by Tom Feigs
The acceptance letter has come in from a far-flung University! It’s a proud moment. Then immediately, you wonder if you and your scholar-to-be are ready to tackle the costs that lie ahead.
Dangers lurk if you avoid doing your “homework”. Unexpected costs – difficulty distributing funds among children – running out of funds too early – endless demands on the “bank of Mom and Dad” – overspending goes unchecked – scholarship/grant application deadlines are missed – frustration!
Post-secondary education is an investment of time, energy and money that pays dividends down the road. It’s best to carefully manage this investment to encourage a positive learning experience while making efficient use of funding. Involve your children in the education funding planning process right from the start. Sheltering them from the money realities won’t serve in anyone’s best interests. You may well face a “deer in the headlights” reaction initially but start early and be persistent.
First, create a year-by-year forecast of education funding vs student costs for all children aspiring to attend university. Do this in one comprehensive table, using our Education Funding Worksheet to get you started.
- Identify all current and future income sources available such as Registered Education Savings Plan (RESP), scholarships/bursaries, provincial/territorial assistance, student’s summer employment, student loan, grandparents, etc. http://www.canlearn.ca/eng/planning/after.shtml
- Get to know tuition costs and living expenses. Connect with Student Resources at the institution of choice, comb through their website and talk to current students or alumni. http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/educ50a-eng.htm
- Expect the first year to be the most expensive as you learn the ropes and cover some initial setup and moving expenses.
Next, formulate a semester-by-semester income and spending plan using a simple table of monthly income and expenses. Keep it up-to-date and ensure everyone involved is engaged. Use this Education Month-to-Month Worksheet to stay on track.
- Establish a reasonable cost-sharing arrangement with your university bound children and communicate clear expectations upfront. An informed and involved student is more likely to make good spending choices and even complete their studies on schedule!
- Offer to help apply for scholarships and bursaries
- Explain the danger of using credit cards and the ugly consequences of debt
- Most importantly, always offer guidance with open communication and positive reinforcement
Creating clarity in an educational funding plan mitigates the pressures of financing education and helps develop financial savvy young adults. Remember to update the plan as things change and evolve throughout your child’s educational years.
Academic and financial growth are priceless; now is the time to learn and grow with your scholar-to-be!
Related Resources:
Podcast – Young People and Money