Browsing Tag

Education

Family

Is Your Priority Education Or Retirement?

On the Oprah Winfrey Show a while ago, Suze Orman was helping a family to discover what was most important to them.  The discussion was around whether or not a particular set of parents should be funding their daughters’ post secondary education.

I remember it keenly because the father was extremely determined and he insisted that he and his wife fund their daughters’ education even though it would mean they would be emptying most if not all of their retirement savings in order to do so.

The mother, however, didn’t think this was a good idea.  She had retirement goals and didn’t want to have to forfeit their retirement.  It is not that she didn’t want to help her girls, but she also recognized their need for a retirement nest egg.

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Family

A Great Online Resource For Teaching Kids About Money

There are a lot of great resources online that will help you teach your children about money, whether you are a parent or a teacher.  One website that is a one-stop shop is MoneyInstructor.com.  The website contains all kinds of lesson plans, worksheets, and activities designed to teach kids about finance and other basic subjects.  Most of the lesson plans are geared towards elementary school aged children.

You will find worksheets that teach basic math skills, how to count money, how to tell time, how to read a calendar, and a whole lot more.  There are also activities that teach kids about bank accounts, different types of investments, and so on.

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Investing

Learn to Trade Individual Stocks

While at a concert recently, I met a young woman who told me that she and her husband took a course a few years ago that taught them how to trade individual stocks.

She said, when she first heard about the training she almost didn’t take it, because the course was quite expensive, almost $9000.  However, they decided to take it despite the cost, and she said they were able to recoup the cost of the course within one year of trading stocks.

She recommended that married couples should take the course together, so that both partners are on the same page.  It is much more difficult if only one spouse understands what is going on.

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Money Saving Tips

How to Find Cheap College Textbooks

College students dread the start of every semester. This is because of the rising tuition fees, school supplies and textbooks. Every year, the cost of college is getting higher. It is only wise that students should learn how to cut costs and find alternatives in saving money.

Are you a college student who wants to save money? Worry no more! Did you know that you can save hundreds of dollars with college textbooks? Here are some tips that would help you save a lot of money with textbooks.

1. Save money on used books. Instead of buying a new one, why not consider a used textbook? You can ask other students who are done with the subject if they have the book you are looking for. There are also web sites on the Internet that sell cheap college textbooks.

2. Look for other alternatives. You may consult with your professor if you can buy the older edition of the book. An older edition of a college textbook almost has the same content as the newest edition most of the time. Buying an older edition can save you almost half the price of the latest one.

3. Required or recommended? Ask your professor whether the book is required or just recommended. If the book is just recommended, you may just read the book from your college library.

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Investing

Start Saving Now For Your Children’s Education

the time to start saving for your children's education is nowDo you hope that your children will one day get a post secondary education?  Are you planning on helping them out with funding at least part of it?  If so, I would highly recommend that you begin saving now.  For Canadians, a Registered Education Savings Plan (RESP) is a good option.

When you contribute to an RESP, the Canadian government will provide grants and bonds that will aid you in helping to save for your children’s education.  Although your contributions to an RESP are not tax deductible, the earnings are tax sheltered until withdrawn and are taxable to your children at a much lower tax bracket.

The earlier you start saving, the better.  To illustrate this, let’s imagine that you want to fund 4 years of post secondary education for your child.  Let’s assume that in 2009 it costs $7000 per year for tuition, and that your child will begin university at age 18. Taking into account inflation, if you begin to save within an RESP when your child is first born, you will only need to tuck away $80 per month for 18 years. That works out to $17280 out of your pocket.

With the same scenario as above, if you begin to save when your child is 5, you will need to tuck away $122 each month for 13 years, which works out to $19032 out of your pocket.  If you start when your child is 10, it will cost $214 per month for 8 years, costing you $20544.  And, finally, if you wait until your child is 15 to begin saving, you would need to come up with $676 monthly for 3 years, which works out to $24336.  So, as you can see, the later you start saving, the more burdensome it will be and the more money will need to come out of your own pocket.

In a previous post I wrote about the importance of indexing your investment contributions to inflation, meaning that it’s a good idea to increase your contributions by at least 3% each year.  The numbers below show the savings you could enjoy if you were to do so.

START AGE                       FIXED                  WITH 3% INCREASE/YR

0                                             $80                           $64

5                                             $122                         $103

10                                           $214                         $193

15                                           $676                         $656

The time to start saving for your children’s education is now.  The sooner you begin, the easier and more manageable it will be to help your children to get a good start at a promising future.  For more information on RESPs, check out this link.