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New baby? Shower mama with RESP contributions

I’m 30, which means I go to a lot of baby showers. And while it’s great to retain and nurture the few women-only rituals in our western culture, most people will agree that they feel a little weird. Since we are already gathered doing unusual things like playing structured games and sitting in a circle waiting our turn to talk, I propose we do something else unusual. Loving friends must start a conversation about money. I’m talking specifically about free government money available to kick-start education savings.
Sure, baby is going to need some story books, but what she needs way more is a Registered Education Savings Plan (RESP). She needs this account to start accumulating interest right away, since BMO estimates the future cost of post-secondary at over $100,000. If baby is born in Alberta, she is eligible for up to $2500 in free grants to get the savings started.
The problem is that as of December 2012, $81 million in federal grants are being left on the table by low-income families. Only 25% of eligible Alberta families are accessing the federal Canada Learning Bond, and this low take-up rate contributes to perpetuating cycles of poverty. Many young families with a single income earner would qualify. The parents at 7 of 10 baby showers don’t know that grant money is out there, and miss out on powerful compounding interest.
So what do you give? Cash, earmarked for the baby’s RESP is a gentle way to nudge a mother with immediate needs on her mind to think about the future. If cash feels uncomfortable, you might give the gift of research and offer to help your friend make the best choice of product for her family. Or, you could take care of the children when your friend makes her appointment to visit a financial institution.
Each of us can be a catalyst for change in the conversation. Next time you get the chance to hold a new baby, ask the parent if they have opened an RESP. Tell them that there is free money available and they don’t have contribute a cent to get it.

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