Financial literacy is an essential skill that helps children develop money management skills, promotes financial independence, and enables them to make informed financial decisions. It is important for children to learn about Financial concepts and principles at an early age to set them up for financial success as adults. The lack of financial education is
Parents Don’t Know the Full Costs of Post-Secondary and Don’t Have a Written Plan – Says Ipsos and Knowledge First Financial
Recent findings from an Education Savings Week Ipsos1 Survey commissioned by Knowledge First Financial found that Canadian parents do not know the full cost of a post-secondary education. Two-thirds of parents of children aged 12 and under say they know the anticipated cost of post-secondary education yet, when presented with the average total cost of a four-year undergraduate degree based on their child’s year of birth, a significant majority (73%) are surprised by the costs.
Parents underestimated post-secondary tuition costs by up to 27%, and by 49-60% when additional costs, including residence, were factored in. New parents with children born this year (2018) can expect to pay $124,956 (including residence) for a four-year degree when they head off to school in 2036.2
“We found that the majority of parents accounted for tuition and textbooks, but missed other key costs,” stated George Hopkinson, CEO, Knowledge First Financial. Only 16% accounted for visits home, 37% accounted for residence or accommodation and less than half (42%) accounted for transportation. Once informed of the projected costs of education, 75% of parents said they plan to increase their education savings goal.
“Parents may have a Registered Education Savings Plan (RESP) for their child, but 55% don’t have a written plan on how to reach their savings goals.” Knowledge First Financial, Canada’s largest RESP Company, educates and encourages parents to think about the future. “We have over 1,400 RESP specialists in Canada who know the future costs of education and can provide advice and a written plan that is unique to each family’s situation,” added Hopkinson.
Part of this advice includes how to maximize grants like the Canada Education Savings Grant (CESG), a 20% to 40% matching grant up to $7,200 from the Canadian government based on contributions and income level. 2018 marks the 20th anniversary of the CESG, which is recognized during Education Savings Week (November 18-24, 2018).
About Knowledge First Financial
Canadian families have relied on education savings plans offered by Knowledge First Financial for more than 50 years. Since 1965, payments from the plans have reached $6.6 billion and the Knowledge First Foundation has further enhanced Education Assistance Payments to students by over $50 million. Today, the company manages $6.4 billion in assets for more than 500,000 RESPs.
Knowledge First Financial Inc. is a wholly-owned subsidiary of the Foundation and is the investment fund manager, administrator and distributor of Registered Education Savings Plans. Knowledge First Foundation is a not-for-profit Canadian corporation with no share capital. The Foundation is therefore able to reinvest excess revenues in initiatives that support students, such as the Knowledge First Financial Graduate Scholarship Awards.
A good lesson for children to learn early on is the power of saving. That $20 bill Grandma gave them can supplement their allowance, allowing for a bigger purchase in the future if they save it now. To help demonstrate the benefit of saving, brainstorm some ideas with your child about what they might want
You can kickstart financial literacy at home with books designed for every age to teach your kids the ins and outs of money management.
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