Book Review and Giveaway: The RESP Book

Saving for your child’s education will likely improve the odds that she will participate in post-secondary education by diminishing financial barriers and building a financial nest egg.

~ Mike Holman

Whenever I was looking for detailed information about RESPs, I would always end up at Mike Holman’s blog. It used to be called Four Pillars, but the name has since changed to Money Smarts Blog. Mike’s always had a very comprehensive section on RESPs on his site and it was my go-to reference on the topic.

Still, I’m a huge fan of physical books rather than their cyberspace cousins and I wished I could have a concise book about RESPs on hand to use as a reference. It’s so easy to forget the details of relatively complex financial products like RESPs given that you likely don’t revisit them more than once or twice a year. I really like having Gordon Pape’s TFSA Guidearound for the same reason.

Mike Holman has done us all a favour by offering us The RESP Book: The Complete Guide to Registered Education Savings Plans for Canadians. He’s even taken it a step further by offering a free copy to one lucky Balance Junkie reader. All you have to do is leave a comment below and I’ll enter you in a draw for the book. I’ll announce the winner next Saturday, October 30, 2010 and Mike will send out the book. (Canadian residents only please.)

What’s In The RESP Book?

The RESP Book covers all the basics of opening and managing an RESP, including the following:

  • RESP account rules
  • How RESP contributions and grants work
  • RESP withdrawal rules once your child attends a post-secondary institution
  • What happens if your child doesn’t attend post-secondary school
  • Special grants for lower income households
  • Information about grants programs in Alberta and Quebec
  • RESP rules for part-time studies

The book also offers detailed information on how to go about setting up an RESP account, from choosing a financial institution to whether or not to use a professional investment advisor. He goes over what to watch out for in terms of fees, as well as basic investing tips like how to set an asset allocation.

The book begins with a basic explanation of what an RESP is and offers 6 reasons why you might want to open an RESP, and 6 reasons you might not want to do so. I’ll just give you a couple of my favourites here. The best reason to open an RESP for your kids is likely the Canadian Education Savings Grant (CESG). You just can’t beat free money. Another good reason is the idea that your children will not leave their post-secondary education saddled with tons of debt.

A couple of good reasons to delay opening an RESP might be that your personal finances are not in order, or that you do not have adequate retirement savings. The message is clear: Get your own financial house in order before you set about helping your kids.

Details, Details . . .

At 118 pages, this book won’t take you long to read, but it’s absolutely full of detailed information that’s pretty hard to remember from year to year. It’s greatest value may lie in its usefulness as a reference manual. You can turn to it a couple of times a year to quickly refresh your memory on the ins and outs of saving for your child’s education.

My two older boys turned 15 this year, and I thought I remembered reading that 15 was a significant age for RESPs, but I couldn’t remember why. Mike’s book reminded me that there are special grant rules for 16- and 17-year-olds, and the parameters for those are determined by the RESP status at the end of the calendar year your child turns 15.

I could have found this information on the government’s website, but frankly, it’s not always written in an easy-to-understand way. The RESP Book is. There are lots of different examples and specific case studies so that you can really get a grip on how the RESP rules work.

Mike recommends keeping an eye on your time horizon and shifting to more conservative investments like bonds as your children grow up. His kids sound like they’re pretty young, but I can tell you from experience that the years flip by like calendar pages, and they do so with increasing velocity as your children grow. Just when it seems like you’ve got a handle on putting money into the RESP, it’s time to figure out how to get it out again!

Have you set up an RESP for your children?

Written by Kim Petch

28 Responses to Book Review and Giveaway: The RESP Book

  1. Thanks for the review!

    I remember when the RESP were first introduced, the rules were so complex (I worked at a FI at the time). I haven’t kept up with the RESP rules lately, but my kids do have one and the book will definitely help in that area!

  2. I am just like you–physical books are something I doubt computers will be able to replace. Humm perhaps a leather bound i-pad?

    That said, thanks for all your RESP info, keep up the good work :)

  3. I have a grandbaby due in November and would like to set up an RESP. This book,I hope, will give me lots of tips. I didn’t set up RESP’s for my kids and that’s one of my biggest regrets.

  4. As a grandparent trying to help grandchildren to get an education, I have tried a number of RESP tools. The banks offer so littl latitude in what you can hold in an RESP, it seems I am forever looking for the right place…which the bank is not!

  5. This is important info for all parents, especially those who have children … the first one

    I would like to include this book as part of my baby gift.

  6. we currently have RESP for our 3 year old daughter, but I could use some more info on this subject.Thinking about converting it to self-directed plan, so will buy that book on next Monday if I could not win it (which I doubt)

  7. Would love to win this book. Our daughter is almost 2 and we already have some RESP set up for her but we want to learn more about how to optimize it for her, and any other information we can learn from this book.

  8. Would love to win a copy of this book. I think RESPs are a great way to take advantage of “free” money (from the CESG grants) – just need to understand the various options and how best to set up and manage the RESP.

  9. Although I don’t have kids yet, this seems to be a perfect gift for sister on her upcoming birthday. We have been talking about the importance of having a RESP for her kids and logistics involved in getting one.
    This book seems to have the material to point her in the right direction.
    I could always borrow the book from her when I have kids of my own :)

  10. You’re doing a great service to all of us in the community at large by gifting your precious time, effort, ideas and knowledge for all of us to benefit.

    The subject is very timely for me to indulge in now that we have a 2-week old first grandchild…and what a great gift it will be to be able to get your book as a gift!!

    Thank you so much for enlightening us with your knowledge, which you do so fantastically!

    I pray for your good health and happiness.


  11. Just had our first little one seven months ago and we consider RESP’s important enough to have started saving even while things are tight on my mat leave (might have to do with the $44 000 in debt I graduated with after putting myself through University). Now I just need to figure out what to do with the $$$ and this review makes it sound like this is the right book to help me!

  12. I read the free first chapter as published, and I already learn a couple of things I didn’t know.. look forward to read the entire book!

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