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Your daughter begs you to buy her a sweater. What do you say?
Your son announces he’s lost another lunch bag at school. What do you do?
For parents who give their children an allowance, the answer is easy, but figuring out how to handle the allowance situation just seems to generate more questions than it answers!
From my work with parents, I can tell you the three most frequently asked questions I hear regarding allowances along with the answers to help you get on your way.
*Alyson sits on BMO’s SmartSteps for Parents team of experts that created an interactive site for families to help parents teach financial literacy.
Insomnia is the worst. Why is it that everything seems way scarier and more stressful in the middle of the night? Trying to turn those thoughts off can be impossible when you’re tossing and turning, viciously aware of the dwindling hours between you and the sound of the morning alarm.
According to a survey by website Manilla.com, the number one answer among women of “what keeps you up at night?” is financial worries. That’s right—30 percent of women said money stress is keeping them up at night.
Next to money, work stress and ‘to-do lists’ are the second-most common reasons for insomnia among women; 18 percent of women blamed these for keeping them awake.
Nothing keeps men awake
Interestingly (or perhaps frighteningly), the number one factor keeping men up at night is ‘nothing’—as cited by 35 percent of men. We presume this means these men are enjoying peaceful and untroubled sleep. Or perhaps ‘nothing’ means: “As if I would tell a survey what keeps me awake at night! Nothing scares me, of course!”
Organizing makes us happy
According to the survey, disorganization and clutter are driving more women crazy than men (surprise, surprise—not). In fact, 73 percent of women claim they are frustrated by household disorganization, 38 percent of women complain about the waste of paper mail and 32 percent complain of the clutter. By comparison, fewer men (59 percent) complain that they are similarly frustrated.
Apparently, 50 percent of women and 41 percent of men feel relaxed when they are organized. Indeed, 41 percent and 37 percent feel downright happy as a result. (We concur!)
Gender parity
Whether you are extremely organized…or not, one survey finding is none too surprising: half of women and half of men surveyed say they forgot to pay at least one bill over the past year. Uh oh…
Tips to quell the chaos
Here are a few ways you can get your household finances more organized:
Yoda and sleep
As Yoda said, “Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering.” It’s usually an element of fear (and avoidance of fear) that leads you to toss unopened bills aside and not make them a priority. And then you get angry with yourself when you can’t find the bills, or forget to pay them and you end up paying more in late fees and credit card interest. Which in turn makes you hate the service provider. And you suffer by not sleeping at night, wondering which utility you forgot to pay. (It’s all so complicated!)
The solution: by keeping your finances organized and up to date, not only will you avoid the dark side (i.e. chaos and disorganization), you will have a much better chance of sleeping at night.
And with that—sleep tight!
From mama bears to mama birds, the instinctual ferocity of a mother to protect her young extends to every species. Mothers are hard-wired to protect and rescue their babies, fend off predators and provide a nurturing home environment. Fathers of course, have their own instinctual drives to provide and care for their families, and it is predominantly male attributes that have shaped the world’s businesses and governments. Throughout the women’s movements of the 1960s and 70s, women often took on ‘male traits’ to be successful in a ‘man’s world’. In today’s post-feminist world, however, we see women rising to the top on the merits of their own very female traits.
We’re talking about ‘mamisma’—female strength, resilience and grace under pressure. It’s kind of like machismo, only driven by a female instinct for getting things done in a collaborative, supportive, compassionate manner. Many politicians today bring their mamisma to the table. Angela Merkel, Chancellor of Germany, is one of the most respected leaders trying to calmly steer the Eurozone out of its debt troubles. Thailand, Argentina, Brazil, Peru, Costa Rica, Australia, India, Ireland, Croatia, Iceland and Finland are all countries that currently have female presidents or prime ministers who are leading with their mamisma.
Here in Canada, Dr. Samantha Nutt—co-founder and Executive Director of War Child Canada—exemplifies mamisma in action as one of the country’s most prominent anti-war activists. Dr. Nutt has worked in some of the world’s most violent war zones, providing hands-on help to women and children. She also works at Women’s College Hospital in Toronto and at the University of Toronto in the Department of Family and Community Medicine. Named by Time Magazine as one of Canada’s Five Leading Activists, by the World Economic Forum as one of 200 top young global leaders, and by The Globe and Mail as one of Canada’s Top 100 Most Powerful Women, the 41-year old Dr. Nutt was recently appointed to the Order of Canada.
So, how can we apply our own mamisma to our roles at work? What are the mamisma traits that make a female leader exceptional? Here are a few tips.
The world needs more mothers
Whether you have children or not, you are blessed with the inner female instincts that can equip you to become a powerful mama-bear, among your friends, colleagues and community. We are fortunate to live in a world today where people of all nations are celebrating the virtues of womanhood and using mamisma to make the world a better place. Now get out there and let’s hear you roar!
Actress and comedian Amy Poehler was recently named one of Time magazine’s “100 Most Influential People”. At the award gala in New York, Amy used her acceptance speech to give a shout out to the women who help care for her two children. She encouraged working women everywhere to take a moment to thank their nannies and babysitters: “Those are people who love your children as much as you do, and who inspire them and influence them.”
According to ivillage.com, nearly three-quarters of moms are juggling jobs and families. A recent poll by ivillage.com and TodayMoms.com found that nearly 70 percent of working moms would choose to have an assistant at home rather than an assistant at the office.
Decisions around childcare can be overwhelming. For those without extended family to help take care of the kids, it’s even more fraught with complications. Do you choose daycare or a nanny? If a nanny, live-in or live-out? Does it even make sense to go back to work if your entire paycheque ends up paying for the childcare?
Daycare or not to daycare?
Going by the price of daycare, Ontario is the most expensive province in which to raise a child. The average daycare cost for childcare in Ontario ranges from $33/day for a school-age child to $57/day for an infant. Manitoba offers parents some of the lowest daycare rates, between an average of $15/day for a school-age child to $28/day for an infant.
How much for Mary Poppins?
No matter the province, however, daycare rates tend to be much higher in cities than in rural areas. For urban working moms or those with two or three kids to pay for, hiring a nanny is sometimes more economical than daycare.
According to Today’s Parent, the average weekly salary for a live-out nanny ranges between $450-$750. For a live-in nanny, the average weekly salary is $300 plus room and board. Again, wages vary widely depending on the province you are in.
If you’re planning to sponsor your nanny from abroad, The Human Resources and Skills Development Canada website posts all the wages and requirements you need to know, organized by province, under the “Live-in Caregiver Program”.
What help does the government provide?
For working parents, childcare expenses can be deducted on your tax return through the Working Income Tax Benefit (WIBT). Generally speaking, the lower-income spouse can deduct the childcare expenses up to a maximum of $7,000 for each child under the age of seven, and $4,000 for each child between the ages of seven to sixteen.
A disability tax credit is also available for kids with physical or mental impairments and the age limit is broader than for other kids. Childcare expenses in this case may be deducted up to a maximum of $10,000.
Remember to keep your receipts for these expenses. A guide to eligible expenses can be found on the Canada Revenue Agency’s (CRA) website, Form T778. Be aware that the total deduction for these expenses cannot exceed two-thirds of your earned income.
In addition to tax credits, the federal and provincial governments offer programs to help with childcare costs based on income, such as the Canada Child Tax Benefit (CCTB). The federal government also provides a Universal Childcare Benefit (UCCB) of $100 a month for each child under the age of six, irrespective of your family income. (While it won’t make much of a dent in daycare fees, that should cover babysitting for a couple date nights out for mom and dad, at the very least!)
To help you sort out what you may be eligible for, check with CRA’s benefits calculator or better yet, talk to your tax advisor.
The choice to stay at home
According to insure.com, an online American insurance brokerage and information site, if you were to pay professional service providers to do all the various tasks and errands a typical mom does in a year, it would cost $61,436. This includes activities such as cooking, driving, cleaning, party planning, shopping and keeping an eye on those kids. With childcare directly responsible for about half of that cost, it makes financial sense for many women to choose not to work outside the home.
As a sidebar, insure.com makes a great point that the “hidden costs” of all these services provided by mom ought to be insured. Quite often couples ensure they have life insurance for the breadwinner and forget that the person who stays at home with the kids should be covered by adequate life insurance as well.
So many decisions
The childcare choice is ultimately a highly personal one. Only you know what the right kind of care is for your family. For those working moms who have helpers, whether family members, daycare centres or nannies, there is no doubt they would consider these caregivers worth their weight in gold.
As Amy said at the Time 100 gala: “On behalf of every sister and mother and person who stands in your kitchen and helps you love your child, I say thank you—and I celebrate you tonight.” Let’s all go home and do the same!
You don’t have to be Kate Gosselin, an unemployed reality television star and single mom with a brood of eight kids, to be stressed about the costs of paying for your kids’ post-secondary education. Most parents are concerned (and confused) about how to set aside money in a Registered Education Savings Plan. Enter Golden Girl Finance expert Rhonda Sherwood, a Wealth Advisor at ScotiaMcLeod in Vancouver, to help sort through the RESP rulebook and provide savvy ‘school-savings’ tips to get started!
Rhonda advises that RESPs are pretty standard, since they are such highly regulated plans. Therefore, you won’t gain much from shopping around. Choose an institution where you have a relationship, bring in a budget of what you can spend and ask an advisor to help you to choose investments. Hopefully, your prodigy will go on to make you proud!
Fact: marriage is hard. Fact: talking about money is awkward. Put these together and you’ve got a combination that most people prefer to avoid: talking to your spouse about money.
It is hardly surprising that money is the number one stumbling block among couples, given that money issues are often loaded with prejudices, guilt, fear and anxiety. Avoiding discussions that could pre-empt later arguments may be shortsighted, but in the moment, it just seems, well, easier.
What if there was a way you could make money discussions [http://www.goldengirlfinance.ca/articles/marriage-couples/wedding-pre-game-talk-five-must-discuss-topics-before-saying-i-do] with your honey more pleasant and less likely to spiral out of control and into a fight? Would you be willing to try?
Financial experts advise that the right thing to do is hold a monthly meeting to evaluate the state of household finances, debt and savings goals. Involving your kids in the discussion is also a great way to teach them about transparency and responsibility, while reinforcing the act of making decisions as a family.
While there is no one way of doing things that works for everyone, here are a few do’s and don’ts to help you find the right mix of love and money.
Controlling tempers and withholding judgments seems to be the toughest part about money discussions. If matters of resentment or anger arise, tread carefully, hold hands and recognize that getting to the heart of the matter can only help in the long run.
You did say for richer or poorer, right? Here’s hoping for richer! And remember—the family that saves together, stays together.
Whether you’re in the planning stages, growing into your chic maternity wear or have a little one in the nursery already, you know that being a parent changes everything. So while you may wonder if you’ll ever fit into your skinny jeans again (you will), you wonder more about your baby’s future, how to give your child the best of everything and how to protect your entire family. By putting the right plans in place from the get-go, you can stop worrying about the what-ifs.
Part of raising kids is letting them make mistakes. As they get older, their mistakes will grow right along with them. (Case in point: Cutting a doll’s hair at age four is way less serious than getting a crush’s name tattooed on one’s back at 18. Agree?)
But life is full of surprises—some pleasant, some not so much. And it’s the ones that change your child’s life forever that you worry about the most. Since you and your spouse (or partner) are your child’s primary providers, you must think of the unthinkable: what if something happens to one or both of you, or even your child?
Sure, it’s hard to think about. But the best thing you can do is have a plan in place to protect your family. Here’s what you need to know.
You Need Life Insurance
First, get enough life insurance for you and your spouse/partner to provide long-term financial security for your family. This is important because life insurance can:
Ensure all of your debts would be covered should something happen to you or your spouse/partner. Like most young families, you probably have few investments and large debts (a mortgage, car loan and outstanding credit card debt, for example).
Replace a breadwinner’s lost income or pay for childcare should either parent die, ideally until the children reach 18 years of age or older.
Cover funeral expenses and buy the time needed for a grieving family to adjust to the loss of a parent.
You may also consider securing a basic term life insurance policy and/or critical illness policy for your child. Why would they need it? It starts them on a financial path early on and ensures that they can build on that plan and not get denied coverage down the road should they get ill — as you pray they won’t — at a young age. Your insurance provider/financial planner can guide you in the right direction.
You Need Up-to-Date Wills
You and your spouse/partner need to have valid, up-to-date wills. If you don’t, your estate will be divided according to provincial laws, which may not reflect your wishes. An up-to-date will allows you to:
Appoint a representative to administer your estate. Depending on where you live, your representative may be called an executor, estate trustee or liquidator. This person or company is responsible for settling with creditors and distributing your assets according to the terms of your will. It’s a good idea to name an alternative representative in case your first choice is unable or unwilling to accept the duties.
Appoint a guardian, or “tutor” in Quebec, to care for your dependent children.
Set up a testamentary trust within your will. A trust allows you to leave instructions as to how certain estate assets are to be managed over time, rather than giving them to a beneficiary outright. For instance, you might set up a testamentary trust to provide regular income or to pay for post-secondary education for your children and manage their assets on their behalf until they reach a specified age.
You Need Powers of Attorney
A will is vital, but it doesn’t come into effect until you pass away. You also need to consider the possibility of becoming seriously ill or disabled and unable to make financial decisions. In that case, you want to protect your property and your personal care. Here’s why:
To protect your property. To protect against this contingency, you need a continuing power of attorney for property. (In Quebec, it’s called a mandate in anticipation of incapacity.)
To protect your personal care. Similarly, a power of attorney for personal care enables you to name someone to make decisions about your medical care.
Get the Right Advice
Life insurance, wills and powers of attorney are the building blocks of your estate plan. With professional advice, you can use them to protect your family now and in the future.
Yes, it can be complicated. Yes, it can be a difficult conversation to have. But the peace of mind that comes with having a plan of protection in place is priceless.
All this to think about and your child hasn’t even started driving, dating—or perhaps even moved beyond diapers—yet! Just remember that having an estate plan in place helps ensure you can give your children the best of everything. And isn’t that what every parent wants?
Remember your favourite child stars? From their pudgy faces to their perfect dimples, these child prodigies had it made. Fame, fortune and a fantastic bank account—all before the age of 14. But then disaster struck. The baby fat melted, the partying kicked in, and suddenly these child stars were near bankrupt and barely getting by. Once the cameras stopped rolling, stars like Gary Coleman, Danny Bonaduce, and more recently, Lindsay Lohan, found themselves in a world of excess, apparently without any strong parental figure to help them stay on the straight and narrow.
When it comes to kids and money, it’s all too easy to lead them down a road of excess and expectations because simply put, we want our kids to have it all. But instead of fearing that your child may do without, you should instead be focusing on teaching important financial principles early in life. Child star or not, the sooner you teach your daughter or son money smarts, the more you can rest assured that your child will indeed not ‘want’ as she gets older—because smart girl, she can fend for herself!
Consider these five lessons to get you started:
Teach your children about value
Allowances are a great way to teach children about money and its value, provided the payment is offered as a reward rather than a bribe. The trick here is being able to distinguish the difference. A reward is provided when the child goes above and beyond that which is expected. A bribe is offered when the child refuses to complete assigned tasks—and needs a little incentive.
By rewarding your child only for exceptional service, they’ll quickly learn the value of hard work (and understand that sometimes in life you have to do things that you don’t like). Furthermore, you’re helping your child understand that each member of the family has a responsibility to contribute to the overall functioning and well-being of the family, thereby instilling a sense of responsibility and respect that money simply can’t buy.
Of course, that’s not to say that giving your kids an allowance is an entirely bad idea. If the purpose of the allowance is to teach your children how to manage money and expectations, then you’re on the right track. Just remember to be consistent and firm with what does and doesn’t warrant payment.
The three S’s
If your child receives an allowance or financial gift, make sure it is understood exactly how this money can—and should—be used. The easiest way to do this is to employ the three S’s:
Sit down with your child and help him or her understand why each of the S’s is important and how each one affects the other. Teaching your child how to strike a balance between these three areas is the first step to early financial planning and budgeting basics.
Don’t just say no
It comes as no surprise that children hate it when they’re told “no”. While many parents chalk this up to spoiled-child syndrome, that isn’t necessarily the case. More often than not, it’s because the child doesn’t understand the reason behind the refusal (and no, “because I said so” is not a valid justification). Granted, as a parent you have the final say, but when you’re a kid, this really doesn’t seem fair. So instead of simply laying down the law, take the time to explain to your child the reason behind your answer. The next time your child asks for a new toy at the store, tell them “no, because…” and have them repeat it back to you to make sure they fully understand. This exercise will not only help them comprehend their current predicament, but it will teach them to stop and think before acting on an impulse. (After all, impulse buying is a major contributing factor to consumer debt in adults.)
Plan for the future
Teach your child how to effectively manage money through a series of goal-setting exercises. Part of these exercises should be helping your child to identify his or her needs and then creating a plan that will help achieve the final goal.
For example, a need could be another pair of trendy sneakers. Step one could involve taking your child to the store to look at the various kinds of sneakers and to compare prices. If your child immediately gravitates towards the most expensive pair, stop and explain to them how this will affect their finances and how it might impact some of their other financial goals.
Encourage shopping around for better prices. Whether your child decides to purchase the expensive sneakers or not is irrelevant. What is important is that he or she has learned how current financial decisions can impact future goals. As long as the child is aware and accountable for the end decision, the lesson has not been wasted.
Make it fun!
Financial planning doesn’t have to be boring. Make it fun with games like Monopoly, Acquire or Money. These board games make learning about money fun and rewarding. If your child is too young to play these games, sit them down with a jar full of coins and help them to make change. This will help your child to identify the different types of coins, while at the same time improving math skills.
It’s about making mistakes
It doesn’t matter if your child is a budding movie star or an average fifth grader. Ultimately, he or she is going to make financial mistakes—and it’s your job as a parent to make sure that these errors are executed under your supervision so that the proper lessons can be learned.
Along those lines, as much as you may want to jump in, don’t give in to the urge to save your child when those mistakes are inevitably made; it’s very often the natural consequences of making mistakes that teaches the best lessons of all.
It starts with you
Perhaps most importantly, it’s your job to become a financial role model for your child. Just look at Hollywood stars like Neil Patrick Harris and Jodie Foster—it’s safe to say that these former child actors benefited from strong financial role models. And while your child may not have the income potential of a triple threat like Doogie Howser, she needs financial guidance nonetheless—give it to her now.
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I tend to disagree with the answer to question number three. Suze Orman’s advice is to relate allowances with chores. She talks about children being required to complete the chores that they are always responsible for (ex. keep their rooms tidy, clean off the table etc.) prior to being able to “make some money” for themselves. She indicates that parents should create a list of chores that children can complete in order to make money and tie a value to those extra chores (things that are not necessarily the child’s daily responsibilities). Children should be able to complete these extra chores in order of lowest paying to highest paying (just like in the real workforce - you do not start out at the top). I think that Suze’s advice is great and will assist with employment skills. I like your advice on starting as early as possible. I would also suggest that children be taught that for every dollar they are earning, they put a dime into savings. It is just as important to teach about saving at an early age!