# Education savings

**Should we start saving for our child's education?**

Whether and how you save for your child's education. Some countries match your savings: in Canada a registered education savings plan (RESP) earns a government grant, and in the US a 529 plan grows tax-free for education costs.

In short: Parents choose between 4 main approaches: None, pay from income later; Capture the full government match; Maximize tax-sheltered saving; Save in the parents' names. Evidence: your call. No outcome evidence picks a winner. Preference, culture, money and logistics decide. Best settled: 0–6 months.

- Area: Money, chores and responsibility
- Evidence: Your call
- Best settled: 0–6 months
- First published: 2026-10-03
- Last updated: 2026-10-05
- Page: https://www.raisingyourchild.com/topics/money-chores-and-responsibility--education-savings

## Education savings: what are the options?

1. **None, pay from income later**: You do not save now and pay from earnings when the time comes.
2. **Capture the full government match**: You put in enough to get all the government grant money on offer.
3. **Maximize tax-sheltered saving**: You put in as much as the tax-advantaged account allows.
4. **Save in the parents' names**: You save in your own accounts, keeping control of how it is used.

## Education savings: what does the evidence say?

**Your call.** No outcome evidence picks a winner. Preference, culture, money and logistics decide. (Values and finance)

Canada: the education savings grant adds 20% on the first $2,500 contributed each year, to a $7,200 lifetime maximum per child. US: 529 earnings are federally tax-free for qualified costs; since January 1, 2026 up to $20,000 a year per student can go to K-12 expenses, up from $10,000, and since July 2025 qualified K-12 costs include curriculum, tutoring and test fees. Unused 529 money can be rolled into the child's Roth IRA up to $35,000 over a lifetime, if the account is more than 15 years old, the money has been in for 5 years, and the child has matching earned income

Sources:

- [Canada.ca](https://www.canada.ca/en/services/benefits/education/education-savings/resp.html)
- [IRS](https://www.irs.gov/newsroom/529-plans-questions-and-answers)
- [Saving for College](https://www.savingforcollege.com/article/529-plan-new-rules-changes)

## What else is worth knowing?

Governments offer tax-advantaged accounts for education, such as the RESP in Canada, which adds a grant, and 529 plans in the US. Starting early gives savings longer to grow. How much to save depends on your other priorities, including retirement.

## Questions to ask each other

- What do we hope to pay for, and what is realistic?
- Which plan would we use and who would manage it?
- What would we do with the money if our child does not go to college?

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General information, not medical advice. Two parents can each answer this and compare: https://www.raisingyourchild.com/explore?cat=money-chores-and-responsibility&topic=money-chores-and-responsibility--education-savings