Savvy Family Tip #5: Take a Tip from Your Grandma

Today’s Savvy Family tip reminds us that simpler is often better…

Tip # 5 – The modern version of your Great-Grandmother’s strategy.

When your great-grandfather arrived home on Friday evening his pocket contained the family pay packet. The weekly ritual in most successful households was the division of the money to pay for the family needs, rent, groceries, heat, light, telephone. Money was also tucked away for larger purchases, shoes, clothing.

Mason jars and envelopes were the management tools of the day.
When the grocery jar was empty there were no more groceries purchased until after payday. If there wasn’t enough money in the clothing envelope you had to wait, sometimes for a few weeks. If only they had sites like like we do to help them make ends meet.

Our great-grandparents managed real scarcity.

In comparison almost all of us have two pieces of plastic, one that gives us access to every dollar we have, the other allows us to arrange a loan to purchase just about anything from a cup of coffee to a vacation. This situation creates its own problems. It is too easy to spend what we don’t have for items that we really may not need.

We need to create artificial scarcity to assist us to manage our spending.

The envelope method is often suggested as a tool to help us spend less. The challenge is that we’re not used to or comfortable walking around with cash. It seems too 20th century.

An alternative method is the account specific debit card. One family member fills the cars with fuel and goes grocery shopping every Sunday. Sunday evening they transfer a set amount of money from their general account to their debit card accounts. This is their “allowance” for the week. When the debit account is empty, spending stops until next Sunday.

What tools do you use to manage your spending?

Dan Olson is a Sun Life Financial Advisor. An experienced Dad with three children, now young adults. With everyone under one roof for the Summer, his home is feeling really, really small.
If you have some questions for Dan, or would like some help with your family’s savings, here’s how you can contact him:
604 308 9502

Image source: Lily Shop

October posts sponsored by Cutie Pie Boutique

Family Saving: RESPs

With back to school just around the corner, it’s a fitting time to discuss saving for college & university. There are a variety of ways to save for your child’s education, but RESPs remain the most common option. Alongside having a personal saving account to save for yourself or your child to go to college, it can help to fund you throughout your/your child’s college education. Understanding Atlantic Union Bank and other banks’ information about a savings account is vital to you making the right decision in how you can save and having good interest rates as well. This article however is about RESPs and to help you understand this popular savings method, I spoke with Kevin Parton, a Certified Financial Planner with Investor’s Group.


Contributed by Kevin Parton, Investor’s Group

An RESP is simply an education savings account that is registered with the
Government of Canada. It allows for you, your family, and your friends to save
for your child’s future education.
When you open your RESP, you become entitled to two Government of Canada
programs: the Canada Education Savings Grant and the Canada Learning Bond (if
you qualify). Also, all of your savings grow tax-deferred, so there are no tax
implications while you are taking advantage of the Government incentives.


– Your savings grow tax-deferred
– If your child doesn’t pursue a post-secondary education, you may have the
option to roll-over your RESP into your RRSPs
– Opening an RESP makes you eligible to collect the Canada Learning Bond (if you
qualify) and the Canada Education Savings Grant
– You may also be eligible for the Alberta Centennial Education Savings Grant
(ACES) or the Quebec Education Savings Incentive (QESI), depending on where you
– There are many different types of RESPs that are available for your family –
speak with an RESP Specialist to help you to determine which plan is of the
most value for your family

Investing outside of an RESP in a Non Registered account
means that you won’t get any grants/government money AND you will pay taxes on
the growth every year. This dramatically limits the long term compounding
Investing outside of an RESP in a TFSA means you won’t get
any grants/government money. You avoid paying tax in the previous scenario
however you don’t get the free government money or the growth you would get on
those additional funds.


When you are ready to withdraw from your RESP savings, how you take out the money (referred to as Educational Assistance Payments or EAPs) can make a difference. EAPs consist of the Canada Education Savings Grant (CESG), the Canadian Learning Bond (CLB), and the income/ growth earned from the funds you have invested in the RESP. Here is an exert from Off to College- Get the Most from that RESP published by Investor’s Group:
Withdraw EAPs before withdrawing
As the subscriber of your student’s plan, you can
elect to withdraw the income, grant, and bonds as EAPs, which will be taxable
in the hands of your student whose low income, and personal credits and deductions
(including the tuition credit, education credit, moving expenses deduction, and
so on) should offset some or all of the income inclusion of the EAP.
Withdraw contributions after your student starts school. Early withdrawal will trigger a CESG repayment.
Spread out the EAPs over the length
of your student’s educational program.
Taking a lump sum in the first year may
burden your student with a high taxable income. Spreading out the EAPs over a
number of years takes advantage of your student’s (usually) lower marginal tax
Avoid potential CESG clawbacks by
withdrawing EAPs when you can.
If there is any CESG or CLB remaining
in your investments held within a RESP after your student completes (or leaves)
their post-secondary program, you may be required to refund this “excess” CESG
grant money.
Get proof of enrolment right away so
you’ll have money when you need it.
Before releasing an EAP, your RESP
carrier will require proof of enrollment.
Use leftovers wisely. Any contributions remaining in the plan after your student finishes
college or university are yours to use as you wish – transfer them to another
child’s plan or withdraw them for personal use.

Speaking with a Financial Planner or Advisor can help you determine the best ways to withdraw the funds from your RESPs. Dealing with finances can be difficult, so it’s important that families seek help whenever they’re struggling. It’s always better to seek professional advice. Many financial advisors and planners now use appointment setting services (learn more here) that help them to ensure clients can book in for one-on-one appointments to manage their finances. Financial planners would be happy to help families that need help with their savings, or any other financial problems, so make sure to contact your local advisors for some support.
A big thank you to Kevin Parton for contributing this post to TPB.

About Kevin: Kevin Parton is a Certified Financial Planner with Investor’s Group & one of our financial contributors.
You can reach Kevin at 604 805- 4642 or via email at
For more great financial info, check out TPB’s $avvy Family page.

Image Sources:
My University Money
RESP Chart courtesy of Kevin Parton
Great Info About RESP

August posts sponsored by Cutie Pie Boutique

$avvy Family Tip #2

In our second instalment of TPB’s $avvy Family Tips, our contributor, Dan Olson from Sunlife Financial challenges your family to put the plastic away. What do you think of this idea?

Tip # 2: What’s Your Weekly Allowance?
Remember when you received your weekly allowance? The plans
you’d make on what to spend it on, the joy of having coins in your pocket, and
the disappointment when you couldn’t do something because your wallet was empty?
You had limited resources and a built- in spending limit.
Technology has stripped us of these basic money management tools, credit and
debit cards don’t display balances and are rarely “empty”.
How much do you allow yourself for the little things?  For a month put that amount in your wallet
each Sunday in cash. Will you spend less this way?
Dan Olson is a Sun Life Financial Advisor. An experienced Dad with three children, now young adults. With everyone under one roof for the Summer, his home is feeling really, really small.
If you have some questions for Dan, or would like some help with your family’s savings, here’s how you can contact him: 
604 308 9502

Dollars & Cents: Financial Planning for Families

Learning how to manage finances can be an intimidating endeavour, even to the most savvy of us. That’s why you can easily get someone else to sort out your financial analysis if you would rather do it that way, particularly if you need it for your business as they can make your workload just a bit easier. Depending on how you were taught & learned to manage money can have a huge impact on how you handle your finances as an adult, how you do your taxes will also depend on what line of work you find yourself in, for example, someone that is self-employed might have more tax laws to abide by, looking into financial services from companies such as Dave Burton can allow the less-experienced financial businessmen and women to keep their finances and taxes in check. Suddenly turning that piggy bank upside down and shaking the heck out of it doesn’t count as a financial plan. We’re grown ups now people, and that means addressing money as an adult. Oi, when did that happen?!
Learning how to budget & be disciplined with money may not sound exciting, but it can pay off big time in the long run. Regardless of what your priorities are for how & where you spend your money, having a plan to help you reach your goals is a great place to start. Do you want to have a vacation each year? Pay for your kids to go to college/ university? Have a retirement income? Some, or all of the above? Unfortunately that money isn’t going to grow on trees (as much as we wish it did!), so to help sort through all the financial jargon & info, I spoke to Kevin Parton, a Financial Advisor with Investor’s Group, about some of the common questions & concerns young families have about saving.
Since it isn’t getting cheaper to send your kids to post- secondary & saving once you have kids may seem more challenging, my questions focused on RESPs and how young families can learn to save & manage their finances. Read on to see the advice Kevin had to offer.

What info do
you need to set up a bank account for a child? An RESP?

When opening an account for a child there are a few
options. You can open an RESP
(registered education savings plan) which is primarily for funding post
secondary education. This account requires a Social Insurance Number for your
child and your own personal information as the account will be registered to
you with your child as the beneficiary/one who receives the money.
If you would prefer to save money for your child
outside of a registered education savings plan you may set up a non-registered investment account for your child. This money can be deposited
and redeemed at any time for any purpose; however any investment income earned
on your deposits is fully taxable.
With that in mind another option is to open a TFSA
(Tax Free Savings Account). You have the same flexibility as the non-registered
account, however you will now avoid the tax on any investment income earned. A
Tax Free Savings Account only becomes available to an individual once they have
reached the age of 18, so you will have to open one up in your name and use it
as a savings vehicle for your child.
For any of the following accounts to be set up you
will need a SIN, Drivers License or other photo identification, name, birth
date and address.
The account
that is right for your situation is best explored with the help of a financial
planner. Ask your friends, family members and colleagues if you can speak to
their financial planner. Interview a couple of them to make sure they are the
right fit.
What are the
benefits of setting up an RRSP? (tax related and otherwise)

There are a few benefits to setting up an RRSP. The
first benefit of setting up an RRSP lies in the fact that you are saving for
retirement. We are moving further into an age where employers and the
government are not going to be providing us with the same pension support our
parents are/were familiar with. This means that it is OUR responsibility to
find out what our retirement should look like and then determine how much we
need to save during our working lives to make it happen.
The second benefit of setting up an RRSP is the tax
deduction. I will use this example to explain the benefit of tax deductions:
Joe Client earned $60,000 before taxes in 2013. On
that $60,000 Joe Client would have paid $11,603 in taxes throughout the year
leaving him with $48,397 in his pocket. However for every dollar Joe Client
puts into his RRSP for the 2013 year he reduces his taxable earnings of $60,000
by one dollar. In 2013 Joe Client invested a total of $5,000 into his RRSP
making his taxable earnings $55,000 ($60,000 earnings – $5,000 RRSP
contribution). Joe Client has already paid taxes throughout the year on $60,000
so when he files his taxes he will get back the taxes he paid on the income her
earned between $55,000 and $60,000 which is $1,485. The more income you earn,
the more taxes you pay and the larger refund you will get by using your RRSP.
The third benefit of setting up an RRSP is the tax
sheltered growth. Much like the Tax Free Savings Account, once the money is
inside the RRSP it can grow and grow and grow without you having to pay any
taxes on the investment income. Over a period of 30-40 years this will save you
potentially tens of thousands in taxes leaving you with more money for your
And lastly, RRSP’s can be used for purposes other
than retirement. You are able to pull money from your RRSP tax free if you are
purchasing your first home or going back to school. These exceptions are called
First Time Homebuyers Plan and Life Long Learning Plan.
Please speak with a financial planner about your
situation and determine how best to use an RRSP so it is right for your
personal situation.
What advice do
you have for young families looking to save money?

” The best time to plant a tree is ten years ago,
the second best time to plant a tree is today.” I deal with young families all
the time and often times they have the attitude that if they can’t save enough
to cover all of their goals then there is no point in starting. Let me tell you
that the worst thing you can do is postpone your savings because you think a
little bit isn’t enough.
Create a budget so you can see what your household
income is and what all of your expenses are. Leave a little room for variables (because there are always variables) and then decide on an amount to save. It can
be as little as $25/month but something is always better than nothing.
In addition to that strategy you will want to have
a plan. You may have enough money to save monthly but if you don’t have a
specific goal and purpose for that money then it is as good as spent on the
next spontaneous purchase. Think hard about what you want your life to look
like financially, work with a financial planner to figure out what it will take
for you to achieve that life and then commit to working towards those goals.
You must practice good money habits before you have
money in order to become successful. Do not wait until you have money to start
trying to save. I promise you that day will never come.
What are the
most common concerns for young families?

The most common concerns I find among young
families are: What happens if I or my spouse die? Who takes care of our child?
How to we prepare for the worst case scenario?
These are never fun
conversations but they are necessary conversations. Making sure your family
will be financially secure in case of a premature death, disability, or serious
illness is of utmost importance. Also understanding what happens to your family
if and when you are gone is important.
Beyond the emergency planning it is often constant
planning towards real estate ownership, saving for their children’s education,
saving for their retirement, and making sure they are taking time to enjoy
What mistakes
do people make when it comes to saving?

The biggest mistake people make when it comes to
saving is trying to do it themselves and/or not taking the time to find a
qualified financial planner to work with. Do-it-yourself financial planning is
a bad idea for the very same reason using Google as your personal physician is
a bad idea. You can of course utilise tools like Stocktrades to make better investment decisions, however, you should only do so if you have the perquisite knowledge. If you don’t, and that’s OK, then a financial planner would offer a better ROI.
Your life is busy with work, children, family,
life, etc… find yourself a professional that you know, like, and trust. Work
with them to tell them what you want to accomplish and let them put a plan
together for you. This plan should be specific to your situation and you should
review it as often as you would like but at least every year. A financial planner can also help you avoid the common pitfall of a bad credit score. However, if you find yourself stuck on this slipperty slope then don’t worry. Companies like might be able to help you before things get out of hand.

other useful info/ resources you can suggest?

In my experience these are the
things I have learned about young families.
1. Life is hectic
2. Sleep is scarce
3. Money is tight
4. Most of your
attention is on the child/children
You are the parents, so work hard,
stay focused, and take care of your family. Find a reliable source of financial
help and information and work together to take your life in the direction you
Often times you won’t be able to
accomplish as much as you would like in one year but I promise you will be
amazed at what you can accomplish in ten years.
Kevin Parton is a consultant with Investor’s Group & works at their Greater Vancouver South location. If you have any questions or are seeking financial advice, you can contact him via email at or by phone at (604) 541- 9334 (Ext. 484).
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