A Letter To My Son

Hey Buddy! -
Well - you're 17 and now that the hustle and bustle of the Christmas season is over I thought I'd send you this note. It's not about the birds and the bees - I promise! But it is a few thoughts for you in one specific area of your life - money.
                   
I hope, first and foremost, that you know that no matter how much I bug you about your finances, I'm doing it with love and concern that you don't head down the same path I did when I was younger. I can't tell you enough how being in control of your money will make the rest of your life so much easier. You'll be able to go places, see and do things, and eventually take your family anywhere your heart desires. We've done pretty well as a family so far - but there is so much more I know we could have done had the money been set aside in the first place.
Regardless of what you decide to do after high school, don't mortgage the next 15 years of your life to pay for it. If you have to work for a year or so to save up some extra cash - then do it. You can - gulp - live at home, as long as you need, so you can start off on the right foot when you do eventually head out on your own. Your Mom and I will put up with a few more years of your messy room to make sure you can financially handle life on your own when it happens.
I understand there's a young lady in the picture right now. Great! That other talk happened a long time ago so I have no worries there - sort of. As much as you might be tempted to buy her affection, or anyone else's in the future, know that being a gentleman, paying for her dinner and movie ticket, and just being yourself is the surest way to find out if she likes you for who you are - not what you can give her. Don't get me wrong - a really nice birthday, Christmas or whatever gift can never hurt a relationship. Just make sure you plan ahead, save the money and listen to her to get ideas of what she might want or need. You will find out through experience that it's not always the biggest gift that wins her heart - but the thoughtful gifts that show you actually know what she likes and needs.
I could go on and on about money stuff like this - I do this on the internet, and wrote a book, you know!! But for now I just want to say that I will always be there for any questions you might have about money. If I don't know the answers, we will find them out together. You have so many opportunities in the years ahead. Be smart with your money and the world can be yours!
Love - Dad

Blog For Financial Literacy Awareness Day!

It is something you are literally going to think about every day of your entire adult life. Sometimes when you think about it your hands are going to start to sweat and your heart will race. It is going to be the source of most of your 'discussions' with your significant other. It is the leading cause of divorce in North America right now. Sounds like I could be talking about sex! In fact - most teenaged boys answer just that. Truthfully - all those statements refer to MONEY! We spend our time figuring out how to make more of it, and how to spend less of it. Sometimes we're successful at handling it - sometimes we are not!
 Today is 'Blog For Financial Literacy Day'. It's part of the overall Awareness Month going on throughout November here in Canada. I am happy to be taking part in posting today on the theme of 'My Best Tip'! A number of personal finance bloggers are taking part and if you check out my first post this month you'll see where you can find a list of everyone participating.

So what is my best tip when it comes to Financial Literacy Awareness? It is one of the words in the title - Awareness! I have written a couple of times here, and I will do it again right now, about the fact that being connected to your money and your overall financial situation is the most important thing to keep on your mind. Everything else - such as where to put your money, how to make your money grow, the best investments, the best credit cards (shudder) - is just part and parcel of the overall concept that you have to be aware of where you stand financially all the time.
There are hundreds - no thousands - of websites all talking about Personal Finance. Many of them have great information on their specific area of expertise. They are easy to find and by using websites such as Wisebread.com, you can find the best PF websites all listed and ranked in one place - making the information gathering that much easier. But all that information is useless if you don't get it set in your mind to actually take control of your financial life - and keep control of it at all times. Stay on top of your bills. Pay your debts automatically from your accounts. Sit down with your partner and have a discussion about money as often as you feel comfortable doing so - more often if it makes you uncomfortable. Make a plan and stick to it.
Money can lead to a lot of good things in life. It can also lead to a lot of bad if it is handled improperly or allowed to rule your life instead of you ruling it. Make a vow to yourself, and your loved ones, that you will keep connected to your finances. In doing so, you will have a huge advantage over the majority of the population and you'll be ready for anything that is thrown your way.
I hope we can continue the journey together. Cheers!

The Black Friday Freakout!

It's coming! In less than two weeks the single day all shopaholics have circled in red on their calendars will hit us. It is, of course, Black Friday. Even for those of us who live in Canada, and are close enough to the border with our southern neighbours, Black Friday has taken on a life of it's own. I have co-workers who book the Thursday and Friday off (a year in advance) so they can stay in a motel in the U.S overnight on Thursday - shop their brains out on Friday - and bring back more stuff duty-free because they've stayed a 24 hour period. Wow!
                                
So what are my thoughts on Black Friday? Truthfully - I have to say that I see it as a good opportunity to practice smart money thinking on everyone's part. If you see a store has something you really need, or a gift you plan on getting for someone for Christmas anyhow, at a really good price - go for it! But ONLY IF you can work it into your already pre-determined budget. Don't spend the electricity payment on that 42" LED-HD TV if it will set you back a month on your bills. Also - do not rack up the credit card because then you're just adding interest to the whole equation. But if you've got money saved, this may be a good chance to save a few dollars on already planned purchases.
The key is to be smart about it. I hope everyone knows by now that stores will put just a few items on major price slash to get you in the door. Other items are then only slightly discounted or at regular price but 'labelled' as sale items with an inflated original price. Do your research between now and next Friday and figure out exactly what you are going to buy and stick to your list. It's the impulse items which end up breaking the bank as you walk around the store with your prized purchase already in the cart.
The Black Friday Freakout doesn't have to end up putting you in dire financial straits heading into the holidays. Use it as a chance to set yourself up with a few gifts in the closet and a few dollars saved still in your bank account at the end of the day.

An Online Financial Literacy Community

I'd like to begin Financial Literacy Awareness Month by introducing you to a very useful resource available online. There are numerous places on the internet where you can get your questions answered about personal finance. One that I have recently found, which runs the gamut from saving and budgeting to investing, is the TD Helps forum. It's hosted by the TD Bank - but that's where the branding ends. None of the information is given with a sales pitch trying to get you to buy TD products or services. It is strictly a forum for Canadians to ask their money questions and get straight up answers from people who know what they are talking about. Straight up - I'm not getting paid to endorse this site - I just think it can be added to all your other tools when it comes to being smart about your money.
Here's a little blurb from the company regarding TD Helps...
A first among major banks, TD Bank Group has launched a community where people can ask the questions that are keeping them up at night and receive a tailored answer within hours, from an expert and sometimes from someone in the community who’s been there. No strings attached – just personal, expert advice available to anyone with a question. The TD Helps community was originally launched in the spring as an online home financing advice forum. Canadians were so receptive to the “virtual face-to-face” interaction that it has expanded to include a broader range of financial advice, including investing and planning for retirement, saving and managing your money, and borrowing and managing credit. You won’t find a sales push anywhere on the site, the goal is simply to build a community that will help Canadians make better financial decisions. In addition to Canadians asking specific questions to experts who are on-call to answer questions, high-traffic to the site shows Canadians are visiting the forum and using it as a resource, asking for info and reading answers to questions others have submitted. To date, thousands of personal finance questions have been answered on TD Helps.
Give it a look. See if any questions you might be thinking about have been answered. Some of the questions people have asked are specific to TD - but there are a lot of great answers to general financial questions broken down by category. I like the site as a reference tool - plain and simple.
Happy November (WOW time flies!) and Happy Financial Literacy Awareness Month! Cheers!

Why Are You Going To College?

A new month has dawned. With it, October brings the beginning of the research and application process for millions of highschool seniors preparing for post-secondary education. Believe it or not - there are hundreds of scholarships which have deadlines this month, but we'll talk about that at a slightly later date. The biggest decision students need to make right now is, 'What am I going to study at college?'. I think the more important question is actually, 'Why am I going to college at all?'.
                           
With the spiralling costs associated with college, the decline in the number of well paying jobs in related fields for graduates (How many waiters do you know with a PhD?), and the overall lack of direction many of today's teens feel, is going to college right now really the best option for you? Are you going to spend thousands of dollars studying something which you might decide isn't what you really want to do for the rest of your life? Is there something else you could do for a year or two which will help you better define what your future goals are and the direction you want your professional life to take?
My oldest son, a highschool senior, was born in September. That means he could realistically graduate from highschool and start his first month of college as a 17 year old! I love my son dearly - but I don't believe there is any way that a 17 year old boy can have a firm grasp on what he wants to do for the rest of his life. We've had lots of discussions about what he wants to do. There is a general sense of the field he wants to enter but nothing specific just yet. How do you justify spending the kind of money needed to go to college if you aren't sure what you are studying is what you want to be?
A lack of direction has got to be a major contributing factor to the dropout rates at colleges and universities. Students get into their field of study and then realize they don't really want to pursue that area for the rest of their lives. Meanwhile, they've spent thousands of dollars on tuition, living expenses, etc - and for what? The realization that they are heading the wrong way. That's a steep price to pay for a wake-up call.
Don't get me wrong with the theme of this post. I believe that a solid college education is the foundation that terrific careers and lives are built upon. However, I think the time has come for students, and parents, to really start looking at exactly where the teenager wants to head with their life - and decide if going right from highschool into college is the best overall option. Now I'm sure some will say there are studies that show actual enrolment drops off by x% every year a student waits to go to college. I understand that. However, if students and parents sit down early (as in the start of senior year early) and make a concise plan of what is going to happen and when, there is no reason a year or two delay in starting college should be the end of furthering their education. Delaying college can give students, and parents, time to save up some more money. It can give the student an opportunity to really think about what course of study they want to pursue.  It can also give students extra time to investigate all the options available such as overseas studies. It just may save a few years, and thousands of dollars in expenses, when the student decides they are heading in the wrong direction.
A college education can be a stepping stone to a terrific future - but do you really need to go right to college from highschool? That's a question only you can answer yourself!
What are your thoughts on this subject? Did delaying the start of college help you to better understand where you wanted to go with your life? I would love to hear what you think!

Final Financial Prep For the Coming School Year!

The countdown is on. Depending on where you live on this great planet you could either be at school already, settling in to your living space - or you may just be getting the finishing touches done on things at home before heading off to college next week. Either way - now is definitely the time to put those last minute preparations in place financially for the coming academic year.
First things first - do you have a bank, or credit union account, either right at your school or as close as possible to where you are going to live? Dealing with your 'home' bank can save a lot of time, energy and money throughout the year. If something goes wrong with a money transfer - either into or out of your account - you can deal with it right away. Taking money directly out of the branch, or your 'home' ATM will save you extra service fees - double fees most likely since you won't be getting the convenience charge from the other institution or the fee from your own bank for using someone else's machine. Having a close-by branch will also come in handy if you need to access your 'Emergency Fund' at any point in the year. You do have an Emergency Fund - right? If you've ever read this blog before - I know you do!
Are all of your accounts set up for internet banking? Although most financial institutions are completely on board the technological revolution - believe it or not, some still don't offer online access to accounts, transfers of funds or bill paying. If your bank is one of the rare ones still in the dark ages - find another bank! Being able to check your accounts with a couple of clicks can give you great peace of mind.
Parents - it is essential you have the ability to transfer money into your student's account - should the need arise. Make sure you have linked to their account if you are with the same bank - or make sure you have everything you need if they are with a different bank (branch number, transit number and exact account number). With any luck - your student is going to be so financially responsible, you won't need to send them money - they'll be paying you back some money at the end of the school year!!! Keep hope alive!
Does your student financial office have your proper information? Have you changed banks - or even account types since filling out your scholarship and financial aid forms? Make sure you get the proper account information into the hands - or email account - of the people who are going to be giving you money to keep going to school.
The idea of going away to school is to enjoy life on your own - take in all the experiences you can at your school - and, of course, get a fantastic education. Being set up to handle your finances in the easiest way possible will allow you to enjoy everything about your new situation - without 'sweating the money'.
I would like to wish the millions of new college and university students all the best for the coming year. Live it - Love it - and Learn It All!! (and stay a Money Smart Student to the end) Cheers!!

Summer Savings Time!

I hope everyone is enjoying the summer so far. It's been a hot one in my area without a lot of rain - which is great for activities but not so great for the lawns or crops. A little rain in small doses might be just what the doctor ordered to help get things growing again.
Speaking of growing - I hope my student readers with summer jobs have been growing their savings accounts! Now is the time to sock away every bit of extra cash you can. The more you can save now the easier it will be for you as you begin another school year in September. I would recommend one of the following two formulas - either 35-35-30 or 50-25-25. What do those numbers mean, you ask? I don't know...just kidding. That would mean the ratios of your income when it comes to saving for long term - saving for short term - and money to live on now. If you make under $500 every two weeks from your summer job - save 35 percent for long term (maybe for your emergency fund while you are at school), 35 percent for short term (supplies, and anything else you will soon need to get set for school), and 30 percent to live on right now for things like gas, entertainment (it is summer after all!), and immediate bills. Change over to the second formula if you make more than $500 every two weeks because you can afford to save a little more.
I know it's hard to keep on top of your school year finances while you are enjoying your summer. Doing a little planning now, however, will make life so much easier for you when you do head off to school in September. Keep up the great work. Cheers!

February - Time to Focus on Finances!

Are you ready? It's February already! That means it's time for high school seniors to really start thinking about what's up with their finances for next year. Time to ask yourself, and your parents, some very important questions.
What is it really going to cost me to go away to school next year? Where is the money going to come from for tuition expenses? Have I applied for every scholarship I could possibly qualify for - and if not, what are the deadlines for some more? Where is my book money and living money coming from? Have I got a plan in place to save the money I need from my current job - or the job I plan to get in the summer? How much will I need to save each pay to set up my Emergency Fund for when I'm away?
It's all about being connected to your finances and knowing, or finding out, the answers to these questions, and more. It may seem daunting trying to figure out all the possible money situations you might run into. But it would be even more challenging if you went away to college only to find out halfway through the year that you really can't afford to be there - or that you didn't plan properly and there's too much month left at the end of the money.
Answer the tough questions now and, I promise you, your first year away at college will be that much more stress-free and enjoyable.
Cheers!

Another School Year Begins!

Happy September everybody! Another school year is now underway across North America and students everywhere are getting back into their routine. I'm glad to be back here with you as Money Smart Students ramps it up in 2011-12 - ready to help students everywhere get 'ready for the real world'.
I just want to touch on a quick subject today - and that is the need for highschool seniors to start RIGHT NOW thinking about how they are going to pay for college a year from now. Once you've settled in this week the first place you should visit is your school's Guidance Office, or Student Services, or whatever it's called in your area. Talk to your counsellors about options for college including bursaries and scholarships. Some of those have very early deadlines and finding out about a great money source after it's closed for applications won't help you at all.
Are you going to be setting aside some of your part-time income for the next year to help with expenses in college? Can you find a secondary source of income and put ALL of that towards your college fund? There's a lot to think about NOW as you start down the road to college over the next 12 months.
There were lots of studies this past summer showing that a college education is well worth the expense when it comes to earnings later in life. Putting a plan in place to minimize the need for student loans and other financing will give you a leg up on your future after college is finished.
Welcome back everyone - I'm glad to be here again as well.

How Are You 'Spending' Your Summer?

It's that wonderful time of the year for college/university students - exams are finished, classes have been passed (hopefully) - and now it's time to enjoy the summer. But the question begs to be asked - How are you going to 'spend' your summer? If you're lucky enough to already have a job, congratulations! It's still a tough grind out there. If you haven't found a job yet, keep plugging away and something will come along.
If you are returning to school in September you will hopefully have a plan in place for the money you are going to earn. How much are you going to set aside for an emergency fund? What about some personal money to last throughout next school year? Are you going to be responsible for your own expenses? How much can you set aside if you are diligent and reduce the amount of student loans you will need? These are all questions you need to sit down and think about before you get too far into the summer.
If you get your pay through direct deposit you should be able to ask your financial institution to automatically move your money into one or more designated accounts. This will help greatly in splitting up your funds and jump starting your savings plans. Create a separate account for each designated need - emergency, expenses, books, food, etc. The easier you make it for yourself, the more likely you will be to stick to the plan. Make sure you leave yourself a little wiggle room, though, so you can enjoy your time off this summer as well. It is, after all, your well-earned break from the hard work you did at school last year.
Bottom line - make a plan NOW for how you are going to 'spend' your summer. You'll be much better off when September comes along if you take the time to put your money plan in place before you get wrapped up at the beach, or the cottage, or at work this summer. Cheers!

The Time Is Now!!

Now is the time to start planning your finances for NEXT school year - especially if it will be your first year away at college/university. Where is my money going to come from? How much will I need? How do I get the maximum benefit out of every dollar I plan on spending?
There are a lot of things to think about. The more time you take to do some research - find extra sources of income (scholarships/grants) - and prepare yourself, the easier the transition will be to life on your own.
There are lots of resources available on the internet to help you manage your finances. There are budgetting tools galore and general information by the website-full.
Take the time NOW to start managing your money in preparation for next year. You'll be glad you did once you take those first steps out into the Real World!