.  She is completely dismayed at the fact that this 8 month old is not crawling.  She is convinced there is something wrong with him.  I caught her dangling him by one arm dragging him from one room to the other trying to get his body to cooperate.  Stay tuned for results.

Now this fourth point has really got me thinking.  In her culture, they spend every waking moment with their babies trying to wean them from being physically dependent.  The faster they can crawl/walk/feed themselves, the faster they can contribute, or maybe less selfishly, survive.  Their babies make our babies look pathetic!  In our culture we always say "They'll sit/crawl/stand/walk when they're ready."  Is this really true?  Maybe there are ways we can pressure our kids into hitting these milestones earlier, but it is our own laziness that prevents it.  It's much easier to carry him from point A to point B than to drag him.  Am I right?  Who thinks this strategy will affect how quickly my kiddo starts moving?

Ummmm. Ya... He's allergic to everything.

So forgive me if this post is all over the place, but given this is my first attempt at blogging and I'm a work from home mother of 2 berserker babes i'm just gonna let 'er rip! 

I need to vent about my 7 month old son, heretofore known as Pikey.

So Pikey is a dreamboat.  An absolute dreamboat.  Nothing but smiles.  The kind of kid that when you lean in for a kiss, he snuggles in to you.  Awwwwww.  This is what makes this next part so heart-breaking:  Child be allergic to EVERYTHING!! 

Now Pikey was a breastfed baby.  Now after reading Tech Mommy's blog post about BF issues, I'm now convinced he had some issues back then, but I persisted.  Afterall, breastfeeding is the single best thing you can do for your baby, right?  At about 5 months old we started supplementing with 1 bottle of formula at night.  Pikey be hungry!

He had rashes right from the beginning.  Our pediatrician, who is the WORST, just said: "It's eczema.  Very common.  It will clear on it's own." (Remind me to do a separate post on the over-specialization of AB's medical system!)

After a few months of no change, my girlfriend showed me a picture of a baby with a with a cow's milk protein allergy.  It looked just like my Pikey!  Red scaly patches on his cheeks.  After doing a bit of research, we switched him to Nutramigen, and saw an immediate change.  Hurrah!  Problem solved, right?  I continued breasfeeding with a bit of Nutramigen to supplement and all was swell for about a week.

Enter solids. Rice cereal.  This child's skin exploded.  Red welts all over his body.
Must be the formula in the cereal right?  Bought organic rice flour and mixed in Nutramigen.  No different. We stopped the rice and went to sweet potato.  No problem.  Squash.  OK.  Beans.  Alright. Chicken.  Mild rash. We then stopped new foods. This rash persisted.  I cut out rice from my diet then took him to the pediatrician.  She said "No detergent, or body soap.  Continue with the Nutramigen.  It'll pass." and sent him for an allergy test.

As we waited for the results, we tried apples and pear. Slight rash, not enough to discontinue.

Results:  Highly allergic to wheat.  Mildly allergic to milk and soy.  Low allergy to eggs. 
Recommendation: Delay introduction of peanuts and wheat.  Don't worry he'll grow out of it.  Also, these tests are HIGHLY unreliable.

Great.

So a month later, and he's still on the same restricted diet.  I stopped breastfeeding because it seemed he was having flare-ups from my wheat, rice and dairy consumption.  We've added carrots to the list of known allergens.  Who is allergic to carrots????  SERIOUSLY???  We tried a soy formula just to see if maybe anything had changed.  Child turned purple.  And had hives from head to toe.

Stay tuned...