News

The Future of Financial Education

In May 2011, the Financial Consumer Agency of Canada (FCAC) and the Organisation for Economic Co-operation and Development (OECD) held a conference on financial literacy in Toronto, Canada. The conference drew some 400 experts and practitioners from around the world. The major themes for the conference were;

• national financial literacy strategies and surveys on financial literacy
• steps to address financial literacy gaps in credit and debt management, retirement planning and technological innovation
• evaluation of financial education programs
• the use of social marketing and communications in financial literacy programs
• capacity building and train-the-trainer programs
• financial education in the school system
• gender and financial education
• financial literacy and behavioural economics

The conference produced a comprehensive report. Click here to view the report.

Tips to Help Kids Understand Debt

In order for children to fully understand finances and how money "works," they have to learn about debt. The age of your child will determine how you define debt so they can understand.

Make sure you use terms and examples that they are already familiar with.

You can begin with the concept of borrowing something such as a toy from a friend. Explain the need to return the toy to its owner. And if the toy can’t be returned in its original condition then it needs to be replaced by a similar item of equal value. Your child should be able to understand that until that item is replaced, paid for, he is in debt to the person who owned the item.

For the "tween" set you can use real money items and examples. Set up a scenario where your child wants something, a new bicycle, for instance. Write down and discuss the amount of money the bike costs, the amount of money your child has, the amount of money he earns through allowance, or anticipates receiving for a gift, etc.

Talk about whether or not he can "afford" the bike right now, and if he can pay it off within a reasonable amount of time. This discussion will include installment payments where instead of paying back the "loan" with all of their allowance each week, they pay smaller amounts so as to keep some money for their usual "living expenses." It’s important to work financial terms into the conversation as soon as you child is able to understand them.

Then, actually carry out a transaction. Keep it written down; sign a contract, have them make payments and even set up an amortization schedule so they can see how interest works. Going through this process will give your child an excellent opportunity to learn about personal finances.

Decode Holiday Credit Card Debt

Brian Denysuik, owner of CreditAid, appeared on CTV Morning to discuss holiday credit card Debt. Watch the video at http://winnipeg.ctv.ca/morning/ and click on the link labelled "Decode Holiday Credit Card Debt".

Consumer Obsession Leads Us to Over-spending

The desire to "keep up with the Jones's" has become more than a social status issue for many people. Also, it is very easy to get caught up in this during the holiday season. It has become a catalyst for overspending that has consumers running to banks and other lenders looking for ways to finance their purchases. This issue also has countless consumers loaded up with credit card debt so steep it may take them a lifetime to get out of it.

Give your financial literacy a good double-check, and if you are not already practicing the following financial practices, now is a great time to start today:

• Pay bills on time and balance your check book each month. You can't know how much you can afford to spend if you don't know how much you currently have to spend.
• Stop buying on impulse. If you want something, rather than charging it on your credit card and paying interest, save for the next few month and buy it when you have the money.
• Always pay more than your minimum balance on credit cards: Get rid of them as soon as possible. You will save money on interest and have more to save for the future.
• Vow to maintain only "good" debt. This is the type of debt that will increase your net worth: A mortgage on an affordable home, a car loan, or college debt. These will either increase your creditworthiness or make you more employable so you are able to earn more and keep debt to a minimum.
• Always include some savings in your budget. Many short-sighted people are unable to see their needs after retirement and don't save. This results in financial difficulty during their declining years.
• Find out what you don't know about finances -- and learn it. Despite the flood of information on financial management, people don't take the time to learn.

Finally, in order to put a stop to this financial madness keep in mind the media pull for spending and don't be drawn into the hype. By being savvy shoppers and savers, the overspending and debt can stop.

Inspired to be Debt Free

Brian Denysuik, owner of CreditAid, does budget work with Habitat for Humanity to help prepare applicants for potential home ownership. Brian recently met with a young lady, who had already developed some very good budgeting habits.

When discussing the importance of budgeting, she quickly pointed out how she was never taught this very important life skill. She proceeded to say the she was inspired by Gail Vaz-Oxlade, author of the best-selling Debt-Free Forever and host of the popular TV show Til Debt Do Us Part. Gail Vaz-Oxlade is having a lot of impact on people and will be in Winnipeg, on February 9, 2012 at Canad Inns Polo Park. Creditaid is very excited to be one of the sponsors of this event. Stay tuned for more information.

Christmas Shopping on a Budget

With Christmas just a few weeks away, we have abruptly entered the "shopping season' that special time when you look at all the people on your Christmas list and compare them to the amount of money you have available. It's time to create a budget and stick to it. The following ideas will help:

Comparison shop: Check prices at different stores, and don't forget the online stores. Many online stores have great prices, but be sure to figure in any shipping costs in the total price of your gifts.

Making a list, checking it twice: Christmas shop in the same way that you grocery shop: create a list and stick to it. If you shop without a list it's too easy to get caught up in the hype and you'll buy items you hadn't planned for compromising your budget. Download our handy holiday gift budget planner to help you get organized.

Plan a "homemade" Christmas: instead of buying the fancy cookies this year, buy the ingredients and make your own. Homemade goodies generally taste better and are less expensive than store-bought varieties. But, don't stop with just baking. There are hundreds of things that you can make to give as gifts that won't break your budget.

Time: Elderly persons would love to receive a gift card stating you will clean their house for them once a month (or once a week), while a young couple with children would consider free baby-sitting services for an evening (or weekend!) away, to be an extra special treat.

Bartering: Basically, you offer a product or service to someone who offers a product or service that a person on your gift list would enjoy. For example, your mother gets her hair done on a weekly basis. You could barter a certain number of up-do's for a couple oil-changes.

Courtesy of CREDITAID 301-2200 Mc Phillips St. Winnipeg, Manitoba. R2V 3P4