Whatever the reason, financial planners notice parents are more interested than ever in investing in their kids' education.

In fact, some clients are confused about whether they'd be better off investing in an RESP or in their RRSPs, says James Schofield, a senior financial-planning adviser at Assante Capital Management in Whitby, Ont.

"I tell them to stick to their financial plan, to put their RRSP contribution first to secure their retirement, and they can still provide for the kids."

The 20-per-cent federal grant given to RESPs is swaying some people to favour the education plans, he adds, but the tax savings of an RRSP generally outweigh the amount of the grant.

As well, you don't get a tax break for your RESP contribution, as you do for an RRSP.

"There's still a lot of confusion about this. People are surprised and disappointed to learn they won't be receiving a tax receipt," Mr. Schofield says.

Still, the interest in RESPs and other education savings will only increase, says Krista Kerr, vice-president of Kerr Financial Corp. in Toronto.

"Education is an even bigger issue than retirement for our clients in the U.S., because it's so expensive. As costs go up here, I think we'll be seeing more of that, too."

But plan it properly, and you don't have to choose. Your RRSP contribution can do double duty as an RESP investment, too.

"If you put $5,000 into your RRSP and you're in a 40-per-cent tax bracket, you'll get back $2,000. Put that into an RESP and you'll get $400 in grant money. In effect, you're turning your $5,000 into $7,400. There's a nice bit of alchemy there," Mr. Schofield says.

Just like an RRSP, the money in an RESP grows tax-free. And it's a great way to split income with your child because, when the money's taken out, it's taxed at the child's rate, not yours.

Remember, all is not lost if your child decides that higher education isn't for him or her.

You can roll the money into your RRSP, up to the maximum amount of unused room, though you'll be dinged with 20-per-cent tax on any assets over the RRSP limit.

Better to name both your spouse and yourself as contributors. If both parents are listed, you have two RRSPs to make use of.