If you are a parent, you likely have thought and worried about how you are going to pay for your children’s education later down the line, especially if you have multiple children. With the outrageous costs of schooling these days, it can be even more stressful when you realize that the prices are most likely going to go up even further than what they are today. For this reason, most parents or legal guardians decide to put away money in an account for their kids Heritage Education Funds in the future in the form of RESP’s, which are registered education savings plans.
Not only is it a great idea to plan ahead and to start putting away a bit of money each money towards your overall goal of saving up enough money to pay for your children’s education, but there are some inherent advantages of setting up a registered education savings plan as well. For starters, younger people are taxed much less money than adults are, so these plans are set up to basically function as a holding account for money that a parent feeds into. Once the child is old enough to receive the fund and cash it out for payment for college, they will be able to transfer the money to the child’s bank account, which ultimately gets taxed at the rate that a younger person would get taxed for, which is dramatically less in the long run. While this may not seem like a huge deal, the tax savings can add up to thousands of dollars and is a big drawing factor for a lot of parents, who want to save as much money as humanly possible.
There are a handful of companies that offer these types of RESP accounts, and you can check out their individual plans, and consider which one best fits your needs. The various plans out there have proven to provide a great service for saving for college and many people have stated that their savings accounts helped them put their kids through college in a much easier way. If you want to be proactive and think of the long term success of your children, you should absolutely consider opening up a savings account for their future college funds. Even if your child winds up not wanting to go to college, they will still be able to cash out the account and can use that money to get a head start in life.