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Educational savings: The benefits of starting early

December 6, 2022

The next 12 months may be an opportunity to adopt better financial habits—starting with the following 3 resolutions.

1- Make a financial assessment

Whether they're enrolled in public or private school, expect significant expenses. For example:

  • Tablet for distance learning
  • Science supplies
  • Sports equipment
  • Extracurricular, sports and cultural activities
  • School trips

Where did all the money earned during the last year? You can find this rather important information under the My budget tab in AccèsD. Use it to view a graph that groups expenses from the past 12 months by category such as Housing, Food, Telecom services, Retail stores, etc. Click a category to display sub-categories, which is where the exercise becomes really interesting.

Maybe you spend a lot more on restaurant orders than on groceries. What difference would cooking a few more meals a week make to your finances?

« Même les petites sommes comptent. Épargnées de façon régulière, elles s'accumulent. Plus on s'habitue à faire un virement périodique, plus ça devient facile, car on n'a plus à y penser. », développe-t-elle.

Unwrapping your new designer jeans or tech gadget, or spending the day at the spa feels great. But you might not feel as well when you look at how much you’ve spent in the Clothing, Electronics and Entertainment categories. Rather than letting impulse get the best of you, you can plan for these types of purchases or outings.

You can use this information to make a budget - This link will open in a new window. that better reflects your spending habits—and to find room for other great projects.

2- Plan inspiring projects

It’s more motivating to save for a specific goal, like buying a new car, going on a 2-week vacation in another part of Quebec or buying your first home. Once you’ve researched your project costs in detail, you can set up automatic transsfers so that a little money is put aside every paycheque without even thinking about it. The habit sets in, then your savings accumulate and generate interest until the big day.

By calling on a little discipline and a few good tips, you can give yourself the means to indulge in a few pleasures—even when the unexpected happens.

3- Build an emergency fund

For example, by contributing $1,000, you are eligible to receive between $200 and $600, depending on where you live and your net family income. In Quebec, government grants are worth 30% of the amount you invest**.

There are some surprises we’d rather avoid. Surprises like a flat tire on the highway, a refrigerator that stops refrigerating or a smartphone that takes a nosedive down the stairs. Or learning that you have 2 weeks to update your résumé and find a new job.

An emergency fund can cover these types of contingencies without affecting your other plans. This means setting aside enough money to cover all your regular expenses for at least 3 months, even if you’re not working. Since you can’t predict when you’ll need to withdraw your savings, it’s best to put them in an easy-to-access account like a tax-free savings account (TFSA).

Create an emergency fund like you would any other project: set a goal, save with automatic transfers and let time do the rest.

From buying local, to eating organic, to joining a gym, to learning to play an instrument, there’s no shortage of New Year’s resolution ideas, but starting with good financial resolutions is the best way to ensure that you stick to all the others!

For more information or to open an RESP, contact your advisor or see Registered education savings plan - This link will open in a new window..

* Financial planner and mutual fund representative for Desjardins Financial Services Firm Inc.

** The lifetime maximum per beneficiary is $7,200 for federal grants and $3,600 for Quebec grants. Yearly maximums also apply.

***Canadian students, tuition and additional compulsory fees, by level of study / Statistics Canada