Single Step Financial Improvement Challenge – Set Up RESP Account

by Mike Holman

We got tagged a while back by (I think?) Prime Time Money, for the Single Step Personal Finance Challenge put together by Finance Freelance Life.  The idea of the challenge is to do something, anything however big or small to improve your finances.  Do you need a will? Are you paying too much for your chequing account?  Do you have a jar of change that needs sorting?  Changing something for the better will get you started (or finished as the case may be) to great finances.

Before I get into the single step that I took – check out Prime Time Money’s financial rap video – it doesn’t get much better than that!

On with the challenge!

As most of you know, my wife and I recently had another child so one of our financial goals was to set up an RESP account for her.  RESP stands for registered education savings plan which is similar to the 529 plan in the US.  RESP accounts can be either individual – for one child or family – for multiple kids.  As I discussed in a previous post, there really isn’t a huge difference in either the individual or family resp. I had considered going with 2 individual accounts because it would be easier to figure out who had what money – but then I also decided that simplification is a worthy goal and went with the family plan since there is only one account involved.  The paperwork was a bit of a pain since I had to set up the new account and transfer our son’s individual account to the family account as well.  However, now that it is set up, I don’t have to do anything and it’s all taken care of.

I’m going to challenge you, the readers to think of something you can do to improve your finances – it will probably be something you have been putting off…feel free to let us know what you are planning in the comments!

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{ 8 comments… read them below or add one }

1 Mrs. Micah

Great choice! I know my cousins really appreciate their RESPs. 🙂

2 Mr. Cheap

I think setting up a family plan is a good choice too. If you keep them separate and one account outperforms the other, that might be awkward too (“sorry kid, your sister can go to a better school than you because you had a rough couple of years in the market”).

3 eps

In a family account you run the risk of the older ones using up the funds and leaving the youngest with whatevers left. “Sorry Timmy, your big brother used up all the money so theres none left for you. Off to the acid mines.”

4 Mr. Cheap

eps: very true.

5 Four Pillars

RESPs rock!

Cheap – you’re right!

Eps – it is up to the account owners (ie the parents) how to dole out the funds so if all the money gets spent on the first child then that is bad money management!

Mike

6 Lisa

RESP – Individual (non-family) Plan is an interesting one. RESP was essentially to benefit parent and family, but this one is for non-family, more so there is no age limit.

Lisa
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7 Shelly

Hi Four Pillars,

Do you still recommend the TD E-series mentioned in your previous post? I followed your link for the couch potatoe portfolio and noticed the date of the article was back in 2006. Is the portfolio still relevant in today’s economy or do you have any other suggestions? This is my first DIY attempt. Please help!

Thanks!

Shelly

8 Four Pillars

Hi Shelly – the TD e-series funds are still the lowest cost/easiest way to do the couch potato.

I think that method is still a good one. If anything someone investing in equities for the first time should be very aware that stocks go down as well as up.

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