Ross Stevenson : Recent Articles

Ross Stevenson, Client Service Specialist

Some people that I meet with express their concerns that they do not want their children to go through financial difficulties like they have. So today I’ve got some advice about how to talk to your children about money, and how you can help them develop good money management skills.

First, it is worth noting children can learn financial management three different ways:

• Participation – This can be done through an allowance which I will discuss in more detail below.
• Instruction – Children need education and some guidance
• Observation – Children’s biggest role models are their parents. It is important you demonstrate good financial behaviour.

Participation

An allowance can be a great tool to teach children about money management. The primary reasons for giving a child an allowance are:

• To develop budgeting skills
• To develop decision making skills
• To ease the parents current budget
• To ease the parent’s future budget

The following are some common questions and response to children’s allowances.

When should an Allowance start? A child is ready to receive an allowance once he or she can count and differentiate the bills and coins. Most kids are ready for allowance around age six.

How much should it be? It really depends on what the allowance will cover, but a generally accepted amount is half the child’s age until they reach their teenage years.

Should an allowance be tied to chores? Most experts agree allowances should not be linked to the completion of chores or responsibilities. Children should do these things not because they are to be rewarded, rather because they are a contributing member of the household.

Instruction

It is important to teach and educate your children about money management. Below are links to free online resources provided by the Office of the Superintendent of Bankruptcy – to help teach your children about money management:

• The Financial Guide – Children: 5 & 6 Years Old
• The Financial Guide – Children: 7 & 8 Years Old
• The Financial Guide – Children: 9 to 12 Years Old
• The Financial Guide – Children: 13 to 15 Years Old
• The Financial Guide for Post-Secondary Students

Observation

Whether or not you children see you fight about money, is going to have a huge impact on their future views of money. It is important as parents to be calm when discussing money management. It is also important to be calm when discussing the issue with them.

A lot of people I meet have a strict budget and cannot afford everything their children wants (who really does?) When a child asks for something you cannot afford, I advise them to be calm and explain that a lot of people are having difficulties with money right now and it is important that we as a family make some changes to the way we spend our money in order to make sure we have enough money for the things we really need. Follow-up with saying something like, “here are some things we have money for and here are some of my ideas about how we can have fun as a family. Do you have any ideas that we can do?”

It is important you allow your child to ask questions and share any concerns and feelings. Reassure them you understand their feelings and explain that is why you are discussing the issue with them and you want them to know that you are on top of it and everything will be ok.

Whether we are talking to our children, friends, family or someone else, money can be a difficult subject for many of us. If you are having financial difficulties I invite you to use our free, 10 second, on-line debt options calculator to review your options. Then call us at 310-PLAN (that’s 310-7526, no area code required, and that number works for all of our Ontario offices), or e-mail us today to arrange for a free initial consultation.

It’s that time of year again, where people look to get a fresh start and improve their lives. Many people do this in the form of New Year’s resolutions. Some of the most common New Year’s resolutions are:

• Improving personal health: some of the popular resolutions in this category are weight loss, quit smoking, exercise more, and drink less alcohol.
• Improving education:  such as obtaining a post-secondary degree, finishing high school, learning a new language or improving grades.
• Self improvement: Getting more organized, learning to cope with stress, and better time management are common goals people set for themselves.
• Getting a better job: Many people aspire to advance their career or change their career field.
• Getting finances in order:  save money and get out of debt are the most common.

Ross Stevenson

If your New Year’s resolution is to get out of debt, there are some steps you need to take. The first step would be to make a summary of your debts and your significant assets, such as your house, car and RRSP.

The next step would be to make a budget. It is important that you make your budget realistic. You don’t need to get complicated; you can simply calculate the monthly family income and where your money is being spent each month.

The final step would be to set financial goals. Consider what is important to you and your family. Think about where you would like to be in the future.  It is easy to get distracted by the things going on in our day-to-day lives and we forget about what we want in the future. New Year’s is an excellent time to evaluate where we are and what goals we have for ourselves.

In order to be in control of your financial situation you need to summarize your significant assets, make a budget, and set realistic goals.

After you do these things, you can evaluate the advantages and disadvantages of all your options, which may include:

• Using your assets to deal with the debt, perhaps by selling your house, or your second car, or cashing in some of your investments
• Getting a debt consolidation loan with a financial institution
• Debt Management Plan
• Consumer Proposal
• Personal Bankruptcy

Which option is right for you? Start by using our free, on-line debt options calculator.

If your New Year’s resolution is to get out of debt and you would like to discuss your options, we are happy to help. You can phone us at 310-PLAN (no area code required), email us, or fill out our online evaluation.  One of our experts will contact you and go through all your options. This could be the Year you finally get out of debt, so contact us today, and let’s get started.