New study reveals that many parents are not taking advantage of simple steps
Being a parent has ups and downs throughout a child’s life, but for many the early years are among the toughest.
Welcoming a new, highly dependent, human into the family, the sleep deprivation and sheer responsibility can be hard to cope with, even without the financial implications for the short- and long term.
But some of the financial concerns held by early-years parents may seem far worse than they are, according to a survey from RESP provider Embark, which found that current trade and economic tensions are exacerbating financial issues.
Two thirds of respondents with children under five said they were concerned about US-Canada trade tensions and 60% said it had changed their savings behaviour. Around half said their investment strategies have changed and a similar share are finding it harder to save for their child’s education.
But perhaps a key part of the issue is that everything becomes more vital when you have a young child to care for. While saving for education may seem a mammoth task – and 32% of respondents said they don’t have the money to save in a RESP, 27% fear their financial situation may change, and 19% worry about having to make regular contributions – even making small contributions is better than nothing.
"This survey shows that new parents are facing a perfect storm: a lack of sleep, everyday challenges of raising young children, rising costs, and now, trade tensions," said Andrew Lo, President and CEO of Embark. "It's easy to get discouraged by market volatility, but even contributing a little each month to your child's RESP can make a big difference over time. Government grants alone can match up to 20% of your RESP contributions, delivering immediate value before factoring in compound growth and investment gains.
Embark says that the cost of education is escalating and that, for a child born in 2024, their post-secondary education costs are set to be around one third higher than a student would pay today.
Parents are prioritizing their child’s education (82% said so) over paying down debt (77%) or saving for retirement (72%).
Nearly two-thirds (63%) say they spend a lot of time thinking about how they'll afford post-secondary education and 70% wish they had more knowledge about saving and investing for it.
More than two thirds say its hard to find the time and energy to focus on finances and 37% of tired and stressed parents admitted to regretting financial choices made while sleep deprived.
