Continuing on with my discussions about the relative cost of school and such, I have found another interesting example for all of those parents out there that are wondering, “Should I start saving for my child’s post-secondary education ?”. I have already scratch this topic a little with, So That is What $50,000 looks Like, but read on, it will be entertaining.
First, a question: What does $350 look like at University (or to a parent of a child who is at College/University) ? Look at the picture on the right hand side of this, those two books. Those two books represent $350 or so in costs (the computer on top of the books is a lot more).
Big deal, says you? Yes, maybe that isn’t that expensive, except those two books are for only 1 course, and in some programs like Engineering or Computer Science there can be many courses with many very high-priced texts. A good number to remember is typically programs have at least 5 courses per term, with two terms a year and a four-year program, you have about 40 course sections that could have some expensive books to buy (or even more interesting expensive lab fees).
More numbers for thought would be that the Basic CESG (grant for your RESP) for a year is $500 (if you have max’ed out your deposits to your child’s RESP), so these two books pretty much almost ate that whole grant.
Do you still think an RESP is something that can wait for when your child gets older?
I’m doing my MBA now (at 40) and have found that textbooks are very expensive but often you can find the ‘indian’ or ‘international’ edition of the same textbook printed on less expensive stock but with the same content/pagination etc as the north american edition for about 40% of the cost, even once you include shipping. Not all books are done this way, but a surprisingly large number are.
I can’t overstate how great RESP’s have been for us. As our eldest goes through univeristy, it’s kept the financial impact to a minimum. As our second child approaches university, we’re expecting to be able to get them through undergrad without much financial strain either.
The RESP’s are our share of their university education. We’ve made them save their share by working in hish school as well. That means we’re not paying ‘their’ share either.
Between RESP’s, and their savings, they should be able to get through undergrad with no debt.
As for the cost of textbooks, in the late 90’s I ran a bookstore for actuaries (back when I was writing those exams). And the people making the money off of textbooks are not the retailers selling the books, and it’s not the authors. Authors are paid a pittance, gross markup on textbooks for retailers is 20% – and that’s if they don’t discount.
OK so you are saying I should open an E-Publishing house, because that is where the 💰 is? OK, thanks for the tip Glenn!
I remember we had to buy new “programming” texts every year at U of W, but I still have them (I think I may even have my COBOL programming book).
Back in my university days, a few “mandatory” books cost close to $200 and they were not thick books. These publishers are making a killing!
Very glad that we started RESP for our son when he was less than 3 months old. 🙂
I agree with BCM. If you plan to contribute financially to your child’s post-secondary education, an RESP is something that should be started ASAP to take advantage of growth.
Child #1 is ~6.75 years old, have been contributing to his RESP since birth to get the maximum CESG match. The (Contribution+CESG+Growth) breakdown is approximately (16875+3375+7750). The CESG+Growth is now around 40% of the value of the account (80% equity/20% fixed income).
Child #2 will be arriving in October. We will be taking advantage of the calendar year rules for RESP contributions and making a full year’s contributions shortly after she is born.
Even with the RESP’s being maxed out, I suspect that it will only cover a little more than 3 years of post-secondary.
Interesting… I have a few books on my shelf from mid 90’s when I was taking engineering. What I find interesting is that the price of books hasn’t changed much. I have a least 2 on the shelf that were over the $200 mark… That said, both are still on the shelf and have many dog ears and post it notes added 😉 Nothing comes close to having good reference materials. So back to your question – Do you still think an RESP is something that can wait for when your child gets older? Answer had better be NO! – Cheers.