Book Review: The RESP Book

If you ever read anything about RESP (Registered Education Savings Plans) you know how confusing things can get.  Just who are the beneficiary and the contributor?  What is a PES or EAP?  Do you have to apply to get the government grant money? Can Grandma open one at the same time as the parents?

Well at last there is a book to answer all of these questions: The RESP Book by Mike Holman (who by the way also writes the MoneySmartsBlog.com).  The book is just full of useful information to help you navigate the world of RESPs and better yet he provides examples to help illustrate the complex parts.  Perhaps my favorite quote from the book is when discussing the contribution room carry over rules Mike states “Confused? You should be!” Why? Because trust me even I was confused at that point.

Regardless of how familiar you are with RESPs you are likely going to learn something from how they work in this book.  In my case I didn’t even realize that I was getting additional RESP grant money of $50/year until I read Chapter 6 and then checked my last RESP account statement.  So thanks Mike!

I also really like the section on future post-secondary educational costs where Mike deconstructs those media stories that say we are going to need to save $130,000 per kid for a post secondary degree.  Basically those studies assume the absolute worst case scenario to get those values. His estimate is much more reasonable and comes in at $77,132 for a degree away from home and $51, 763 for a degree while living at home in 2009 dollars.  With a few reasonable assumptions such as the parents providing $200/month/kid during school and the child works during their summers at school to save $1000 to $2000/year you can easily get by with saving under $40,000/kid.  This conveniently was exactly the amount I was planning to save for my kids.

Yet Mike’s book did get me thinking that I could actually cover off a larger portion of my kids’ education costs fairly easily by just increasing my contributions right now (by an extra $34/month in total).  So I put down the book and made a call to my bank and increased my contributions so now my kids should have about $56,000 each for post secondary education.

So is the book worth buying? Well the book is just 114 pages so you can easily read it in a weekend and is listed for the low price of $15.99.  So yes go buy a copy and keep it around as a reference book.  Or if you are watching your spending convince your local library to obtain a copy for you or just go here to try and win a copy.

6 thoughts on “Book Review: The RESP Book”

  1. With respect.

    I haven’t read the book but from what you’ve extracted for me, tuition and books in 20 years will only be in the range of $13,7500/year in todays dollars? (Based upon a required $55,000). The cost of education is already $13,000/year!

    If we look at education as a simple economic system, its no wonder prices are increasing rapidly, as demand is extremely high today for educated people. Does the book assume that demand will flatten or decrease over the next 20 years – thereby dampening the trend of increasing costs?

    Part of me wants to get the book because I’m curious to see how this is all laid out. The other doesn’t because it doesn’t seem realistic.

    Does the book outline provide an assessment whether a parent is better off being more in line with the author’s ‘reasonable’ assessment of costs, or saving more to mitigate the risk of ever increasing costs?

    Please delete my post if I am out of line. I do not want to discredit the author.

  2. Sorry Kiester – the numbers all all in today’s dollars. So when I say $40K, I mean $40K today not in 20 years. I didn’t make that clear in the post.

    Tim

  3. Kiester – the section about future educational costs is a very small section of the book. I only included it to show that you don’t have to max out the RESP at all cost.

    The majority of the book has to do with RESP rules and how to get an account started.

    You can read the future cost section for yourself in the Chapter 1 book excerpt available at the Globe & Mail.

    http://www.theglobeandmail.com/globe-investor/investor-education/book-excerpts/a-how-to-guide-for-your-resp/article1774798/

  4. Thanks for the clarification.

    I’ll pick up a copy after I confirm I haven’t won one 🙂 Actually, I’ll buy one anyway for you sharing your time here.

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