Saving for Debt-Free College
Since Sam is our only child, it would be very easy to overindulge him. After all, love wants to give, but Mike and I have been mindful of not playing into the stereotype of the spoiled only child. Sam is very appreciative of whatever is given to him, plus he is kindhearted, generous, and willing to share. In fact, he has been willing to turn what is usually a motherlode of gifts at birthday time into an occasion to give to others. When birthday guests have asked what to bring Sam, by mutual decision we have donated what would have been his to others in less advantageous circumstances. I’ve been proud of Sam’s sweet attitude.
Will Sam always want to give everything away? I don’t think so, nor do I think he should. He’s a kid and of course, and he likes presents—who doesn’t?! But being an only child, he doesn’t want for much. About this time of year, aunts, uncles and grandparents often start asking for holiday gift suggestions for Sam. It can be a little challenging to come up with reasonable ideas.
One of the things that works for many families at gift giving occasions is to choose a less extravagant item the child can enjoy unwrapping and then the gift giver can make a contribution to a college fund. Registered Education Savings Plans (RESPs) are a great way to give a gift that grows. Companies like Heritage Education Funds (in operation since 1965) offer plans that provide financial assistance to a beneficiary (usually a child) when s/he pursues a post-secondary education. Income on savings within an RESP is tax-sheltered until the plan matures. Earnings are taxed in the hands of the student/beneficiary, who typically pays little to none.
Many Canadian families choose the Heritage Education Funds plans because of the pooled fund strategy. That means that all contributions by subscribers are pooled (along with applicable government grants) and invested in various fixed-income, lower risk investments. That would include government bonds and GICs, which typically earn competitive returns.
At young ages, mounds of toys, books, and gift cards can seem exciting. But providing a debt-free, post-secondary education will bring pleasure and appreciation that can last a lifetime.
Heritage is offering a couple of great possibilities with their current contest campaigns. They host an Annual RESP Draw. You have a chance to win one of eight contributions of $2,500 toward a Heritage Education Funds RESP. The draw date is December 31, 2015 and there is no purchase necessary. Visit HeritageRESP.com/WinAnRESP for full contest details.
They also have a social media contest (#ShareHeritage) for an opportunity to win a $100 Mastercard gift card. All you have to do is Tweet or share publicly an image of the front cover of any Heritage Education Funds collateral and/or 2014 marketing material with the hashtag #ShareHeritage between Thursday, January 1st and Thursday, December 31st, 2015 to enter to win. They will draw one lucky winner every quarter of the year!
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