Parents being stretched thin saving up for children's education: survey

Many Canadian parents are stretching themselves thin — even going as far as to postpone their retirement in some cases — in order to help pay for their children’s education, according to a new survey. 

The poll of 1,000 Canadians with at least one child revealed that 81 per cent of parents believe it is their duty to help their children pay for their post-secondary education.

Fifty-two per cent of parents who participated in the online survey by Léger and Embark, an education savings and planning company, said they would go into debt and 61 per cent said they would be willing to postpone their retirement in order to do so.

RISING COSTS MAKING IT HARDER FOR PARENTS TO SAVE

However, Andrew Lo, president and CEO of Embark, said that while many parents want to help their children pursue post-secondary education, the rising cost of living has made it harder for them to set aside money to achieve that goal.

“We surveyed across Canada and found that while people are very highly motivated to save for their children's education, economic realities make it a difficult choice for them,” Lo told CTVNews.ca in a phone interview.

Seventy-three per cent of parents polled said it’s been harder to save for their children’s education with prices and living expenses going up and 40 per cent said they’ve stopped saving for their child’s education altogether because of how much everything is costing them.

The cost of paying for a child’s post-secondary education is playing a role in how many children Canadians are having as well, the survey found, with 42 per cent of parents saying the price tag attached to sending a child off to university or college either has influenced or will influence the number of children they have.

TIPS FOR PARENTS

The survey also revealed that 62 per cent of parents think saving for their children’s education can be overwhelming at times.

Lo said there are a few steps that parents can take to set their children up for success while also minimizing their financial stress.

First, he said parents should figure out how much post-secondary education costs and what they are willing and able to pay for it.

“A few dollars a month will make a big difference,” he said, adding that parents should begin saving as early as possible, allowing their savings to grow over time. .

If they haven’t already, Lo recommended starting a registered education savings plan (RESP).

An RESP is a long-term savings plan to help people save for a child's education after high school. Parents and grandparents can contribute money to an RESP at any time — up to a total of $50,000 per child.

“When you invest money in this instrument, it grows tax free, so the income you earn from the investment grows tax free (until it’s withdrawn). The government grants coming in also can grow tax free. And that money is essentially free,” Lo explained.

Asking loved ones for monetary gifts for a child’s birthday and other holidays is another way Lo said parents can collect contributions for a child’s RESP.

Lo noted that Embark recently launched a digital platform to help parents calculate how much money they should be saving up until their child turns 18, keep track of their RESP contributions and access government grants for a percentage of their investment contributions.

Financial advisors can also offer advice to parents who are looking to begin saving for their child’s post-secondary education.

When it comes to making any financial decision, Lo emphasized the importance of doing your research and getting help when you need it.

“Knowledge is power,” Lo said.

METHODOLOGY

An online survey of 1,000 Canadians parents with at least one child under the age of 18 in the household was completed between May 5 and 12 using Leger’s online panel.

No margin of error can be associated with a non-probability sample like a web panel in this case. For comparative purposes, though, a probability sample of 1,000 respondents would have a margin of error of ±3.0 percentage points, 19 times out of 20.