BC’s New PTT (Property Transfer Tax)

The new rules on BC’s Property Transfer Tax have been released with the potential to save up to $13,000 for some, and rate increases for others. The goal of the province’s 2016 budget to help put home ownership within the reach of more people, but you can weigh in – does BC’s New PTT achieve its stated goals?

Highlights

  • Exemption for buyers of new homes that priced at up to $750,000;
  • PTT increase to 3% from 2% for properties valued at more than $2 million;
  • Requirement that property buyers self-report their nationality when they register their property.

Let’s go back and recognize the PTT as a major source of BC’s revenue, Vancouver accounting for nearly one-quarter of the government’s $1.15-billion windfall from B.C.’s property transfer tax in the past fiscal year.

The property transfer tax was introduced in 1987 as a “luxury tax,” however thresholds have not changed since then, meaning it has turned into a revenue generator for the province.

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How to get the biggest bang for your buck from your RESP

Eric Hadley and Alex Taman opened an RESP account for their 9-month-old daughter, Molly, in 2010. Contributing as soon as possible can reap significant financial rewards down the road.

Eric Hadley and Alex Taman opened an RESP account for their 9-month-old daughter, Molly, in 2010. Contributing as soon as possible can reap significant financial rewards down the road.

It seems like everywhere you look these days, there’s a back-to-school sale. Frankly, I’m somewhat skeptical as to whether returning students actually need a new home-theatre system to succeed, but electronics retailer Best Buy, in an online ad, claims that “Studies show great sound improves GPA.”

What could help even more, in my opinion, is a well-funded education savings plan, ideally, in the form of a Registered Education Savings Plan. While RESPs have been around for many years, and really took off in 1998 with the introduction of the matching 20% Canada Education Savings Grants (CESGs), my experience is that parents are not using them in the most strategic or optimal manner possible.

Reblogged from The Financial Post | Jamie Golombeck

Here’s a quick overview of the basic rules and then we’ll run through a couple of optimization strategies.

The RESP is a tax-deferred savings plan that helps an individual, typically a parent, save for a child’s post-secondary education. Similar to other registered plans, the RESP is in essence a wrapper in which you can hold various eligible investment products, such as GICs, mutual funds and even individual stocks and bonds. Unlike RRSPs, contributions to an RESP are not tax-deductible nor are they taxable when withdrawn.

 The main benefit of the RESP is the ability to have all earnings (capital gains, dividends and interest) on the investments inside the RESP accumulate tax-free until withdrawn. When the funds are paid out, they are included in the student’s income but presumably the child will be in a low- or zero-tax bracket, on account of the various tax credits available to them (including, most commonly, the basic personal amount and tuition, education and textbook amounts) that little, if any, tax will ever be paid on the earnings when withdrawn.

The other benefit is the CESG, equal to 20% of the annual contributions, to a maximum of $500 (or $1,000 if there is unused grant room from previous years). The maximum CESG entitlement is capped at $7,200 per child.

When funding an RESP, the first missed opportunity is that parents often only start thinking about contributing to their kids’ RESPs several years after their children are born. But contributing to an RESP as soon as possible can reap significant financial rewards down the road.

For example, take Alan, who starts saving for his daughter Amy’s education the year she is born. If he contributes the $2,500 maximum amount needed each year to maximize the CESGs until he hits $36,000 of contributions in the year Amy turns 14, he will have accumulated nearly $61,000 in Amy’s RESP by the time she is 18, assuming a 3% rate of return.

Contrast this with Zoe, who only starts saving for her son Zack’s education when he turns 10 by contributing $1,000 in that year and then $5,000 each year from age 11 to 17 to catch up on all prior years’ CESGs. By the time Zack is 18, assuming the same 3% rate of return, Zack’s RESP would only be worth $49,000, despite Zoe having contributed the same $36,000 that Alan contributed.

Finally, for those parents who can afford to do so, consider maximizing the tax-deferred (or, most probably, tax-free) compounding by contributing beyond the annual amounts needed to maximize the CESGs. This can be done by making an additional lump sum contribution of $14,000, bringing the total amount contributed up to the lifetime maximum of $50,000 per child.

Jamie.Golombek@cibc.com

Jamie Golombek, CA, CPA, CFP, CLU, TEP is the Managing Director, Tax & Estate Planning with CIBC Private Wealth Management in Toronto.

Read the Original Article here

Questions for Property Transfer Tax (BC)

20140219-224133.jpgIf you are like me, then you probably have tons of questions about Property Transfer Tax. Do I have to pay it? What happens when I sell my house? What if I want to give my house to my children? Are there any rebates, discounts or first-time homebuyer benefits?  I’ve come across a nice article from David Simon – which is quite helpful in some of the odd particulars of Property Transfer Tax, like adding someone’s name to title – does that constitute a sale subject to property transfer tax? I’m by no means an expert nor a lawyer – should you consult your own lawyer if you have a particular situation or question? Yes. If you want to shoot me over a quick question, or get some recommendations on who you should really be speaking to, please hit up the comment section below or on my contact form.

For all you lucky Albertan’s, you’ve probably never encountered nor will you ever hear about this strange thing we call property transfer tax.

“I am often asked how a person can add someone to a title without paying property transfer tax. Usually that person contributed to the acquisition and has been helping paying the mortgage. Unless the person is a “related individual” as defined in the Property Transfer Tax Act and the transferor or the transferee has been living there as his/her principal residence for at least 6 months, then property transfer tax has to be paid. A related individual under the Act is a direct relative, e.g. son, daughter, parent grandparent. Siblings and aunts and uncles do not fall within the definition and the transfer tax has to be paid for transfers to them.

 I have been asked if a company can transfer its property free of property transfer tax to its shareholders. The answer is no as the company is a separate legal entity from its shareholders. Only if the company was holding the property in trust and the trust declaration was registered when the transfer to the company was registered, can the transfer be done free of property transfer tax.

 From an income tax point of view, the law is that on any disposition, or deemed disposition, of capital property, tax is payable on any capital gains. The main exception to this is for dispositions of a primary residence. There is no tax payable on the capital gains from a disposition of a primary residence.  A deemed disposition occurs when a person dies, there is a gift of property or there is a change of use of the property, e g. it goes from being your primary residence to a rental property, or from a rental property to being your primary residence. The gain has to be determined at that time and any applicable tax paid. So before anyone takes title to, or transfers title to, all or part of a primary residence or any other property, even if a family member is involved, they should consult with their tax advisor as to possible tax consequences. Once you do something it is difficult and potentially costly to undo it.”

CMHC Fees Increasing May 1st

2011_mastheadPrintEnFollowing the February 28th announcement by CMHC – Mortgage Loan Insurance premiums will be increasing as of May 1st.  Insuance premiums will affect all owners buying or refinancing who required insured financing. This includes owners of rental properties. Existing insured mortgages are not affected. CMHC estimates the average Canadian homebuyer requiring insured financing will see an increase of approximately $5 to their monthly mortgage payment.  Feel free to ask us more by leaving a comment at the bottom of the page, and read below for the official bulletin!

CMHC to Increase Mortgage Insurance Premiums

OTTAWA, February 28, 2014 — Following the annual review of its insurance products and capital requirements, CMHC will increase its mortgage loan insurance premiums for homeowner and 1 – 4 unit rental properties effective May 1, 2014.

The increase applies to mortgage loan insurance premiums for owner occupied, self-employed and 1-to-4 unit rental properties, including low-ratio refinance premiums. This does not apply to mortgages currently insured by CMHC.

CMHC’s capital management framework is consistent with international practices and Canadian guidelines for mortgage insurers. Increased capital targets are consistent with Canadian and international industry trends and makes the financial system more stable and resilient.

“The higher premiums reflect CMHC’s higher capital targets” said Steven Mennill, CMHC’s Vice-President, Insurance Operations. “CMHC’s capital holdings reduce Canadian taxpayers’ exposure to the housing market and contribute to the long term stability of the financial system.”

For the average Canadian homebuyer requiring CMHC insured financing, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment. This is not expected to have a material impact on the housing market.

Effective May 1st, CMHC Purchase (owner occupied 1 – 4 unit) mortgage insurance premiums will increase by approximately 15%, on average, for all loan-to-value ranges.

Loan-to-Value Ratio Standard Premium (Current) Standard Premium (Effective May 1st, 2014)
Up to and including 65% 0.50% 0.60%
Up to and including 75% 0.65% 0.75%
Up to and including 80% 1.00% 1.25%
Up to and including 85% 1.75% 1.80%
Up to and including 90% 2.00% 2.40%
Up to and including 95% 2.75% 3.15%
90.01% to 95% – Non-Traditional Down Payment 2.90% 3.35%

CMHC reviews its premiums on an annual basis and, going forward, plans to announce decisions on premiums in the first quarter of each year. The homeowner premium increase follows changes CMHC made to its portfolio insurance product earlier this year.

As Canada’s national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable housing solutions that will continue to create vibrant and healthy communities and cities across the country.

For additional highlights please see attached backgrounder and key fact sheet.

Information on this release:

Charles Sauriol, Media Relations
613-748-2799
csauriol@cmhc-schl.gc.ca

Follow CMHC on Twitter @CMHC_ca

Backgrounder

  • Mortgage loan insurance helps protect lenders against mortgage default and enables consumers to purchase homes with a minimum down payment of 5% with interest rates comparable to those with a 20% down payment. Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price.
  • CMHC mortgage loan insurance premium is calculated as a percentage of the loan based on the loan-to-value ratio. The premium can be paid in a single lump sum but more frequently is added to the mortgage principal and amortized over the life of the mortgage as part of regular mortgage payments.
  • CMHC reviews its premiums on an annual basis and has adjusted them several times since being commercialized in 1998. Adjustments have included both increases and decreases to the premiums.
  • CMHC’s new premium rates will be effective for new mortgage loan insurance requests submitted on or after May 1, 2014. The current mortgage loan insurance premiums will apply for applications submitted to CMHC prior to May 1, 2014, regardless of the closing date. As is normal practice, complete borrower and property details must be submitted to CMHC when requesting mortgage loan insurance.
  • The increase applies to mortgage loan insurance premiums for residential housing of 1-to-4 units. This includes owner occupied, self-employed and 1-to-4 unit rental properties, including low-ratio refinance premiums.
  • In 2013, the average CMHC insured loan at 95% loan-to-value was $248,000. Using these figures, the higher premium will result in an increase of approximately $5 to the monthly mortgage payment for the average Canadian homebuyer. This is not expected to have a material impact on the housing market.
95% Loan-to-Value
Loan Amount $150,000 $250,000 $350,000 $450,000
Current Premium $4,125 $6,875 $9,625 $12,375
New Premium $4,725 $7,875 $11,025 $14,175
Additional Premium $600 $1,000 $1,400 $1,800
Increase to Monthly Mortgage Payment $3.00 $4.98 $6.99 $8.98

Based on a 5 year term @ 3.49% and a 25 year amortization

*Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax — the sales tax cannot be added to the loan amount.

85% Loan-to-Value
Loan Amount $150,000 $250,000 $350,000 $450,000
Current Premium $2,625 $4,375 $6,125 $7,875
New Premium $2,700 $4,500 $6,300 $8,100
Additional Premium $75 $125 $175 $225
Increase to Monthly Mortgage Payment $0.37 $0.62 $0.87 $1.12

Based on a 5 year term @ 3.49% and a 25 year amortization

*Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax — the sales tax cannot be added to the loan amount.

For more information visit http://www.cmhc.ca/en/hoficlincl/moloin/moloin_013.cfm

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Mortgage Rate wars may be coming our way

Mr. Oliver told reporters Thursday in Ottawa. “I listened to [BMO’s] explanation, his reasons. I reiterated what I’ve just stated — the government is gradually reducing its involvement in the mortgage market.”

bank_mortgage_rates_20140327

Reblogged from The Financial Post

TORONTO • Why did Bank of Montreal risk a (verbal) slap from Finance Minister Joe Oliver for daring to chop its five-year mortgage rate below 3%?

Because they knew the mortgage war is going to be different this time.

On previous occasions when the banks publicized rates below the government’s favoured minimum, they found themselves on the receiving end of angry calls from Mr. Oliver’s predecessor, Jim Flaherty, who resigned on March 18.

Mr. Oliver seems in no mood to quarrel with Bay Street and ready to largely leave the mortgage market to its own devices.

“There’s a market and the bank made its decision, and the chief executive officer of the Bank of Montreal informed me about it,” Mr. Oliver told reporters Thursday in Ottawa. “I listened to his explanation, his reasons. I reiterated what I’ve just stated — the government is gradually reducing its involvement in the mortgage market.”

Asked if the government would take further steps if a housing bubble formed, Mr. Oliver said: “I don’t have to get into a hypothetical negative.”

It’s a big change from Mr. Flaherty who didn’t jump on the banks every time they cut rates to new lows but certainly always let them know he was a coiled spring. He also didn’t mind opining on the “hypothetical negative” of what he viewed as overpriced housing in Toronto and Vancouver.

And, without Finance calling out the banks, there is a dearth of negative voices around this high-profile plunge below 3%.
Home loans are simply products that people buy, and when demand is strong the companies that produce those products — the banks — can charge higher prices, said Peter Routledge, an analyst at National Bank Financial. When demand falls off, prices move in the opposite direction.

“What [the rate cut] tells me is that household credit growth is slowing and BMO has reacted to slowing demand in the way one would expect,” Mr. Routledge said. “It’s textbook economics.”

In fact, other lenders are already providing even lower offers for five-year mortgages, though they’re mostly going about it more quietly.

Read 489 more words

Bang for your $599,000 buck

There’s a house for sale in Vancouver for under $600,000

Reblogged from The Province

In a city where affordable housing is an oxymoron, a two-storey East Vancouver character home is bound to catch some attention with its price tag.

The 1,951-square-foot home at 2622 Clark Dr. is set to go on the market Monday with a listed price of $599,000 — expected to be the lowest-priced, detached, freehold house in Vancouver.

“I expect it to be noticed,” said listing agent Mary Cleaver. “It’s a beautiful renovated Craftsman-style house in a lovely neighbourhood at a great price.”

The low price is because the three-bedroom, two-bath Grandview-Woodland property faces busy Clark Drive and is on a small 30.5-X-58-foot lot, about half the depth of typical lots in the neighbourhood.

Contrary to what some people might expect from the — relatively — bargain-basement price, the house is well-kept and lovingly maintained.

Built in 1911, its plumbing, electrical and windows were updated before the current owners bought the place in 2005 for $333,000. They have since replaced the roof, refinished the floors, installed a new kitchen and repainted the exterior, said Cleaver.

Homeowner Simon Yu, who owns a deck-renovation company, also added a wraparound deck to the home, adding an extra 600 sq. ft to the property.

The low price is rare in the city, said Cleaver, although it isn’t the only one. In January, a house in the Fraserview-Killarney neighbourhood sold for $592,000. A house off of Commercial Drive sold for $471,000 in April 2012.

Currently, the cheapest freehold, detached house listed in Vancouver is $628,000 in Hastings-Sunrise.

The Clark Drive house may be a deal in comparison with million-dollar fixer-uppers that have become the norm in the city, but statistics show Vancouver’s housing market still remains out of reach for average wage earners. An RBC report last year shows detached homes in Metro Vancouver require more than 80 per cent of median household income. A recent international survey also placed Vancouver second after Hong Kong in having the least-affordable housing.

And there are no signs Vancouver’s sky-high market is heading for a downturn. The region’s housing market is maintaining its steady pace from last year, said the Real Estate Board of Greater Vancouver, with residential sales in February jumping 40 per cent compared with February 2013.

Cleaver said the homeowners, who have two young children, were very happy in the house, but are selling it because they need more space. She’s holding an open house April 5 and 6 from 2 to 4 p.m.

“It’s a very nice, livable house, and (at that price), it is competing with apartments and townhouses,” she said.

What $599,000 will get you:

If you want even more bang for your buck, you have to look farther afield. Here is what $599,000 will get you in:

Langley: 20465-67B Ave.

A 3,248-square-foot, five-bedroom, four-bathroom house in Willoughby with gourmet kitchen and finished basement.

Maple Ridge: 10070-246B St.

Built in 2013, this four-bedroom home on a quiet street has a great room, vaulted ceilings in the master bedroom and a rec room.

Sechelt: 6220 Mika Rd.

There are panoramic sea views, oversized decks and 14-foot ceilings in this five-bedoom West Sechelt home on a 11,412-sq.-ft lot.

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Tax Tips – First-Time Donor’s Super Credit

“If you’re among the almost 75% of Canadians that hasn’t been giving anything to charity or at least haven’t in some time, you can take advantage of the new First-Time Donor’s Super Credit (FDSC). Under the general rules, individuals can claim a non-refundable tax credit of 15% for the first $200 of annual charitable donations. That tax credit rate jumps to 29% for any donations above $200.”

pst120510-bells5

Reblogged from Jamie Golombek

There might be more than a few of us hanging our heads as we skulk past the Salvation Army kettles, hands in our pockets and eyes averted, after a survey this week pointed out that we are donating not only fewer dollars but also a declining percentage of our income to charity than in prior years.

According to the Fraser Institute’s annual “Generosity Index” released earlier this week, a lower percentage of tax filers donated to charity in Canada (22.9%) than in the United States (26.0%). Similarly, Canadians (at 0.64%) gave a lower percentage of their aggregate income to charity than did Americans (at 1.33%).

So, if your lack of giving during this holiday season is causing you some guilty pangs, there are actually a couple of ways to make giving a bit less unsettling by using the tax rules to decrease your after-tax cost of donating.

But to encourage “new” donors to give to charity, the 2013 federal budget introduced the temporary FDSC which provides an additional 25% non-refundable tax credit for a “first-time donor” on up to $1,000 of donations. A first-time donor is someone who hasn’t claimed a donation credit after 2007. If you’re married or living common law, neither you nor your spouse qualify if either of you has made a donation after 2007. While first-time donor couples can share the FDSC in a particular year, the total amount claimed can’t exceed the maximum allowable credit.

As a result, a first-time donor will be entitled to a 40% federal credit for donations of $200 or less and a 54% credit for donations over $200 up to $1,000. Only cash donations will qualify for the FDSC as opposed to donations of property or donations “in-kind.”

The FDSC is available for donations made on or after March 21, 2013 and the credit can only be claimed once in either 2013 or any year until 2017.

Read More … 281 more words

Does your home office qualify for deductions against household bills?

If you were self-employed this past year, now is a good time to start gathering your paperwork to file your 2013 tax return. And remember some of the expenses you incur for your home may be deductible from business income if you have an office or other work space there.

tax-time

Reblogged from KPMG Enterprise

Your home office expenses may be deductible in two situations: First, if your home is your principal place of business — that is, you do not have an office elsewhere. Second, if you have an office outside your home, your home office must be used exclusively for your business, and must be used on a “regular and continuous basis” for meeting clients, customers or patients.

It’s not always clear how many meetings you need to have in your home office to meet the “regular and continuous” requirement, but it will depend on the nature of your business and your situation.

The Canada Revenue Agency provides an example of a doctor who has offices both outside and inside his home. He uses his home office to meet one or two patients a week. The CRA says this work space would not be considered used on a regular and continuous basis for meeting patients. However, a work space used to meet an average of five patients a day for five days each week clearly meets the requirements. This example clearly shows there is a large grey area in what the CRA considers to be regular and continuous.

If you have offices inside and outside your home and you want to deduct home office expenses, be prepared with enough information to support your claim that you use your home office on a regular and continuous basis for your business.

If your home office meets the requirements, the portion of your house expenses that can be claimed as business expenses will normally be based on the fraction of your home used. You can usually exclude common areas such as hallways, kitchen and washrooms when making the calculation.

For example, if your home office is a 200 square foot room (or 18.5 square metres) and the total area of living space in your house (bedrooms, living room, dining room and the office) is 2,000 square feet (186 square metres). As long as your home office qualifies, you can claim 10% of your eligible costs.

The expenses you can claim include rent, if you are a tenant, mortgage interest if you own your home (but not the principal portion of blended mortgage payments), property taxes and home insurance. You can also claim expenses for utilities such as electricity, heat, water and gas.

But there are also some less obvious expenses that can be claimed, such as garden service, driveway snowplowing and minor repairs. You will need to keep receipts on file; do not simply estimate your expenses.

You can claim capital cost allowance (CCA) on the appropriate fraction of your home, but this is often not advisable. If you do, the CRA will take the position  that fraction of your home is not part of your principal residence and it will disallow your claim for the principal residence exemption from capital gains tax for that portion of the home when you sell. Any CCA you claimed can also be “recaptured” into income when you sell your home.

Keep in mind home office expenses can only be claimed against income from your business. As such, you cannot use home office expenses to produce an overall business loss that is applied against other income. However, losses disallowed because of this rule can be carried forward and used against income generated from the same business in another year.

Of course, supplies that relate exclusively to your home office are fully deductible and not subject to these restrictions. Those expenses would normally include a separate business phone and Internet connection, printer paper, printer or photocopier toner cartridges, computer repairs (assuming your computer is used only for your business), and so on.

Since many of the requirements for deducting home office expenses depend on your individual circumstances, it’s important to carefully document your claims so you can back them up if the CRA asks you to.

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Three reasons why the Bank of Canada is not trying to drive down the loonie

“The Bank of Canada’s most recent policy meeting this month revealed a growing dovish streak, raising questions about whether the bank is actively trying to drive down the loonie.”

Stephen Poloz

Reblogged from John Shmuel

It’s a policy approach that would make sense, considering the strength of the loonie has hurt Canadian exports in the past few years. The strategy of “talking down” a currency has been used to relatively successful effect in countries such as Australia and Norway.

But Charles St-Arnaud, Canada economist for investment bank Nomura, doubts the Bank of Canada is currently attempting something similar.

“While a weaker CAD would be welcomed by the Bank of Canada… we find that using the properties from the BoC’s projection model the size of the depreciation needed to compensate the loss in competitiveness and to bring back inflation to target would require a depreciation of CAD of between 25% and 30%,” he said. “A depreciation of the currency of this magnitude would be almost impossible to attain only through monetary policy and requires significantly lower commodity prices.”

Essentially, the loonie would need to become much weaker than it currently is for Canada to see any economic benefit. Driving it down by such a large margin would be extremely difficult and, even if it could be done, would create a whole host of other problems.

Mr. St-Arnaud points out others have argued the bank could create smaller benefits for the Canadian economy without going to such great lengths, but he counters those, too. Below, he lists three main arguments he’s heard for why the Bank of Canada is actively working to lower the loonie, and why he thinks they’re wrong.

1. Because he joined from EDC, Gov Poloz wants a weaker CAD: Interestingly, since Gov. Poloz took over the helm of the Bank of Canada, none of the policy decision communiqués have made reference to the currency and the reference to the strong Canadian has disappeared from Monetary Policy Reports. Furthermore, all is comment have pointed to the need for a flexible exchange rate that is determined by the market. Ultimately, we believe that the most important comments made by Governor Poloz since taking the helm of the BoC has been during his first public appearance when he said that ’the inflation target is sacrosanct’.

2. A strong CAD is the reason for the weakness in exports: Recent publications by the BoC suggests that the weakness in exports comes mainly from ongoing competitiveness challenges over the past decade that have been exacerbated by the appreciation of CAD over the period. While it is tempting to conclude that a weaker currency would solve the problem, the BoC also showed that the appreciation was driven by fundamentals and CAD is currently around fairvalue and, hence, hard to reverse. Moreover, while a weaker CAD would push exports higher, simulations from the BoC’s projection model suggests the magnitude of the FX move needed to push growth significantly above potential and close the output gap more rapidly is also big.

3. A weaker CAD would help bring inflation to target: Recent Bank of Canada research papers have shown that the pass-through from a weaker exchange rate to inflation has diminished over the past few decades. Moreover, simulation from the BoC projection model suggest that the impact of a CAD depreciation on inflation is also weak and would require a large depreciation to bring back inflation to target.

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Money hurdles for 2014: Kids need to learn about money

‘Resolve the make your kids more financially savvy than you were’

Motivational quote for your fridge: “Teaching kids sound financial habits at an early age gives all kids the opportunity to be successful when they are an adult.” —Warren Buffett

financial-literacy

Reblogged from Melissa Leong

Pep talk: Sure, we all want our children to be happy. But let’s be honest — what we’d rather be saying is: we all want our children to be rich. Well, you can point them in the right direction. Warren Buffett says his greatest inspiration was his father who taught him about the value of saving. This is your chance to give your kids something better than money. Teach them to fish, so to speak.

Peer support: When Naomi Mesbur’s son, Ciaran, was born, she was in debt.

She had helped fund her first husband’s business and supported them when he became ill. When he died, she had $40,000 worth of debt.

“I don’t want to leave debt for my kid,” the 43-year-old Toronto legal assistant says. “I also want to teach him so that he doesn’t end up in this mess.”

She looks for teachable moments. She talks to Ciaran who is seven, about prices at the grocery store. They play Monopoly. She brings him to dollar stores for treats. “[I tell him,] ‘You can get one thing…but it can’t be more than $1.50.’ So he chooses something and looks at the prices.”

Every week, his school has pizza day. They go to his piggy bank for the money to purchase a $2 slice and a $1 drink. If he wants an extra slice, he can help around the house for more money.

Read More … 671 more words