Graduation day is here—your child is proudly holding their diploma, but now they’re about to tackle their next big challenge: the housing market. As a parent, you might be asking yourself, should you be focusing on saving for their education or helping them buy their first home? With the cost of both rising, it’s hard to know where to begin.

Many parents start by opening an RESP for their child’s education. But with housing prices and interest rates on the rise, it’s becoming harder for young Canadians to enter the market. This leaves you wondering if helping them with a home purchase should take priority, and how much you can afford to contribute without jeopardizing your own retirement or financial well-being.

Try not to stress—I’ve got five practical tips to help you save smart, so you can set your child up for success without sacrificing your own financial goals.

1. Set Clear Priorities and Goals 

It’s one thing to say you’d like to help your kids pay for school or buy a home, but depending on your upbringing and personal values, your idea of what is an appropriate amount of help will look different from someone else’s. 

For example, some of my clients feel it’s important to pay for their child’s education costs entirely, while others use it as a teachable moment by offering to match what their kids are able to save for themselves. Both of these are noble goals, but they have very different costs. 

Same goes for helping your kids buy a house. What does that mean to you? Do you hope to give them a cash gift? If so, how much? Would you prefer to co-sign on their mortgage? Will you be able to afford to? Don’t be afraid to quantify what you’re envisioning. Even if life happens and you end up falling short of your initial goal, chances are that having a goal and working towards it will get you further than if you didn’t have a goal.  

2. Start Saving Early!  

It probably goes without saying, but the earlier you start saving, the more likely you are to reach your goal—especially if you invest wisely and take advantage of compounding returns.

Let’s say you set a goal of gifting your child $50,000 to buy their first home when they turn 25. Assuming you choose an investment that earns an average 5% annual rate of return and you start saving the year your child is born, you would need to set aside $84 a month to reach your goal. Pretty reasonable, right?  

On the other hand, if you wait to start saving until your child is, say, 13, your required savings goes from $84 a month to $254 a month, at which point you may find yourself having to make trade-offs. 

Same goes for education savings. RESPs reward subscribers who start saving early by offering up to $7,200 in lifetime grants if contributions are spread out over a number of years. If you start contributing $208.33 per month from the time your child is born until they turn 15, and assuming the same investment return of 5%, you can expect to have somewhere around $90,000 in your RESP by the time your child turns 18. Curious how I got this number? Check out my article on how to maximize the Canada Education Savings Grant HERE. 

Resist the urge to procrastinate on saving. The sooner you start, the more obtainable your goals become!

3. Get Your Kids Involved 

I’ve recently started offering free financial education sessions to my clients’ children. Through these sessions I’m learning more about how to get kids excited about earning and saving money. 

Housing and education costs are tough in Canada and likely will be for a while, but when talking to your kids, keep it positive and straightforward. You could say something like, “Houses are expensive, so we’re starting to save for yours now.” Then, turn it into a game to keep them excited about tracking their progress. You can even use tech tools to help keep them motivated. Here’s a link with some of the top money management apps for kids!

4. Take Advantage of RESP Grants (Even if You’re Not Sure Your Child Will Use Them) 

The Canada Education Savings Grant provides an automatic 20% return on the first $2,500 you contribute to your child’s RESP each year. I challenge you to find another investment that delivers consistent 20% returns with little to no risk (spoiler: you won’t). 

If your child ends up deciding not to pursue postsecondary education it’s true that your grant payments would go back to the government, but you still get to keep your contributions and investment income, so losing the grant doesn’t exactly set you back when compared to other options.  

Alternatively, you could choose not to invest in an RESP and then your child could decide they do want to pursue post-secondary and you missed out on a bunch of free money. You decide which is worse.  

5. Gift Money to Contribute to FHSAs 

Last year the federal government introduced the First Home Savings Account—a new tool intended to help first-time home buyers save up their down payment. Canadian residents over 18 who have never owned a home (or haven’t owned a home in the last 5 years) are eligible to have one of these accounts, and there are some perks.  

With an FHSA you are allowed to contribute up to $8,000 per year for 5 years (or until your contributions reach the lifetime limit of $40,000). Like RRSPs, contributions are tax deductible. Depending on your child’s income they may get a tax refund that could also be used to compound their savings. When your child does purchase their first home, the accumulated contributions and investment can be withdrawn tax-free to help fund the down payment or cover other related costs. Unlike with the RRSP First Time Home Buyers’ Plan, withdrawals from FHSAs do not have to be repaid.  

The only person who can contribute to an FHSA is the account owner, so deposits would need to come from your child’s bank account, not yours, but remember in Canada there is no tax or attribution to worry about with monetary gifts so you could choose to simply gift your child $8,000 to contribute to their FHSA. (This will be a lot more obtainable if you’ve been saving since they were young.)  

What if your child doesn’t end up buying a home? Well, they have two options. They can wind up their FHSA and take the money in cash, in which case they will be taxed on the proceeds, OR they can transfer the funds to their RRSP on a tax-deferred basis, to help fund their future retirement. FHSAs can be open for up to 15 years so if your child opens one when they turn 18 they’ll have until the year they turn 33 to decide.  

If you want to maximize the tax efficiency of your child’s home down payment you could also gift them money to contribute to their RRSP that they could then take out under the RRSP home buyer’s plan, just remember that these withdrawals have to be repaid so your child would have the burden of making monthly or yearly repayments to their RRSP down the road. 

Navigating the balance between saving for your child’s education and helping them buy their first home can feel overwhelming, but it’s all about setting clear priorities and starting early. Whether it’s opening an RESP, gifting money for an FHSA, or just getting your kids involved in the savings process, every step you take brings them closer to their goals—and helps you stay on track with your own. Remember, it’s not about doing everything perfectly but about making informed choices that fit your family’s values and financial situation.

Need personalized advice on how to get started? Reach out today for a free consultation and let’s build a strategy that works for you and your family’s future!