Monday, 19 June 2017

Weekly Column: Nurturing Competent Adults

Nurturing competent young adults

It must be difficult to be a young adult these days. Those of us that didn’t grow up with the Internet and social media remember a time where our parents didn’t always know where we were and couldn’t fix everything for us with a simple phone call.  

Are young people still learning to solve problems on their own, given their access to google to think for them and the bank of mom and dad to make their worries go away? You have to wonder, especially knowing that there are now courses in “adulting,” where young people can study online to learn grown up skills. The fact that a generation of people may not know how to follow a recipe, change a tire or write out a cheque is baffling if not scary.

Of course, these are sweeping generalizations. Look hard enough and you will find many young people with great problem solving skills and an independent outlook. But one has to wonder if the general population of millennials—children born between 1980 and 2000—is truly prepared to step into adulthood.

The season of recognition

The next batch of high school graduates is about to complete one phase of their lives, the time where they lived at home and had the daily guidance of parents and teachers to steer them. Looking back, one might ask whether any of us was really prepared for the real world at that age. But it’s also hard to resist comparing kids that have never done their own laundry with the great generation that marched off to war at the same age.

With these two extreme examples comes a spectrum of opinions on what childhood, adolescence and adulthood should be like. Many would argue that kids should be kids and not have to face worries about money, survival or adversity. Many others would argue that shielding youth from these challenges not only leaves them ill-prepared for real life, but also gives them an unrealistic expectation of what their future will hold.

If mom and dad have paid the cell phone bill and bought the brand-name clothes and taught you that you deserve the best that life has to offer, how will you transition to a minimum wage job, and rent, and a boss that might not recognize the special wonderfulness you have always been told you possess?

Cramming for life’s tests

If you are a parent, you might ask yourself how your kids are usually allowed to deal with a problem. Depending on their ages, there is usually a way that you can allow them to safely figure out what to do on their own. 

Whether it’s allowing them to spend their allowance frivolously and then having them sit out the next shopping trip, or transitioning a few bills into their names while they still live at home, and ensuring that those bills are paid on time, there are many ways to ease kids into a more independent role while still being available to advise them.

If your child is now finishing up high school and will be leaving home in the next few months, whether entering the work force or off to post-secondary in the fall, it might not hurt to evaluate some of their skills while they are still home under your care. Take an hour and change a tire together. Check the oil in their vehicle and make sure they can top up the fluids on their own, put air in the tires and boost a dead battery. 

Give him or her an evening a week where they cook for the family. Send them for the groceries with a set amount of money and a list. Stop doing their laundry and making their lunches, if you haven’t already. Show your affection in praising how they are handling these new responsibilities, rather than by doing it all for them.

Children learn responsibility by having rules and expectations. As parents, you have tried to nurture their self-esteem and confidence, but have you given them opportunities to grow capable and self-sufficient? Can they handle everyday problems and challenges, or should you spend this summer preparing them for adulthood?

A new world of independence is opening up to this season’s graduates. They’ve anticipated this moment for years, as have their parents. With the great adventures and new beginnings come new responsibilities. Websites like moneymentors.ca and practicalmoneyskills.ca are a helpful jumping off point if you’d like to make sure your kids are ready to handle their own money.

Creating competent young people is a combination of nurturing their emotional growth as well as their practical knowledge. Kids today have technology to help them, but are at risk of having it stunt their common sense. Giving them more responsibilities will help grow their independence.


Wednesday, 14 June 2017

Weekly Column: Are Bank Fees Bleeding You Dry?

Fees and service charges: is your bank bleeding you dry?

Not everyone that reads this is going to bother to find a bank statement or log in to their account to double check what they are paying in bank fees. Unfortunately, many people look at service charges and fees as a fact of life, an annoyance, and refuse to make an effort to eliminate these phantom expenses that slowly drain away your accounts.

The fact is, you should be able to bank for free. In many cases, minor effort on your part would ensure that you could. And even if you can’t bank for free, perhaps you can find ways to save on banking that will boost your bottom line and make a difference over time.

Examine different plans and options

What fees does your bank charge you? Has your life changed significantly since you selected the plan that you use? For instance, if you pay a high monthly fee so that you can use any bank’s ATM, are you actually using different ATMs often enough to make that a cost-effective option? Or could you reduce that plan and only use your own bank’s ATM for free? If this strategy could take you from $20/month down to $4/month, that is a savings of $192/year.

Likewise, if you are regularly into your overdraft, accept the fact and find an option that costs less. Some accounts charge a monthly fee for overdraft protection whether you use it or not. Others charge you on a per use basis, while still others do not charge extra if your account rises above zero at least once every month. If you find yourself needing an overdraft, finding a sensible option might save you enough money over time that you no longer find yourself “in the red” every month.

Minimum balance, minimum fees

Are you aware that keeping a minimum balance in your account often eliminates the fees that your bank charges? Do you know what that magical number is? If you find it hard to maintain a minimum balance and notice that you are often being charged the fees, find an account with a lower minimum balance. Or if you like the prospect of never being charged a fee, maybe an online bank is right for you.

Although many of us like the thought of having a bricks and mortar bank to visit and a real teller to serve our needs, online banks are gaining popularity with lower fees and more flexible options.

Online banks: the way of the future?

It’s comforting to know where your money is. But even if you deal with one of the major banks or a huge credit union, you are still only a number to them. The difference between an online bank and a traditional one is, increasingly, the fees that you are charged and the manner in which customer service is provided. Have you tried to phone a major bank lately? It’s not unlikely that, for people that do email, it’s actually easier and faster to reach someone via online chat or email message than waiting in queue on the phone or never being called back by the associate you’ve been trying to reach.

In every Internet search conducted for the writing of this column, two online banking options jumped to the fore. I’m not associated with either, and people should take the time to do their own research and determine what’s right for them. But both President’s Choice Financial and Tangerine have interesting options available for those willing to try a new approach to banking.

These online banks offer accounts that charge zero fees, with no minimum balance required, and are associated with established big banks so that you can access ATMs in your community.

With the President’s Choice option, you also receive PC points when you use your account. These points can then be used to buy groceries. When you consider that your regular bank does the opposite—charging you a monthly fee and possibly extra for each transaction—this should make discerning savers take notice. You can also use PC or CIBC ATMs without charge to access your money.

Similarly, the online bank Tangerine is owned by Scotiabank and used to be known as ING Direct Canada. It offers no fee chequing and savings accounts as well as a number of other options.
The point is not to sell you on a particular type of bank account, but rather to encourage you to look at your statements and see what you are being charged by banks that do little to accommodate your situation. There are other plans and options out there. Prioritize saving on fees and keeping that cash in your own account, rather than the bank’s, no matter where you choose to keep your money.



Thursday, 1 June 2017

Weekly Column: Penny wise, pound foolish

Penny wise, pound foolish

Many of us feel that we’ve tightened our belts in recent years. We’re spending less than ever and, now that some jobs are returning, a sense of normalcy is back, too. So, with the return of an income and the reduction of spending, why is it so hard to make ends meet, much less get ahead?

You watch the grocery flyers and plan your weekly meals around the meat and produce that’s on special, right? You eat your leftovers and use a rewards card that accumulates points or cash back. 

You’ve stopped eating at the drive-thru and haven’t bought yourself anything in ages. You’ve even gotten ambitious and examined your bills and plans to reduce fees and extra charges. You’ve gone paperless to avoid paying for the paper bill that comes in the mail, while also bundling or downsizing services.

You’re doing all the smart, budget-savvy things, so why don’t you have more money to show for it? Why are you still spending ALL THE MONEY every month, when you feel like you’re working hard to save?

There’s a sad reality many budget-conscious folks are waking up to—saving those pennies, nickels and dimes gets you no further ahead if you don’t do something with the dollars you’ve saved.

In other words, if you don’t move those savings out of your general account, you will spend them on something else. And when people feel like they’re scrimping and saving with nothing to show for it, many will eventually stop trying.

Luckily, a few simple steps will help you turn things around and hopefully give you results in no time.

The first thing you must do is take the time to look at your bank and credit card statements. Are there places you could continue to trim your spending? How much are you saving with the reductions you’ve already made? Come up with a realistic figure that represents this unspent money.

Let’s say, for example, that you cut your $100/month satellite package down to $80. You are saving $20/month. If you’ve eliminated your landline for a savings of $60/month, you now have $80 to do something with, right?

Make it automatic

This advice is not new. David Bach wrote about this years ago in his book “The Automatic Millionaire”. But the strategy still applies: take the $80 you’re saving and have it automatically transferred out of your main bank account before you have the chance to spend it. Make sure that you have a low or zero fee option for automatically transferring money between accounts.  Keep an eye on your bank balances and make sure you aren’t running yourself into the overdraft by doing this—you mustn’t begin spending more loosely because you know there is extra money. The point is to put that $80/month to work.

You may think that socking away $80/month won’t have a huge impact on your financial situation but, the point is, it’s still $960 a year that might otherwise have trickled through your fingers.

What to do with it?

Sticking with our example, you are now consistently saving $80/month. What is your most pressing financial goal? Have you got credit cards that need paying off? Any loans? What is your highest interest rate? 

If you drive an older vehicle, perhaps you should start saving for a newer one, or for the inevitable maintenance and repairs on the one you have. If you haven’t started saving for retirement or your children’s education, you may want to begin now. Likewise, if you don’t have money set aside for emergencies—whether it’s a dishwasher that springs a leak or an unforeseen layoff—your $80/month is at least a start.

Start small, dream big

Stashing away $80/month might seem, to some, an ineffective amount of money. To others, it might seem a lofty, far off goal. No matter your situation, don’t be discouraged by how small you have to start out. Watching a bit of money grow is sure to inspire and motivate you to further curtail your spending and find other ways to save. And when you do, be sure to automatically transfer that money and put it to work for you.

If you were offered an extra hour of work, would you do it for the money? Why not get up an hour early one day and examine your statements and accounts to find out where you are leaking money? 

For most of us, it is simple things like snacks and meals for the kids and impulsive purchases when you aren’t thinking of your goals. Cut these entirely from your budget and transfer that money to another account where it is either invested, saved, or put against debt.


Accumulating month after month, these automatic transfers are your ticket to a better financial situation.

Friday, 26 May 2017

Weekly Column: Does Your Child Need an RESP?

Will your child need an RESP?

Look around the community and you’ll find plenty of self-made men and women who set out on their own at a young age, without much formal education, and worked hard to build a successful farm or business. With determination and perseverance, and by the sweat of their brow, these entrepreneurs strengthened the local economy and contributed to their communities at the same time. 

While that generation had very little handed to them, it’s hard to know if today’s young people will have the same shot at life without their grade 12 plus some manner of formal education.

No one can predict what their children will want to be when they grow up, but we can acknowledge that times have changed. As farmers learn to navigate world markets and business owners face competition on a global scale, it’s hard to imagine what the career of a child born today will look like.

Just another thing to save for

With payments coming out your ears and a long list of contingencies to save for, your child’s post-secondary education might seem a long way off and the least of your worries. While this may be true, ask any grandparent how quickly a child grows up and leaves the nest. Committing even a small amount, monthly, to an RESP will reap rewards for your child in the future.

A Registered Education Savings Plan (RESP) is a means to save for your child’s education, whether it be an apprenticeship program, trade school, college or university. The plan is most beneficial because the Federal Government provides 20 cents for every dollar that you contribute (up to $500 annually). Anyone can contribute to a child’s plan. Also, there are extra options available for low income families.

Learn about RESPs

This is by no means the definitive explanation of how RESPs work. For more information, visit cra-arc.gc.ca and speak to professionals. Understanding RESPs is imperative to getting the most for your money.

Basically, your monthly contribution is supplemented by the government and invested. The money grows tax-free until your child is ready to use it at an approved institution. When the money is paid out, it’s taxed at the child’s rate, not yours. Assuming the child has little to no income, the money can be received at little cost. The RESP needn’t be used immediately upon graduation from high school can remain open for over 30 years.

Consider what’s right for your family. For instance, will you want the RESP to be transferable between siblings? Would you like to have a say in how the money gets invested or would you prefer to have a professional handle the details? These are questions to ask, whether you invest through a financial institution or credit union, a certified financial planner, or through a group plan dealer.

Know that there is a difference between group RESPs and individual or family ones. Each group, or pooled, plan works differently and has its own rules. There are often more fees associated with group plans and you must commit to buying a set number of plan units. Should you miss a regularly scheduled payment you may be subject to fees and penalties or your plan may go into default and be terminated. In such a case, you may lose some or all of your investment. Do your research and speak to a number of parents and professionals before committing to a group RESP.

Sacrifice for an investment

The list of things to save for can get downright disheartening. Retirement, emergencies, vehicle and home repairs…it seems there is no money left in a budget for fun and incidental spending. But if you find yourself sacrificing in the here and now to give your children the toys and gadgets they want, consider, instead, investing some of that money into an RESP so that they can earn a good living and buy their own gadgets in the future.

We could debate whether giving kids too much for free is a help or a harm to their character. Perhaps raising trust fund babies and providing them with brand new vehicles and designer clothes doesn’t prepare them for the real world at all.

On the other hand, having no future plans or resources is equally as debilitating. Discuss your children’s aspirations with them as they grow. Can they compete and succeed without further education? What are the projected costs of what they need?

Balancing your support with their own hard work and contributions will not only teach them responsibility but will get them started in life without the burden of significant student debt. RESP contributions, no matter how small, add up over time and are a sensible way to encourage a child to invest in their skills. The sooner you start, the better.


Thursday, 11 May 2017

Weekly Column: And Baby Makes Three

And baby makes three

For most parents, preparing for your first child is a time of nervous wonder and excitement. All the “firsts,” from the first movements in the womb to your first delivery and baby’s first words and steps, make parenthood a fantastic and awe-inspiring experience.

Beyond all the emotional and hormonal changes happening in your life, you may also notice different pressures and judgements being assigned. Baby gear is a competitive industry and you will be marketed to non-stop as the pregnancy progresses.

From maternity clothes to stretchmark creams, there is no frontier left unexplored by advertisers. Prepare to be bombarded by all the “essential” things you must have to ensure that your child develops and thrives to its highest potential.

And that’s before you’ve even given birth.

Part of your responsibility as the adult caring for a newborn and preparing a child for life is to become a discerning consumer. This begins with being rational about what you actually need and what’s clever marketing. It’s easy to get caught up in the excitement and want to buy every new gadget out there. But, while babies can be expensive, remember they don’t have to be.

Newborns don’t require much and it needn’t all be top of the line merchandise. In fact, much of it can come your way in the form of hand-me-downs or garage sale finds.

Everyone has their own level of tolerance for used items. While some people might happily buy used cloth diapers on kijiji, someone else might shudder at the thought. As a parent, you must always do what you are comfortable with, but do give used baby gear a chance.

Remember that many things will be outgrown before they are used. Additionally, if you have a large extended family, you may be given more than you need without having to purchase much at all. Consider the wealth of experience that surrounds you. Ask relatives and friends that have children what the most essential things are—you might be surprised at the range of answers.

Safety first

Obviously, no amount of money saved is worth putting your child at risk. Car seats expire, so check the date on the bottom before accepting a used seat. Also, if you can’t be sure that the car seat has never been in an accident, don’t take it.

Having a top of the line seat won’t matter much if it isn’t installed properly. Before your due date, search for a car seat clinic near you through the SGI website or book an appointment with a car seat technician at https://www.sgi.sk.ca/online_services/locators/carseattech/index.html

Baby needs a safe place to sleep. While many parents now sleep with their children for the first few months and beyond, if you have a used crib or playpen make sure all of the pieces are intact and that there hasn’t been a safety recall on the product. As well, replace the mattress if it has seen a lot of wear. Too soft of a surface can smother baby.

Baby fashion

The days of the Winnie the Pooh diaper bag are long gone. Baby accessories are now a reflection of the parent’s style, and it can be difficult to keep perspective when you see your friends with all the latest trends. If keeping to a budget is important and necessary to you, comfort yourself that having the latest fashions does not reflect on the love you have for your child.

There are strollers out there that can attach to a car seat, collapse to fit into the trunk of a car, and go off-road like an all-terrain vehicle. Before making a purchase, consider what you will really be using the stroller for. If short walks to the park predominate, a $30 umbrella stroller might suffice. If jogging through the woods is more your style, the price will be higher. Knowing that, you may want to start watching used websites, garage sales and mommy Facebook pages to snag some great deals.
There are so many opinions about how to raise a child. From cloth or disposable diapers, to breast or formula feeding, to baby’s development, you will likely feel overwhelmed at times.

Keep your wits about you. Advertisers like to make us feel as though we are incapable of raising a child without their products. Those fancy nursing covers used to be called a blanket. Bottle sterilizers were once a pot of boiling water.

Don’t allow the pressure to spend more money detract from this spectacular, once in a lifetime experience.


Make sure your baby is safe and warm. Consult with other parents and respected elders and make decisions based on reality. What you save now will be spent later, believe me, when the hand-me-downs dry up and your child begins playing sports and attending birthday parties. 

Friday, 5 May 2017

Weekly Column: On Living Long, and Wide, and Deep

Living long, and wide, and deep

It’s a popular trend to think that, since we don’t know that we will live long, we should live wide—taking in every experience possible with the motto “you only live once,” or YOLO. But research reveals that simply experiencing thrills and pleasures doesn’t make us truly happy. Maybe it’s time to also experience living deeply…where our consideration for others and making small meaningful sacrifices enriches our experience and brings lasting contentment and gratification.

Two articles in the Atlantic, both by Olga Khazan, discuss why more and more people feel isolated and depressed in today’s society. In “How Loneliness Begets Loneliness” (April 6, 2017) the author states that Americans are “facing an epidemic of loneliness and isolation.” She cites research showing that a lack of social connection can cause significant health problems including depression and anxiety. The statistics in the US and Canada are roughly the same in stating that a quarter of us are lonely.

It is no wonder, then, that 1 in 10 Canadians will suffer a depressive episode in their lifetime. Once you are lonely and depressed it becomes harder to get out and see people, and the spiral deepens. 
In her second article, “Meaningful Activities Protect the Brain from Depression,” (April 21, 2014) Khazan discusses a study of 100 teenagers which found that kids are less vulnerable to depression if they are predisposed to selfless deeds.

Of course, depression is a real medical condition and it can’t be solved by saying “go do selfless deeds, you’ll feel better.” But it is heartening for parents to know that a little action on our part might insulate our children from depression and mental anxiety down the road.

Kahzan describes two kinds of joy. The first is the selfish kind of pleasure found in receiving a gift or purchasing something new. This happiness quickly fades. The second type of joy is the more gratifying feeling of contentment that comes from helping others, doing meaningful work, or “otherwise living a life well lived.” This sense of well-being lasts longer.

In other words, it’s better to give yourself and your kids experiences where you interact meaningfully with each other and the community, rather than worrying about giving them gadgets and vacations. What a relief.

It makes sense that if doing things for others protects young people from depression, the same should be true for the rest of us.

It also makes sense that many of the people that have been uncertain about their income and future over the past few years might have suffered anxiety, depression or isolation as a result. This is bad for your health and hard on your family. It can trickle down to the kids and affect their behaviour and confidence. We have a vested interest in learning to cope with and prevent isolation and depression wherever possible.

Rather than searching for ways to give yourself and your kids the thrills of a Disney vacation, teach them to appreciate the everyday wonders around them. Allow them to be bored and learn to entertain themselves. Teach them that feeling good doesn’t come with a price tag but rather that it takes effort to create a happy life.

Give them opportunities to volunteer and discuss how it made them feel. Show them how other people live and teach them gratitude. Let them feel the rush of bettering someone else’s situation.
Talk about the things that make them feel grateful and inspired, and do more of those. Have them identify what makes them feel unhappy—like seeing other people’s exciting Facebook statuses—and, periodically, have them unplug from it. Remind them that what they see online is not reality.

You only live once. 

The idea that you can only enjoy the high points, the visits to the mountains, the bungee jumping, the gatherings with friends, is an idea that detracts from the rich, everyday miracles of northern lights, a good book, an inspiring conversation.

When you feel stressed at trying to provide your family with an amazing life experience, take heart in knowing that teaching them to have morals, a positive attitude and a good work ethic doesn’t have to cost a dime. Armed with these attributes and a dedication to helping others, hopefully your children will know how to cope with what life throws at them.

It would be nice to provide your children with a worldly upbringing, full of adventure and spontaneity. Preparing for an adulthood that is often hard and mundane is equally as important, though.


Being a provider in an economic downturn is not for the faint of heart. Relax about giving your kids all the vacations and toys that they dream of. Teach them to appreciate life’s small pleasures so that they can recognize joy when they feel it. 

Monday, 1 May 2017

Weekly Column: The Payday Loan Trap

The payday loan trap

 Payday loans are high interest, short-term loans that can be obtained without a credit check. As the name implies, they are advertised as a way for someone with poor credit to obtain fast cash until they can pay it back on pay day. In order to receive a payday loan, you must be 18, have proof of income and a bank account.

Look on any payday loan company’s website and you’ll see how easy it is to get a loan—apply online! approved in 15 minutes! But, as they say, if something seems to good to be true, it probably is.

While a payday loan might get you out of a short-term situation like a car repair or the unexpected cost of a prescription, it’s not a long-term fix for not having enough money.

For example, if you need $300 to cover your bills until payday (typically a two-week loan), that loan will cost you just over $60. For someone who only uses a payday loan as an emergency measure, and doesn’t see emergencies pop up very often, one might think it is okay to pay that $60. But what if you’re paying that $60 in fees every few months?

Rather than looking at payday loans as a back-up plan, start looking at that $60 fee on a $300 loan as money you could save by finding another source of emergency money. If you are tempted to give payday loans a try, first ask yourself if you have exhausted all other alternatives.

Have you visited your bank to inquire about a personal loan, a line of credit or an overdraft? 

Although not free, these options are much more sensible than the over 400 per cent annual interest of most payday loans. Compare even the average credit card’s annual interest at nine to 30 per cent…if you are trying to avoid incurring debt then you can quickly see the dangers of using payday loans and missing a deadline.

No one should ever recommend using a credit card to get you from pay cheque to pay cheque. But if you are able to use it only for essentials and you can pay it off in full every month, you have “borrowed” for free. The thing is, even the lesser of two evils is still evil. How can you get your finances under control without resorting to the risk of a high interest credit card, if you can even get one, or the slippery slope of payday loans?

If you are thinking of taking out a payday loan to pay off your cable and cell phone bill, it is actually cheaper to pay late charges than take out the payday loan. And, if you are that strapped for cash, it’s time to downsize the cell bill and cut the extras like cable, satellite, even internet.

You are actually better off cashing in on your RRSPs or TFSAs, rather than getting tangled up in a spiral of out of control fees on payday loans that you aren’t paying back on time. But this will not help, either, unless you can save a small nest egg for the next time you need money to get you to pay day.

Obviously, the person that has already missed payments and has no savings or access to conventional means of credit is the one most enticed by the no strings appeal of a payday loan. But, should that person be unable to repay on time, she is also the most at risk of being ruined by the payday loan industry.

For the person already caught up in the spiral of payday loans, there is no alternative but to seek out help. Of course, the best advice is don’t let it come down to a payday loan in the first place.

Consider all of your vices and eliminate them along with any unnecessary spending. Get help if you have addictions. Sell things you no longer need and don’t use. Take in a roommate, couch surf if you must. Access the temporary assistance of a church or foodbank, or contact a shelter. Ask for extra hours, look for extra work, and do your best to set aside a bit of emergency money every payday. 

Although it may seem an inconsequential amount of money, that little bit of savings, accumulated, might be what tides you over until payday in an emergency.


Pay day loans exist because there is a need for small, easily accessible, short-term loans. People might’ve had bad experiences with banks or they might not understand what is available through more conventional methods. Before you take the sizable risk of a payday loan, explore every other alternative possible. If it’s too late, get advice at from professionals like Canada’s Credit Counselling Society at nomoredebts.org.