Despite ongoing cost-of-living pressures, millennial parents are finding ways to set money aside for their children’s future, according to a new survey from education savings company Embark Student Corp.
Seventy-three per cent of the survey’s respondents — 90 per cent of whom are millennials — said they have opened a registered education savings plan (RESP) for their child, and 36 per cent have more than $5,000 already saved.
And yet, a majority of the parents surveyed said they still feel financially unprepared.
Twenty-seven per cent of respondents said they will not be able to afford their child’s post-secondary education, while 26 per cent said covering such costs will be financially tight. Only 33 per cent said they were fully confident in their ability to cover educational costs.
“They’re absolutely not confident because what they see in the news and what they hear every day is that prices are going up higher and higher into unprecedented territory,” said Andrew Lo, chief executive of Embark.
Leaving educational priorities aside, expecting parents expressed concern about their financial preparedness in general, Embark said.
Fifty-four per cent of soon-to-be-parents said they were only somewhat prepared for the cost of having a child, with the least prepared being in Ontario (67 per cent).
The survey also said that more than a third of new parents (36 per cent) reported receiving financial support from their family, with 21 per cent saying the help was a one-time occurrence and 16 per cent receiving ongoing help. New parents in B.C. were the least likely to get financial help from family, at 69 per cent.
Still, despite uncertainty about their own finances, millennial parents are placing their children’s future at the centre of their planning.
“Making sure their kids are positioned for success is a very, very high priority. It’s a higher priority than their own financial health,” said Lo.
Lo believes pre-planning and setting up automatic deposits into savings accounts helps new parents build a fund that their children can rely on for their educational costs.
“I think it’s all about planning. What are your monthly expenses going to be? How much money are you going to save and put away?” said Lo. “Try to make it automatic before the (child) arrives so that it’s easier and something you don’t have to worry about.”
The findings in Embark’s Early Parent Readiness Report are based on surveys of new and expecting parents across Canada, conducted by Angus Reid.
