Hockey over education? Invest wisely in your kids

Tia Creighton’s eight-year-old son plays hockey three times a week. Like thousands of other kids across Canada, he’s hooked.

“He just loves it,” Creighton says. “It’s a blast to watch. When he gets to play goalie, he puts the pads on and practices at home.

“My husband and I joke about how we were hoping he wasn’t going to play hockey because we know all about the schedules and the travelling and the gear and the money,” she adds. “If he loves goal, that’s when things get really pricey -- getting all his own equipment.”

The Creightons aren’t draining their bank account to finance dreams of their son making it to the NHL (yet), but a lot of Canadians do. And it seems that many put hockey ahead of their kids’ education when it comes to finances.

A new survey has found that more than 60 per cent Canadian parents are willing to go into debt or even defer their own retirement to put a child in hockey or other extracurricular activities like swimming. Fifty-one per cent say that they or people they know are spending more money to put a child in an extracurricular activity over an education savings plan like an Registered Education Savings Plan (RESP).

According to the Leger survey commissioned by C.S.T. Consultants Inc., a RESP provider, 38 per cent of parents say that they or people they know have borrowed money (credit card, line of credit, personal or family loan) to put a child in sports. Twenty-three per cent of parents say that they or others they know have deferred their own retirement or are using their retirement savings (RRSPs) to put a child in such activities.

Peter Lewis, C.S.T. Consultants Inc. vice president of regulatory and corporate affairs, finds those numbers startling.

“I have three kids myself, and I think extracurricular activities are important for kids, but to see families going into debt to fund these activities is shocking,” Lewis says. “To see those numbers and know that fewer than half of Canadians [45 per cent] have set up an RESP, that really struck me in terms of the contrast.”

Right now the Creightons spend about $600 a year for their son to take part. As hockey-playing kids get older, though, the cost rises with the level of commitment. Once players get into rep hockey, some teams charge the equivalent of university tuition fees and more for a season.

There are parents who spend as much as $10,000 per year or more for their child to play Canada’s game, according to Hockey News columnist Ken Campbell, author of Selling the Dream: How Hockey Parents and Their Kids Are Paying the Price for Our National Obsession.

“There are no limits where some parents will go,” Campbell says. “[In writing the book] I spoke to people who moved cities, who moved to different countries, who spent hundreds of thousands of dollars on things like summer hockey and one-on-one training and off-ice training and nutritional advice. It can go as far as anyone with deep pockets is willing to take it.”

Although a lot of people will do anything for a chance at the fortune that accompanies going pro, the reality is that few kids are going to end up skating alongside the likes of the Sedins. Sure, there are about 800 jobs available in the NHL, at least half of which typically go to Canadians. But parents need to have a reality check, Campbell says.

“When you crunch the numbers, it’s daunting,” he says. “It’s more likely that you will win the lottery than your child will end up in the NHL.

“What you can hope for is that they develop a love of the game and continue to play it when they’re old and gray,” he adds.

Average university tuition fees across the country are about $5,772 a year for an undergraduate degree and could be as much as $9,000 a year by 2026 (based on a 4 per cent year-over-year rate increase, according to Statistics Canada. And according to the federal government, 70 per cent of jobs require some form of post-secondary education.

“The best way to prepare your child for long-term success in life is education, specifically post-secondary education, there’s no question,” Lewis says. “The best way to prepare for that is to plan for it through a savings plan for education.”

He notes that many people with children under age six put some or all of the Universal Child Care Benefit toward RESP contributions. Through the Canada Education Savings Grant, the federal government tops up annual contributions by 20 per cent to a maximum of $500 per beneficiary per calendar year, to a lifetime maximum of $7,200.

“Even if you can’t do the maximum, whatever you can set aside is going to grow nicely over 18 years and that will be a real help when your child is ready to go to university,” Lewis notes. “I have three kids in university, and it’s a big bill. It’s amazing how fast 18 years go by.”