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Top 5 Reasons Parents Should Start an RESP Early

Jun 9, 2025

Top 5 Reasons Parents Should Start an RESP Early

Saving for your child’s future education might seem far off, especially when they’re just toddlers or even newborns. But the truth is, starting early can make a huge difference in how much you save and how easily you reach your goals. An education savings plan like the Registered Education Savings Plan (RESP) is one of the best tools parents have to prepare for the rising costs of post-secondary education. In this article, we’ll look at the top five reasons why parents should start an RESP early to give their kids the best financial head start possible.

What Is an Education Savings Plan?

Before diving into the benefits, it helps to understand what an education savings plan really is. An RESP is a special savings account designed to help parents save money for their child’s education after high school. The Canadian government supports these accounts by adding grants to your contributions, which means your money can grow faster. The earlier you start an RESP, the more time your savings have to benefit from compound interest and government incentives. Now, let’s explore the top reasons to start early.

1. Maximize Government Grants

One of the biggest advantages of an education savings plan is the Canadian government’s contribution. When you put money into an RESP, the government adds the Canada Education Savings Grant (CESG), which matches 20% of your annual contributions up to a certain limit. Starting early means you can take full advantage of these grants over many years, adding thousands of dollars to your child’s education fund without extra cost to you.

2. Benefit from Compound Growth

The power of compound interest is one of the strongest reasons to start your education savings plan early. Compound interest means you earn interest on your initial money as well as the interest it has already earned. Over time, this “interest on interest” effect can significantly increase your savings. The earlier you begin, the longer your money has to grow, giving you a bigger nest egg when your child is ready for college or university.

3. Lower Financial Stress Later

Saving for education can feel overwhelming if you start late and try to put together a large sum quickly. Starting an RESP early breaks down this challenge into smaller, more manageable contributions. This steady saving reduces financial stress and helps you avoid last-minute scrambling for funds when tuition deadlines approach. An early education savings plan means you can budget comfortably and feel confident about your child’s education future.

4. Flexibility in Education Choices

An education savings plan is not limited to just university. It can be used for many types of post-secondary education, including college, trade schools, and apprenticeship programs. By starting early, you give your child the freedom to explore different career paths without worrying about money. Having funds ready in an RESP opens doors and provides more options, which can be priceless in today’s diverse education landscape.

5. Encourages Good Financial Habits

Starting an RESP early sets a great example for your child about the importance of saving and planning for the future. It shows them that education is valuable and worth investing in. Plus, as your child grows, you can involve them in learning about money management and goal setting. This early financial education can have lifelong benefits, helping your child become responsible with money as they move into adulthood.

Conclusion: Start Your Education Savings Plan Today

An education savings plan like an RESP is a powerful tool for parents who want to support their children’s future education. By starting early, you maximize government grants, benefit from compound growth, reduce financial stress, provide education flexibility, and encourage strong financial habits. The sooner you begin, the more secure and prepared your child will be when it’s time to take the next big step into their post-secondary journey. So why wait? Start your child’s education savings plan today and watch their future possibilities grow.