Knowledge First Financial – Canada’s largest RESP company with not-for-profit ownership – conducted a new study on the effects COVID-19 has had on the education experience across the nation. Overwhelmingly, Canadian parents say that saving for their child’s post-secondary education is important yet more than 4 in 10 report COVID-19 has had a negative impact on their ability to save for their child’s post-secondary education.
This Education Savings Week (November 15-21), Knowledge First Financial wants Canadians to know that they understand the impact COVID-19 has had on their ability to save for their child’s post-secondary education and want to use this week to show parents that investing in their child’s future has a plethora of benefits.
“COVID-19 is having a serious impact on student learning and Canadian parents’ ability to save,” said Carrie Russell, President and CEO, Knowledge First Financial. “While we know parents are facing multiple challenges, there is one simple way to help prepare their child for post-secondary education. Investing early, even if it is a small amount, can make a significant impact down the road.”
Saving for a child’s post-secondary education has become challenging for parents across Canada due to the pandemic. The impact of COVID-19 has further affected the quality of education for students with missed educational milestones and decreased motivation to do school work. Data from Knowledge First Financial’s study of Canadian parents with school-age children show:
- One-third of Canadians state that COVID-19 has already had a negative impact on their ability to pay for their child’s post-secondary education
- 1 in 4 Canadian parents are considering a change in plans for their children’s post-secondary education because of the pandemic.
- Canadian parents agree (75%) that COVID-19 has had an impact on the quality of their child’s education
- Well over half (61%) of parents say their children’s stress levels have increased since COVID-19, and 76% report their children socializing less
- 79% are concerned about the prolonged impact of COVID-19 on their child’s educational development, with 42% noting that their children are falling behind on core competencies in reading, writing and math, and 36% reporting a negative impact on grades
- 45% report their children are less motivated to do their school work than before COVID-19 – this remains the #1 challenge for over one third of parents when it comes to their child’s education
- 45% of parents have children who were disappointed about missing educational milestones due to COVID-19
“For the last 55 years, we have committed to educate and help families across Canada save for their child’s future and we know that the pandemic has made this difficult for some parents,” said Russell. “Half of Canadians worry about being able to save for their child’s post-secondary education if COVID-19 persists. We want to ease parental worries and student stress by showing them how flexible, versatile and beneficial RESPs are.”
Canadians who own a RESP can maximize their savings with government grants as RESPs are the only savings eligible for incentives like the Canada Education Savings Grant (CESG) worth up to $7,200 per child. Parents can defer taxes of up to $50,000 per child on RESPs and for children who decide not to pursue post-secondary education, the savings can be used towards RRSP’s depending on contribution limits. Knowledge First Financial recommends starting early as it means more savings in the end and the sooner owners can take advantage of government grants and compound growth. However, those with older children are still encouraged to open a RESP as owners will still reap the benefits.
To further enhance Education Savings Week, Knowledge First Financial has partnered with Kathy Buckworth, a family and financial expert, to develop a list of ‘Parenting Win’ tips for Education Savings Week to make saving an enjoyable experience for both parents and children:
- Create a chore chart or wheel for allowance payouts. Make this the only way kids can earn money to teach them that effort equals reward. Each chore can equal a different allowance payout. Have the kids spin the chore wheel to see what work they will be doing and how much they will earn that week! Or include a goal (i.e. a video game), and the number of times a certain chore must be performed to reach that goal. For example, shovel the driveway three times, vacuum the living room, do a load of laundry equals reward!
- Use a clear savings jar instead of a piggy bank so they can watch their savings grow. Encourage your kids to save their money instead of spending and for every month they save, add a toonie to teach them about interest!
- Play board games that include a money component. Monopoly will teach them about risk, investment, return and rent. The Game of Life or PayDay is great for practicing income versus expense math.
RESPs are not just for parents – grandparents, caregivers and guardians also have the opportunity to open a RESP to save for a student’s future. Education Savings Week is the perfect time to jumpstart or continue saving goals. Though investing may look different today than a year ago, a little goes a long way and those who save will profit from the government grants and tax-benefits. Canadians who open a $1,000 RESP with Knowledge First Financial will get a complimentary activity box from Curiosity Box Kids to keep kids entertained while parents plan for education wins tomorrow. To open a RESP with Knowledge First Financial visit: knowledgefirstfinancial.ca
Findings of the online survey conducted by Phase5® for Knowledge First Financial from November 9, 2020 to November 13, 2020 with a nationally representative sample of 1,000 Canadians.
SOURCE Knowledge First Financial