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Saving for postsecondary education A painless gift that has far reaching benefits


Plan now to get that RESP up and running! It can make a big difference in the future. Dianne Szelag


education. When I hear the complaints of students bearing heavy loads of student debt, I feel a bit sorry for them, as I put some of the blame squarely on the shoulders of their parents. Tese parents could readily have reduced that debt burden long ago by starting a Registered Education Savings Program for their children early in life. RESP has been around since the 1970s. Yet many families


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still do participate in the program. Monies paid into an RESP are administered by a promoter (usually a financial institution), who applies for a Canada Education Savings Grant (CESG) on behalf of the beneficiary. Te beneficiary must have a social insurance number to qualify for the grant. So the parents must first apply for a SIN for their child prior to setting up a plan. Te grant amounts to 20% per beneficiary per calendar


year up to a maximum of $500 (or $1,000 if there is unused grant room from a previous year). Tere is a lifetime grant limit of $7,200 (achieved for $36,000 of contributions). Tere is a lifetime cap of contributions per beneficiary of $50,000.


ith the approach of fall and the prospect of send- ing children off to school, parents’ thoughts often turn to funding their children’s post secondary


Limitations on the availability of the CESG occur when the beneficiary is between the ages of 15 to 17. Also, for families with net income of $87,907 or less in


2014, they may be eligible for an extra 10% or 20% on every dollar of the first $500 they save in their child’s RESP each year. Low income families need not contribute anything to


acquire up to $2,000 from the Canada Learning Bond program. If the parents are eligible for the National Child Benefit Supplement (this supplement is in addition to the Canada Child Tax Benefit), they can open an RESP and apply for the Canada Learning Bond. Te Government of Canada will deposit $25 to cover the cost of opening the RESP and deposit $500 immediately. Ten an extra $100 per year will be added for 15 years. Tis could make an enormous difference in 18 years. Many low income families are not taking advantage of this great program because they do not know about it. Here is an example of how powerful an RESP program


can be for the average family. Suppose you were to start sav- ing in a regular RESP when the child is first born. Assume a 7% rate of return on the investments inside the RESP. Contribute $100 per month for 18 years. Te fund, plus grants, will have accumulated about $54,000. Tis would be sufficient to fund a basic four year program costing $5,000/


year today. Contributing monthly makes the process very painless. Tese contributions are not mandatory and can be adjusted or stopped anytime. Te proceeds of an RESP must be used for education


within 35 years of the plan being established. Some par- ents are concerned that their child may not attend post secondary education and therefore the funds will be wasted. RESPs offer a great deal of flexibility. With multiple siblings, a family plan is the best option as any beneficiary can use the proceeds of the plan. Normally, withdrawals from the plan are designated from the grant portion first. Tis ensures that only the principal portion remains. Te principal portion can be withdrawn by the subscriber without penalty. However, some capital gains tax may apply depending on the content of the plan. Te subscriber can also transfer the proceeds to their RRSP if they have suf- ficient RRSP contribution room. Tis is limited to $40,000. So, if you are lucky enough to have grandchildren,


encourage their parents to open an RESP if they have not already done so. If affordable, make regular contributions of your own as a priceless gift to your grandchildren. Or make an annual gift for a special occasion. It is not as much fun as a shiny new toy but you can make a gift that keeps on giving.


find trying to keep up with the latest and greatest, as well as the best priced items, presents challenges you would rather live without. Not only do you feel you


Sewing your own fashion trends I


t seems at times, trying to put together a fashion-work-worthy outfit can seem like another job all in itself. You may


Now there are other ways of achieving


the Paris or New York look if you are ad- venturous and creative. You can sew your own outfits and better yet, take patterns and make them your own. This past summer, I was


must find a least a few trendy items each season, but finding them to suit your body type as well as well as your color scheme can seem daunting. Fall brings about the biggest fashion season of the year, complete with fashion shows all over the world. We are not talking about the


world at the moment, but what about being able to put together a few outfits that scream “Put together by a designer” without the price tag...Now that is something to pay attention to, after all you work hard for your money. Luckily, stores pay attention to fashion


week to see what created a frenzy of sorts in the market. Once the popular styles are identified, knock offs are made and begin to appear in the department stores at a much lower cost.


14 Smart Biz


In Vogue Ally Champagne


privileged to attend a grade 12 graduation at the Fair- mont. Young ladies dressed in all types of gowns filled the lobby. I was intrigued by a particular gown which the graduate had made herself. It was intricate, unique and a work of art. Tis made me think as to how many young women sew


in this day and age? When my mother was a child, her mother made all her children’s cloth- ing from hand-me downs given


to them. Tey needed to back then because times were difficult and she had 15 kids. If you are interested in sewing, buying a


sewing machine is a good investment, or perhaps borrowing your mother’s. Look through the trending fashion mags on line and in the drugstores. As you peruse, cut out a few items you would like to make. Once you have a chosen item, take it


Unleash your inner fashionista designer in you.


down to a fabric shop. Look through the pattern magazines to see if you can find something that resembles your item of choice. Tere are people who work in these stores who can help you once you have found a pattern, to choose the best material, and advise you on the best way to proceed. Many fabric shops offer sewing classes,


which you attend and are instructed in how to devise a creation. You might start making a tote bag with appliqués or a small baby blanket, it will depend on your sewing skills and what level you are - beginner to


www.smartbizwpg.com


intermediate. I have had the opportunity to make many


items which may have not been designer worthy, but nevertheless I loved to wear them at events and gatherings. I was always very proud of my creations and the work I put in them. So perhaps it is time to discover the lit-


tle fashionista designer in you. If you have a yearning to create, get thee to the fabric shops. Who knows what great original outfit is waiting to be released from your little in- ner seamstress? Good luck...


November 2015


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