More than 25% of Canadian parents won’t be able to afford kids’ postsecondary costs, survey finds

Open this photo in gallery:Natalie Gomez with her youngest child Juleo at their home in Brampton, Ont., on Monday.Sammy Kogan/The Globe and MailShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountWhen Natalie Gomez first became a mother, she began checking off the usual steps to save for her children’s future. The Mississauga resident enrolled them in a registered education savings plan, made regular monthly contributions and set up a life insurance policy.But a fast-changing job market and the potential for artificial intelligence to upend postsecondary education have also made it important for the mother of two to ramp up investments and focus on budgeting for extracurriculars early on.“You never know what could happen when they grow up,“ Ms. Gomez said. “So I try to instill in them, ‘Let’s be smart, because then you could do whatever you want to do.’”Alongside long-term saving, Ms. Gomez and her husband spend about $700 a year to put their children, ages 3 and 5, in early reading and writing extracurriculars, as well as sports programs.That’s in addition to contributing roughly $600 a month across RESPs, a life insurance plan that accrues interest over time and high-interest savings accounts. “They have pretty much four bank accounts that are making them money,” Ms. Gomez said.Open this photo in gallery:Ms. Gomez plays with Juleo at their home.Sammy Kogan/The Globe and MailWhile planning for a child’s future has always involved unknowns, today it often means setting aside even more money to hedge against uncertainty. But for many parents, a savings strategy like the Gomezes’ is well out of reach.An Embark Student Corp. survey released Tuesday found that just under a third of surveyed parents said they’re confident they can fully cover the cost of postsecondary education, while 27 per cent said they won’t be able to. The survey was conducted online between March 10 and 15 across a sample of Canadian residents who are members of the Angus Reid Forum, between the ages of 18 and 50, and are either parents or future parents. Meanwhile, the cost of education is rising. According to Royal Bank of Canada data released this month, postsecondary education in Canada can cost more than $30,000 a year when tuition, rent, food, transportation and books are factored in.Parents have long leaned on RESPs to plan for their children’s future. These tax-sheltered investment accounts allow parents to contribute a lifetime maximum of $50,000 a child and benefit from the Canada Education Savings Grant, a federal program that matches 20 per cent annually on parents’ contributions up to a yearly maximum of $500, up to a lifetime total of $7,200.Opinion: Kids are expensive. Three steps for parents looking to avoid money fightsNearly three-quarters of parents surveyed by Embark have opened an RESP. But relying on these investment vehicles alone is not enough to instill financial confidence in parents, many of whom are trying to balance immediate expenses such as mortgage payments while investing enough to cover the cost of education.“The optimal figure is to save $2,500 in the RESP to collect the maximum grant,” said Andrew Lo, chief executive officer of Embark. If parents invest the contribution with the grant properly, he said, they can end up with more than $100,000 by the time their child is 18, “which is a full ride to a four-year university program.”But, he said, “what we’re finding from our data is that parents are saving…

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