Our folks might have been more successful about teaching us kids about money had they had a copy of The Wisest Investment by Robin Taub.

She begins by noting that “to have money you have to earn it. Then… there are just four things to do with it – save, spend, share, invest.”

The book has chapters (along with worksheets and handy charts) aimed at kids aged five to eight, nine to 12, 13 to 17 and young adults aged 18 to 21.

Early on, Taub talks about “the 11 healthy habits of financial management.”

The include the idea that you need to “know where you stand financially,” or figuring out one’s net worth; that you need to “live within your means” and “save, or pay yourself first;” that you need to understand “the difference between good debt and bad debt,” to “set up a financial safety net,” and “know the difference between needs and wants.”

As well, the list of 11 includes the need to “teach delayed gratification and set financial goals,” to “track your spending,” to “save now for your children’s education” and for parents to “present a united money front” to the kids. Lastly, be sure to “prepare a will and powers of attorney” to, in effect, set a good course to be followed for after you are gone.

She advises that when talking to very young kids about money, start with cash.

“If you’re comfortable letting your kids handle money (after sanitizing, perhaps) they can start to develop an understanding of Canadian currency…. You can show them the different coins and bills and talk to them about what they’re worth. You can point out the different images on the `heads’ and `tails’ sides of the coins and discuss how each of them is a very special and important image of Canada: the beaver, the moose, the loon and the polar bear, to name a few,” she writes.

She discusses the sometimes-controversial topic of giving kids an allowance.

“Some parents firmly believe that their kids need to `earn’ their allowance, perhaps by doing household chores or by getting good grades,” she writes. “Others believe just as strongly that their kids should help out around the house without getting paid because it’s their responsibility as a member of the family to contribute.” For this group, she continues, paying the kid “sends the wrong message, i.e., that they should expect compensation for everything they do.” Two schools of thought, she concludes, but “there is no right or wrong answer. As always, you have to do what works for your child and your family.”

And, she adds later, “once your child receives his allowance, try to resist the urge to get overly involved in what he does with it. Explain that he should allocate his allowance to the different categories of save, spend, share and invest…. Allow him to make his own spending choices and to live with the consequences of his own decisions,” she notes. You can go over his budget and see if he is staying within it, however, Taub writes.

Later on, when your child is a teenager, you will have reached “a crucial time for your teen to develop sound money management skills” and you, as the parents, “must lead by example” as “financial role models.”

“It can be difficult to communicate with your teenager about anything at this age, but when it comes to money, try not to make it a taboo subject in your home,” she writes.

When your teen finally gets a “real” job, you need to make sure they understand “gross and net pay… explain that employers are required by law to make certain deductions or `withholdings’ from gross pay… and send these amounts straight to the government.”

Income tax, employment insurance and Canada Pension Plan-related deductions/contributions can make the kid’s “take-home pay…. quite a bit lower than they were expecting.”

Budgeting is important once the child has moved from allowance to earned income. Taub recommends develop a budget that takes into account fixed expenses (cell phone, transportation and clothing) that are “needs versus wants,” but to leave room in the budget for entertainment. “Have your kid save receipts so they can keep track of what they spend and you can review the details,” Taub advises.

It’s not too early when they are in their late teens or early 20s to get your kids going on retirement savings, Taub notes.

“If your kid’s income doesn’t all have to go toward college or university expenses, starting a registered retirement savings plan (RRSP) can be a good idea,” she says. Explain to the kid how RRSPs work – “the funds inside an RRSP are invested, and the investment income earned inside an RRSP isn’t subject to tax. This means the investments can grow more quickly to help (the kid) reach (their) long-term goals.”

On credit cards, “the best way to teach your kids to use credit cards responsibly is to model this behaviour yourself. Let them know that you pay off your credit card balance each month. Explain to them that the credit card is used for convenience, but that it’s a very expensive way to buy things you can’t afford.”

This great book is loaded with worksheets, charts, and illustrative anecdotes to make teaching your kids an enjoyable experience! It’s highly recommended.

Somewhere in our basement is an old pay slip from our days selling curtain rods at an Ottawa hardware store in the mid-1970s. The CPP contribution shown on the slip – we made a robust $3.20 per hour then – was a single dollar. We told our teenaged granddaughter that even tiny amounts contributed in the past have added up to a more consequential CPP payment that we get each month today!

Anyone with available RRSP room can be a member of the Saskatchewan Pension Plan. Find out how SPP has been helping Canadians save for retirement for over 35 years. SPP does all the hard work for you – investing your retirement savings in a professionally managed, low-cost pooled fund. When you retire, your options for turning savings into income include having a monthly lifetime annuity payment or the more flexible Variable Benefit option.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Spring almost sprung over Easter weekend, but as I write this blog it is the day after high winds and power outages. Today we woke up to snowdrops peeping through the snow on the ground. I think T.S. Eliot was on to something when he wrote in The Wasteland, that “April is the cruelest month.”

This week we preview a selection of blogs from a series of well-known Canadian personal finance writers.

Alan Whitton, aka BigCajunMan writes about Serial Refinancers. Serial refinancers just keep going back to the well and refinancing their debts with consolidation loans or similar debt vehicles. Much like serial murder (or murder in general), he says this is very bad! Consolidation or refinancing of a debt is supposed to be something you do once (if ever), not every 2 years.

In Paying Off Debt: An Effective Budgeting Approach, Doris Belland (Your Financial Launchpad) discusses two families to illustrate that cutting back sports activities in one family to save money is not necessarily the appropriate solution for the other household. According to Belland, two things are necessary to slay the debt monster: an understanding of why you got into debt in the first place, and knowledge of what you value.

What Happens If You Die Without a Will?  Your will reflects how you want your estate to be distributed upon your death. However, when you die intestate, the distribution is decided by a formula laid down by the Provincial Government—not you—and this formula can vary from province to province. “When you die intestate, an estate administrator will be appointed to wind up your estate and make any distributions to your beneficiaries,” Robin Taub explains. “Dying intestate may mean higher costs and delays in distributing assets to beneficiaries, compared to having a will appointing an executor of your choice.”

Once you stop working, your objective shifts from growing your investment portfolio to generating income from it. Many retirees obsess over generating enough retirement cash flow from their investments. They prefer a predictable stream of income to partially replace their previous salary income. Marie Engen explores some strategies for Generating Retirement cash flow from your Investments on the Financial Independence Hub. For example, you can withdraw only income (interest or dividend income); reinvest income, dividend and capital gains, take the amount you need for their annual living expenses and then rebalance; or purchase an annuity.

Planning a train trip? Money We Have’s Barry Choi offers 10 Train Travel Hacks You Need to Know . He suggests that you book early, use all available discounts, pack some food and don’t forget to bring your portable charger to avoid running out of juice. If you’re on an overnight train, earplugs and a sleeping mask can be helpful. Having your phone or tablet fully loaded with music and videos will keep you entertained.

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
	Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

By Sheryl Smolkin

This issue of Best from the Blogosphere draws on the work of several of the over 60 personal finance bloggers/experts who belong to the Canadian Money Bloggers Facebook Group. While many are old friends, today we introduce you to several bloggers who are new to us that we have recently started reading.

Alyssa Davies on Mixed up Money writes about Why She Still Avoids the Mall 1 Year After Becoming Debt Free. In order to pay off $10,000 in debt arising out of a shopping addiction she had to quit cold turkey. Even going to the mall was too much temptation. She rewarded herself with a new $80 wallet when she paid off her debt, but since then she prefers to shop for clothing online as a form of damage control.

11 Ways to Lower Your Power & Utility Bills by Dan on HowToSaveMoney.ca is a very topical piece for any season. Dan suggests that to conserve water you use low flow toilets and make sure you have no leaky taps. Energy efficient blinds and window upgrades can help keep the cold out and the heat in. And weatherstripping, adding solar panels and smart thermostats are other options for better managing utility bills.

We’ve read a lot lately about Sean Cooper’s book Burn Your Mortgage. In fact I recently posted a podcast interview with him on this site. But FIRECracker chats with Cooper for the Millenial Revolution about what it actually takes to publish a book. Instead of finally relaxing after paying off his mortgage, he spent 3-5 months writing the book; 4 months editing and re-writing it; plus 6-8 months working with a publicist and literary agent on marketing. In addition, he put $20,000 of his own money into the project.

The blogger and founder of Family Money Plan Andrew Daniels says part of his plan to become financially free involves making more money. Taking surveys is one side hustle that is helping him reach this objective. There are a lot of different survey companies out there and each of them compensates differently. But if he is waiting for an oil change or for his kids’ activities to wrap up, he pulls out his smartphone and earns while he would otherwise be just killing time.

CPA Robin Taub frequently blogs for Tangerine Bank’s website Forward Thinking. In How someone stole my identity to commit fraud and what I did about it she tells a compelling story about Janice who was the victim of identity theft and fraud like 20,611 other people in 2014. It took her months to get her credit rating cleared so she could be approved for a mortgage and purchase a home. “To this day, I’m still not sure how my Social Insurance Number was compromised since I didn’t physically misplace or lose the card. But I’m much more vigilant now about protecting myself,” Janice told Taub.

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

The leaves are turning and the weather is changing. As fall visits us briefly before the long cold winter sets in, it’s time to re-visit recent posts from some of our favourite personal finance writers.

On Boomer and Echo, Marie Engen offers 5 Ways To Stretch Your Retirement Dollars. My favourite is to sign up for senior discounts. In Calgary an annual transit pass for seniors is just $95. BC Ferries gives a 50% discount on passenger fares (Monday to Thursday, except holidays). Retailers such as Shoppers Drug Mart have senior discount days. A number of universities and colleges offer free tuition, at least for non-credit courses.

Sara Milton writes on Retire Happy about Financial warning signs: Are you prepared for the worst?. She says before financial disaster hits, there have  usually  been warning signs for some time. Just like on the dashboard of a car, an individual’s financial “check engine” light was lit up like a Christmas tree and, either he/she didn’t notice or  deliberately ignored it in the hope that it would somehow fix itself and switch off.

While investors may be reluctant to sell stocks because the sale will trigger tax inclusions, Pat McKeough reminds us on the Financial Independence Hub thatCapital gains tax is one of the lowest taxes you’ll ever pay. For example, if an investor purchases stock for $1,000 and then sells that stock for $2,000, they have a $1,000 capital gain. Investors pay Canadian capital gains tax on 50% of the capital gain amount. This means that if you earn $1,000 in capital gains, and you are in the highest tax bracket you will pay about $247.65 in Canadian capital gains tax on the $1,000 in gains.

For most young people in college or university student loans are a necessary evil. But they can become a tremendous burden after graduation. How I worked my way through university by Robin Taub on Forward Thinking profiles Corey Barss (age 25) who grew up in Brantford and attended Ryerson University. By saving money while he was in high school and working nearly full-time as a cook and server at the Ryerson campus pub while he was in university, he was able to graduate with only $30,000 in student loans. Even when he got a full-time job he continued work 12 hours/week at the pub in order to become debt free in three years.

And finally, the Globe and Mail’s Rob Carrick writes that one of the most important financial literacy lessons young people can learn is how to deal with banks. In Millennials, banks are not your friends his message to students is that banks aren’t your friend, and neither are they your enemy. They’re companies you do business with and that means you have to have to go in prepared to defend your own interests. He says students should look for ways to bank for nothing, and he gives  important factors to consider when evaluating student bank accounts.
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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.