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How to raise financially literate children
by FCNB on 


How to raise financially literate children

Teaching your children money basics is as important as helping them develop reading, writing and math skills. Financial literacy is an essential life skill. Kids don’t automatically pick up good money habits—we have to teach them, and it’s never too early to start.

If you’ve tried to teach your kids about the value of a dollar and felt like you were over your head, don’t worry. You aren’t alone. In fact, we have heard from many New Brunswickers that they don’t know where to start when they try to talk to their kids about money.

Talking about money doesn't have to be intimidating or complicated. Teaching children about money can easily be integrated into daily family activities. In fact, teachable moments are a parent’s best friend. Shopping, planning a trip or going to the bank are opportunities to introduce financial concepts, to explain the difference between needs and wants, and to talk about saving, spending, and budgeting decisions. A simple question or comment about something they see every day can open the door to a much bigger conversation.

And remember to always lead by example. Kids are very observant, and pick up cues from your behaviour! To make sure you are financially fit, check out I’m Worth It! This program provides excellent information and strategies you can use when planning for your financial future and encourages you to spend based on your values, or what is most important in your life.

Here are some tips and ideas for how to introduce your children to financial literacy now so they grow up to be financially confident teens and adults. Talk about financial goals and saving
Help your children make smart spending decisions by teaching them how to set financial goals. The next time your child asks for something new, whether it’s an iPad, the latest toy, brand name clothing, or sports equipment, turn it into a teachable moment by encouraging them to set a goal and save their money to buy the item, or pay for a portion of it themselves.

Use the goal setting template on page 55 of Make it Count to create a savings plan to achieve their goal and keep track of their progress. But remember, all work and no play makes budgeting a dull chore! If they don’t get to enjoy the money they worked hard for, they won’t stick to any savings plan. Reward them for sticking to their plan and show them that being smart with their money doesn’t have to mean going without any fun! Download the Goal Setting Activity

Teach them to keep track of money

Your children may start receiving or earning money from a young age through allowances, gifts, and odd jobs like babysitting. As soon as your children start receiving money, help them keep track of it by teaching them how to use a budget. Download the Budgeting Activity
Help your child track their earnings and spending. Use the monthly budget sheet on page 51 of Make it Count. At the end of the month, look at their budget together and talk about what they enjoyed or regretted spending their money on and why. Tracking spending can be an eye-opening experience. Seeing where their money has gone can help them spend more mindfully in the future.

Once they have gotten used to tracking their spending, take it to the next level by having them set aside money for savings and making a plan for how they would like to spend their money next month.

Also, taking your child with you to the grocery store can be a great opportunity to talk about avoiding impulse purchases and sticking to a budget. Shop with a list and show them how you stick to purchasing just the items on your list. When they reach for the colourful box of candy next to the checkout, talk about the importance of using the list so you don’t spend more money than you have. 

Describe healthy use of plastic

Children are less and less likely to interact with physical cash, and transactions made with plastic (debit or credit cards) make it harder to feel the “pain” of parting with money. For older children, a prepaid debit or credit card can be a lower-risk way of introducing them to making purchases by swiping a card. It can help reinforce that a debit or credit card is not a magic, bottomless supply of money.

5 things your child should know about credit:

  • You need to have a clear plan for paying debt back. Taking on debt is convenient in the short term, but you shouldn’t borrow more than you can afford. And you should consider other options, such as saving up for a purchase, before impulsively swiping your card.
  • Credit is not the same thing as free money. It’s the opposite – borrowing money costs you more, as you have to pay back what you borrowed plus interest.
  • Using credit to buy things should only be done in certain circumstances. Credit cards are useful for online shopping that fits within your budget. Using it to pay other expenses may not be a good idea unless you’ve budgeted properly to pay it off in full.
  • You should think about the lifespan of a product before buying it on credit. For instance, if you want to buy a video game that you think you’ll be done playing within three months, but it will take five months to repay the debt, it might not be wise to borrow money for that purchase.
  • You should think about the value of the product to you. For parents, this is a great opportunity to talk about needs and wants and get your child thinking about the idea of value for money.

Teach them that money can be fun.

Being responsible with our money is important, but it’s also important to do enjoyable things with it so that we don’t feel like saving is a chore. That being said, overspending on entertainment is easy to do. A night at the movies for a family of four can easily add up to $80 or more! Show your children they can have fun and be smart with their money at the same time! Download the Recreational Spending Activity

Special advice for older students

Tuition, books, housing, groceries, bills…paying for post-secondary education and avoiding a heavy debt load is a big challenge– but not impossible. You can find lots of ways to save and manage your money while you’re studying. There are several ways to set money aside to help take away some of your stress. Here are a few tips you can use to save money:

  • Apply for as many scholarships, bursaries and grants as you can. Millions of dollars go unclaimed every year in Canada.  Here are some places you can start looking:
  • Start budget planning using our handy student budgeting tool. Keep in mind how much money you have, how much you need to spend and how much you can spend. 
  • Buy used books or borrow them from the library. Many universities have dedicated Facebook pages where students can sell their used books or even post requests for specific books.
  • Never do a grocery run when you’re already hungry. You’re more likely to spend more money and make impulse purchases that will dip into your budget.
  • Don’t buy brand name items. Most of the no-name brand items contain the same ingredients, but at a much cheaper price.
  • Try to limit how often you eat in restaurants. Most universities and colleges offer meal plans, so check with yours to find a meal plan that meets your needs.
  • If you shop often at a particular store, consider getting a membership card or points card for that store. Some retailers offer points cards that help you save money through discounts or other benefits.

Remember, it’s never too early to help your children start forming good financial habits! Hopefully these tips and ideas give you some ideas for how you can start talking about money with your children. Tomorrow’s smart spenders are today’s kids! Let’s all make sure they have the tools they need.



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Does your Budget Spark Joy?
by FCNB on 


Does your Budget Spark Joy?

Are you swept up in the decluttering craze that’s been sweeping social media, blogs and TV screens the world over?  As part of your spring cleaning and decluttering, ask yourself if your budget is sparking much joy.  And though you can’t just toss out your budget if it does not spark joy, you can employ some my tidy up tips for your finances to declutter your budget! 

1 - Track your Spending
Keep track of everything you spend in the run of a day. Use an app, a notebook, save receipts, or use post-it notes.  Do whatever works for you.  A lot of disorderly spending habits will probably pop out at you that can be tidied up or tossed out!  For example, I noticed I was spending about $35 a week on take-out coffee (that adds up to almost $1700 a year!!).  I went out and bought a programmable coffee maker on sale for $25.  Not only can I get my daily coffee fix and wake up to a fresh pot every morning, I’m now saving about $1600 a year on coffee.   

2 -  Get Organized
Do you find yourself so lost in paper or e-mail clutter that bills are falling behind?  Even if you have the money to pay them on time, missing payments because of disorganization can leave you with some hefty late fees.  Declutter the billing process by calling your service providers and having the billing dates changed to line up with pay days.  Then set up online payments to be made automatically on the day the bills come due.  Your bills will always be paid on time without having to make a trip to the payment centre or mail a cheque.  And best of all, no more late payment fees!

3 – Plan your meals
Do you find your grocery bill is getting out of hand?  It’s easy for your grocery budget to balloon when you go to the grocery store hungry or unprepared.  To avoid a disorganized food budget, sit down for about a half hour before going grocery shopping and plan out your meals for the week.  Shop your cupboards and pantry first, and get your meal plan to line up with what you’ve already got in stock.  Organize your kitchen to get a handle of the food you have.  Then make up a list of any remaining ingredients and stick to that list.  Avoid temptation at the store with the mantra: “If you needed it, it would already be on your list.”  Using this process, I’m able to keep my grocery budget at $150 a week for a family of 3.

4 – Change your mindset
I love shopping.  Home décor, clothes, craft supplies, you name it.  To help curb my impulse shopping (and reduce the clutter and the buyer’s remorse I often feel after a shopping spree), I have my own version of does it spark joy: I ask myself “Do I NEED this, or do I WANT this”.  I try and determine what value the item will bring to my life, and where it will live in my house (in an ongoing effort to reduce clutter).  If I’m still on the fence, as a final check, I analyse the price in terms of “hours worked”.  If I buy this pair of jeans for $90 - how many hours do I have to work to pay for them?  This has really helped me avoid impulse purchases, and by doing so has saved me money and added clutter. 

By making these 4 changes, I’ve been able to tidy up my spending, organize my budget and relieve some money stress.  My budget now has room to put money towards short-term savings goals and long-term retirement savings goals.  Not only that, I feel much more empowered and I spend less time worrying about how to pay next month’s bills! When you are trying to clean up your spending, make sure the money saving tips work for you. 

Some of the changes may be a bit of a challenge to get used to at first, but it is worth the effort.  But remember- if you’re trying to follow budgeting tips that are completely out of sync with your values and goals, or if they make you absolutely miserable, realistically you’re never going to stick to them.  So start small with one or two smart spending habits and see how it goes.  You can build from there!  Trust me, saving money becomes addictive pretty quickly and before long you’ll be seeing what other tips you can use. 

Good luck and enjoy watching your savings account grow!!
-Marissa



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Fraud for Shelter & Fraud for Title
by FCNB on 


Fraud for Shelter & Fraud for Title

Mortgage fraud is an issue that regulators, governments and financial institutions take very seriously – and it seems to be on the rise.  In fact, a 2017 an Equifax study found that suspected mortgage fraud has increased by 52% since 2013. 

In recent years, changes to interest rates and borrowing rules, and rising home prices and consumer debt loads has made it more difficult to qualify for a mortgage, leading borrowers to take the more drastic measure of lying on their mortgage application to be approved.  In fact, the same Equifax study found that 13% of Canadians would be comfortable lying about their income to be approved for a mortgage. 

You must be honest about your finances when applying for a mortgage.  Lying or exaggerating information on your application may be a criminal offence, regardless of the reasons behind it.
Protect yourself against mortgage fraud or engaging in fraud to qualify for a mortgage.  Here we’ll help you to recognize it, know the consequences, and protect yourself from becoming involved, or being victimized by a scammer.

Recognize it

Mortgage fraud can be committed by the homebuyer who knowingly incorrectly fills out an application, or by a scammer trying to defraud homebuyers.  Using a licensed mortgage associate or broker can also help ensure you aren’t involved in mortgage fraud.  Check the licence status of any associate or broker you are considering working with.

Fraud Committed by the Homebuyer:

The following types of mortgage fraud are easily avoided by being honest on your application and not applying for a mortgage on someone else’s behalf.

Fraud for Profit (value fraud) – Fraud for profit involves deceiving a mortgage lender or homebuyer about the property’s true value or the value of renovations purported to have been completed, or providing forged appraisals to the purchaser, lender or both. The con artist typically purchases the property and then flips it to a complicit purchaser at an artificially inflated price.

Fraud for Shelter/Housing – Lying, purposely leaving out or exaggerating information to qualify for a mortgage larger than your income or credit history allows – with or without the knowledge of the professionals you are working with – is called fraud for shelter, and the consequences can be severe.  Even though the homebuyer may intend to live in the property and pay back the loan, lying on a mortgage application is still considered fraud.  Once you sign the application, you are responsible for the lie, regardless of whose idea it was or the reason for it.  It can be tough, but if a home is out of your price range, walk away, no matter how perfect it is.

Always fill out your mortgage application with accurate information and always read any documents before signing. If you notice inaccurate information, do not sign the contract.

Straw Buyer – The most common form of mortgage fraud, called straw buying, occurs when a con artist convinces someone with good credit to put their name on a mortgage application for a home that someone else will be buying, usually in return for the promise of a big payday. Once the mortgage is issued, however, the con artist takes off with the extra mortgage funds and the legal borrower on the mortgage is now liable for the mortgage payments. You may do it with good intentions (to help your children get into a home they otherwise wouldn’t be approved for), or you may be approached by a scammer offering you a big payout in return for using your personal information on the application.  Either way, you are on legally responsible for the mortgage payments. 

Fraud Committed by Scam Artists

Unfortunately, there are also bad actors and scam artists looking to take advantage of new homeowners. The Financial Services Commission of Ontario have some great red flags of mortgage fraud.

Fraud for Title (Identity theft) – In short, title fraud is when a scam artist pretends to be the home owner so they can transfer the ownership or title of a property into their name, get a new mortgage on the property, or sell the home.  Once the funds are advanced, the scammer leaves with the money. This type of identity theft can leave a homeowner forced to take legal steps to prove the fraud and regain ownership of their property.

Foreclosure Fraud – A scammer targets homeowners who may be at risk of defaulting on their mortgage, promising to help them avoid foreclosure.  They may offer a “consolidation” plan, and provide up-front cash to cover immediate bills. They offer to give you a loan or a little help with your mortgage in exchange for signing a transfer of title to them, which is held as security. Then the scam artist collects “debt payments” to cover the mortgage payments.  In reality, they do not deliver the services they promise – the mortgage payments are never made and the property may even be refinanced or sold as part of the consolidation.  The scammer takes off with the funds, leaving the original homeowner without title to their property and having to deal with debt-collection proceedings.

Reverse Mortgage Fraud – Reverse mortgages are a legitimate product that may be a useful tool for individuals in certain limited circumstances but are not for everyone.  A reverse mortgage is designed for homeowners 55 years of age and older. This type of loan requires no monthly mortgage payments. The loan is secured by the equity in your home (the difference between the value of your home and the unpaid balance of your mortgage.)  Instead of making mortgage payments, the payments and interest on the mortgage accumulates and payment is deferred until you sell your home, or you no longer live in your home as your principal residence. Scam artists may take advantage of this product by manipulating a senior into borrowing against the equity in their home, and then pocketing the loan proceeds. Reverse mortgages are not appropriate for everyone and should be carefully considered.  Speak to a trusted advisor to fully understand all your options before deciding.

Protect Yourself

Here are some best practices you can follow to protect your name, your credit and your family:
  • Be honest on your application – do not omit, lie or exaggerate information
  • Be cautious if you are offered services or monetary kickbacks to help you get a mortgage with a specific lender or to save you money on your mortgage – especially if you have been declined elsewhere.
  • Never transfer title of your property to someone promising to help you pay your mortgage
  • Never sign anything until you have fully read the document and you understand and agree to what you are signing
  • Never be pressured to agree to or enter a mortgage that doesn’t fit your needs
  • Never pay mortgage brokerage or lender fees and payments related to residential mortgages in cash or directly to a person.  These fees are collected and disbursed by your lawyer.  An exception may be the appraisal fee to the appraisal company once you receive the invoice.
  • Get all information in writing and don’t rely on a verbal deal.
  • Do not apply for a mortgage on behalf of someone else, or add your name to a mortgage unless you full intend to buy the property.
  • Do a land title search – this will show if anyone else has a financial interest in the home and any mortgage or liens already registered on the title.
  • Secure your deposit – make sure your funds are held “in trust”.
  • Consult your own layer – ask your lawyer about title insurance to protect against title fraud.
  • Use only licensed real estate professionals and mortgage brokers.

It’s also important to know the red flags of identity theft and how to protect yourself:
  • Watch for and report unusual activity on your credit report. Applications for credit, loans, or mortgages that you didn’t submit yourself are a major red flag that your identity has been stolen.
  • Regularly monitor your financial statements for unusual transactions.
  • Dispose of mail containing personal information safely.
  • Keep information with the credit bureaus (Equifax and TransUnion) up to date.
  • Place important identification in a safe place.

If you suspect your identity has been stolen, report it to the RCMP or your local police force.

For most New Brunswickers, your home is your largest investment – and it’s important to protect yourself against mortgage fraud or engaging in fraud to qualify for a mortgage. The ramifications can go beyond losing the house of your dreams!

Click here for more information on mortgage fraud.



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How to beer-proof your budget
by FCNB on 


How to beer-proof your budget 

One of my friends and I were talking about how she came to own a machine that carbonates water, despite the fact she barely drinks carbonated water. It turns out she’d bought it on impulse after dinner and drinks out with friends. So, although she rarely uses the machine she keeps it as a reminder that money and alcohol don’t mix. I’ll admit – I love online “window shopping”.  But I’m careful to do it with the right frame of mind. I rarely make a purchase unless I need something that I can find at a great price online, and I keep my credit card away from the computer desk.  I know that online shopping spree with a glass of wine or suds in hand may seem like a great idea at the time, but, along with the credit card statement, I’d also likely be dealing with a hefty case of buyer’s remorse.  Mixing shopping and alcohol can lead to blown budgets, credit card abuse, and even identity theft.

Alcohol knocks down our inhibitions, making us more impulsive and less able to stand up to temptation. We tend to spend more money after a drink or two.  Retailers recognize this and send “happy hour” marketing emails, or they launch online sales later at night to catch the post-bar crowd. To guard against such practices, check out our program “I’m Worth It”.  It’s full of spending and saving information to help you develop your skills as a smart consumer.

Here are some tips to “booze proof” your budget and to avoid waking up with a spending hangover:

Leave credit cards at home or in another room. If you know you’ll be sipping a little, leaving the cards at home can help remove the temptation to spend more than you have.  Leaving your purse or wallet in another room can also help.  The simple act of having to walk to another room may be enough to deter (or at least give you time to reconsider) the purchase. When shopping online, it’s also a good idea to not leave things in your cart that you could come back to and one-click buy later. 

Make a list and stick to it.  If you do have shopping to do, make a list of things you need to purchase.  Put the price of the items on the list for that extra reminder of your budget. That way, even if you do have a little extra “glow” while making purchases, they’re ones you have already included in your budget.  Even though you may get a great deal on an online purchase, if you didn’t budget for it or make a plan to pay off the credit card bill, the added interest charges can end up costing you much more in the long-run.

Shop first.  If you are meeting friends to do some shopping and socializing, and you know there will be alcohol involved, get the shopping done first.  Then relax and enjoy a social drink without worrying about waking up to find out you’re the proud owner of a new cashmere sweater that looks alarmingly similar to one you already own, or a leather recliner for your man-cave that you don’t recall purchasing.  And don’t forget to budget safe transportation home if you do enjoy a social drink or two once the shopping is done!

Always keep receipts. If you do wake up with a regrettable purchase, you may be able to return the item under the store’s return policy.  But remember, a store does not have to take the item back just because you changed your mind.  Each store sets their own return policy, so know the details before you make a purchase.

These tips can help you this holiday season to ensure you don’t end up with more than you bargained or budgeted for.

More information about smart spending, budgeting and preventing buyer’s remorse is available at http://fcnb.ca/consumer.html

 

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Is investing in the cannabis industry right for you?
by FCNB on 


Is investing in the cannabis industry right for you?

For some investors, the fact that cannabis is now legal in Canada might sound like a great investment opportunity. However, it is important to remember that investing in the cannabis industry is similar to investing in any emerging industry -  the hype can feel electrifying, and no one wants to feel they are missing out on a great opportunity - but before acting, be sure that the investment is right for you.

The bottom line with any investment decision is that you need to do your research before you invest your money– not only to ensure the investment suits your needs and goals, but also to understand the implications it could have on your daily life.   This is particularly important in an emerging industry.

Risks of investing in the cannabis industry

Every investment comes with some level of risk. If anyone tells you otherwise, it is too good to be true – and that is a red flag of fraud. Some risks are common across many types of investments, but some may be unique in an emerging industry such as cannabis:

  • Success isn’t a sure thing. This goes for every investment, but it’s especially the case with an emerging industry. Likewise, start-ups can be riskier ventures.  When you invest in an emerging industry or a start-up you should be aware and able to handle the financial loss if you lose your entire investment.

  • Changing regulations could have an impact on you. Growing an emerging industry comes with its fair share of milestones. Issues unique to the cannabis industry may arise as time goes on and industry regulations could change. This could have an impact on your investment, and influence how quickly your investment grows, or whether it grows at all.


Before you Invest

  • Review disclosure documents carefully, and get clarification on anything you don’t understand. You want to be confident in how the investment works as well as your money will be used and the risks you’re taking.

  • Talk to a registered advisor*. They can help you assess whether a particular investment fits within your overall portfolio and whether the risks involved are acceptable for you. You can check the registration status of an adviser at www.aretheyregistered.ca.

While it can be easy to get caught up in the excitement of a new industry, don’t let the flavour of the month push you off track from meeting your investment goals. Similar to any investment, talking with a financial advisor* and determining your financial situation and goals is critical to making an investment decision that is reasonable and suitable for your overall portfolio.

* The terms ‘adviser’ and ‘financial adviser’ used here generally refer to a financial professional (which may include securities dealers; advisers; dealing representatives; advising representatives; or other registrants) and do not indicate a category of registration.  The registration category is more important than a title – always check registration before you invest.


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