My three kids chose different educational paths. How do I withdraw RESP funds in a way that’s fair to them and avoids unnecessary taxes? + MORE Sep 4th

Q. I have a registered education savings plan (RESP) for my three children, the youngest of whom is starting university this fall. We have made some withdrawals for the older two kids but the plan is still well-funded. Our middle child has decided to pursue a co-op university program, which is essentially self-funded. When we contributed funds to the plan, part of the funds were put aside under his name and the government added grants to that. To be fair to him (and to avoid taxes), I assume there is a minimum amount that I should withdraw as an educational assistance payment (EAP) for him. What are my next steps? –Paul

A. Congrats on thinking ahead, Paul. And you’re correct: There is likely a minimum educational assistance payment (EAP) withdrawal you’ll want to make, which will benefit you both. That amount depends on how fully funded your RESP is.  

As a reminder, the EAP is made up of the government grant (up to a maximum of $7,200) and the accumulated earnings on both your contributions and the grant itself…

Registered education savings plans (RESPs) are the best way to save for a child’s post-secondary education. Contributions attract government grants, and the accounts grow tax-deferred. Withdrawals can be used for trade school, college or university funding in Canada and abroad.

According to Statistics Canada, the average cost of undergraduate tuition nationally for the 2022/2023 school year was $6,834 per year. The costs can be greater or smaller depending on the program of study, and tuition represents only a portion of the total cost of post-secondary education. In fact, the data shows a four-year university program can cost $96,004 for a student living on campus and $48,074 for a student living at home.

In contrast, the average RESP balance for children aged 14 to 17 was $22,180 at the end of 2019. That’s enough to fund approximately one quarter to one half of the cost of a typical four-year university program. What should parents do to close the gap?

MoneySense’s Student Money Guide
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What if the RESP falls short of covering education costs?

Planning for RESP withdrawals can be more art than science…

Let’s face it—life as a student can be challenging. You have to pay for tuition and textbooks (and housing, food and more for those not living at home); combine that with not having a full-time income, and the need for extra money is real. If you don’t want to feel constantly strapped for cash, consider these tips to make some dough, keep spending in control, crush your savings goals and tackle student loan debt early.

How to make money as a student 

Here are several ways you can earn some extra money on the side while juggling school.

Pick up a part-time job

One of the most common ways to access extra money is having a part-time job. Consider working in retail or at a restaurant, or getting a seasonal job, where you can work at a tourist attraction or resort. Having a summer job is a great way to obtain professional skills while enjoying time off of school and having a lighter course load. 

When I was in university, I worked on campus as a teaching assistant and a research assistant…

Recent graduates and other young people face competing financial priorities. Once you join the workforce, it’s understandable if you want to shed the student lifestyle and live a little. But at some point, you’ll need to decide what to do with extra cash flow: invest or pay back student loans. Like many things in personal finance, it depends on your situation—including what type of student loans you have.

Investing vs. debt repayment

The financial industry spends a lot more time talking about investing than debt repayment, so that can be an enticement to start building an investment portfolio. Investing has become more gamified as well, and many young people know someone—perhaps indirectly through social media—who has made it rich investing in meme stocks, cryptocurrencies or NFTs. This can lead to a fear of missing out.

The truth is that most investors make money slowly over time, and even the professionals have a tough time keeping pace with stock market returns, let alone beating the market…

Pursuing post-secondary education can help you land your dream job. But obtaining a degree or certificate comes at a cost, in the form of student loans. In fact, the average Canadian takes 10 years to pay off student debt.

According to Statistics Canada, Canadian students enrolled in a full-time undergraduate program shelled out an average of $6,834 in tuition costs for the 2022/2023 academic year, and graduate students paid an average of $7,437. If you live away from home, you might need loans to cover housing costs, too. Over a typical four-year program, that can mean shouldering tens of thousands of dollars of debt.

So, how can you pay off your student loan debt? We break down the types of student loans, repayment strategies, and how you can balance this obligation with other priorities.

How to pay off your student loans

Here are several key factors to consider when making a plan to pay off your student debt.

1. Tally up your student loans

You may have one type of student loan or a mix of a few…