There are a few sources you can turn to in order to finance your education, aside from the money you save up for yourself. To get a head start, read about the various ways you can make your money work for you.

Investments

Investments are a great way that you and your parents can start saving for your education. The details of the exact mix of investments for your portfolio are best left to your family financial advisor. However, the general rule of thumb is to diversify, lower your risk (i.e. don’t invest in sectors that fluctuate a lot) and invest in terms of when you will be withdrawing the money (typically between age 18-23).

If you get a part time job when you are in high school, don’t use your entire salary for spending money right away. Put a little bit away each pay check; every small contribution helps when it comes to paying for your education. Tuition fees are already astronomical and are still on the rise. Making a small portion of your earnings part of your savings portfolio is a smart move.

Savings portfolio

Typical investments for a savings portfolio include:

• Mutual funds
• Stocks
• Bonds
• Guaranteed Investment Certificates (GICs)
• High interest savings accounts

Registered Education Savings Plans (RESPs)

The Canadian government also has a special program designed especially for saving for your education called the Registered Education Savings Plan (RESP).

• Any money invested as well as any interest or growth built up in an RESP is sheltered from taxes until the time you withdraw the money.
• Each year, parents, loved ones and friends can invest in your future by contributing up to $4,000.00 to your account ($50,000 lifetime maximum).
• Plus, to sweeten the deal, the government will add up to $400.00 to your contribution; that’s 20% of the first $2500.00 invested in your plan each year ($7,200.00 lifetime maximum).
• Many financial institutions have RESP programs and RESP-geared investments. An Internet search or a visit with your financial planner will allow you to explore the various options you have.

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