Canadian Personal Finance Blog

As I have said, as part of my financial clean up for my severance package I must go to my bank and attempt to get them to actually help me, and possibly earn their exorbitant fees (although after reading on Nancy Zimmerman’s blog about the Citizen’s Bank, maybe I need to reconsider who I bank with).

RESPs How Do You Withdraw Money?

This question continues to confound me on the TD web site.  I know I need to do an Educational Assistance Payment from the RESP, so that I can take advantage of the CESG payments made by the government. It is simple to pay money into the RESP, but extracting money from the RESP is a much more interesting thing to do, so I must now figure out how this works, and will have to fill in a bunch of forms.

Locked In Retirement Account (LIRA)

Given I will be extracting funds from my pension, it must go into a locked in retirement account, so I must now find out about how TD Canada Trust does this kind of account. I have one with SUN Life, which is of no bloody use to me (so it will be folded into whatever I create for this side of things). Hopefully this is a self-directed type investment creature and I can take advantage of one of the Lazy Portfolios that the Canadian Capitalist has spoken of previously.

RRSP For Me

As I have said previously most of my RRSP money is in spousal RRSP’s, because I thought I was going to have a nice pension (silly me), but now I have a bunch of devices that I was collecting at work that I must now transfer over to a single RRSP in my name. 

No Fee Banking

I am paying $12.95 a month again for my banking, so I will be pointing out what the Citizen’s bank has to offer, and what PC Financial offers as well, and how I’d like to have free banking again, given all the business I will be bringing with me. Not sure if I will get it given to me this time, but we shall see, this time.

I look forward to the 4 hours I will have to spend at the bank.

Tuition Bill Arrives

So along with dealing with a possible severance package and possibly having my income terminated, the bill arrived for my daughter’s fall term at the out of town University she wishes to attend. The bill along with the purchase of her books is a little lower than we expected (the bill includes her residence costs as well). What interests me is that with this she gets a Health and Dental group insurance, which means my daughter will have health benefits, even if the rest of the family doesn’t.

The bill is not a shock but it asks an important question, do I tell my daughter that she must stay in town to save the family money? My answer is in the next paragraph, but I have had friends who have said, that is the prudent thing to do.  Don’t sign up for a large expense that may be deteremental to the family purse, if there is a chance there is no income in the future.

I have not even discussed this with my daughter, I will find a way to get her to school this year, and if things really go south, she can then benefit from O.S.A.P. or other support systems, and I am willing to “gamble” on my abilities to find a job, if it means my daughter will attend the school she wants to attend. We have the money now (in RESP’s at least for the first little while) and I feel this is a good investment.

We also found out that my daughter missed out on a scholarship by 1.2 points (she had an average of 81.3 and she needed 82.5), guess it’s not an “aces” week financially for us, but we’ll get by.

First Interview

I had my first interview today (since my severance) and it seemed to go ok. It felt good being in an interview and the interviewer (it was an internal interview at my current employer) was complimentary on my experience so that was very encouraging as well. I didn’t feel lost or out of place, so that is a start to my journey.

My Resume Does Suck

After a short primer on how to write an effective resume, I am of the opinion now that while my resume sucks it will get better very soon. Lots of good pointers on how to capture a readers attention and how to phrase things so that they sound like accomplishments and not just a chronological diary of duties. I will take a few more courses and read a few more books on this topic, because the resume is an important tool for job searching. My resume is currently far too long, but edit’ing is one of my skills.

Happy Birthday Dear

Amongst all of this it is the woman who helps me get through all of this Birthday. I am lucky to be her partner and I am thankful every day I am with her.

Told you the blog might take a few interesting turns this week

This week I had some very good feedback and discourse with my readers about the high price of post secondary education and how it pertains to Family Finances and Personal Finance. This topic was suggested by my wife and I didn’t think it would amount to much, but to me, I think it really opened my eyes to the fact that most parents want the best for their kids, and most parents want to help their kids get a post secondary education of some kind. The limiting factors in their ability or inclination to help are varied, but I did not hear from a single person who said they would not help their kids, even though they had the financial means to do so, and I think I was glad to see that.

• Student Debt starts with an introduction of the problem or the discussion point as I saw it.
• Student Debt Part 2 went further into the Pros and Cons of the parent fully paying their child’s way in a post secondary education.
• Student Debt Epilogue is the entry I like the most out of this essay, because it reflects some thought provoking and interesting comments from my readers, and for that I thank you.
• Surprisingly our friend over at Canadian Capitalist did a piece on Still Sour on Group RESPs where he continues his discussion on the topic of Group RESPs. I added my own comment to this topic, so go over and see my comments on this important area of Post Secondary Education Financing.
• Michael James did an unscientific, but effective study of the Interest Rates you can get for your Unsecured Line of Credit. Surprisingly, you are on your own on what kind of deal you can get!
• Ellen Roseman wrote about the Direct Energy home furnace “warranty” program and other horror stories from the world of energy and heating. Spine chilling stuff there.
• Larry MacDonald wrote about a Job surge in the U.S. last month, which is never a bad thing to read about.
• Free Money Finance had a great article on how much you can save throwing stuff out instead of storing it (something I am going to try to live to this year).
• My article on Found Money The Prisoner’s Dilemma was showcased in the Carnival of Financial Planning.

Next week I am thinking of looking closer at my family’s finances and maybe wondering out loud why we are spending money on some of the things we do. We’ll see.

Have a great weekend.

Is there a right way to deal with the question of whether a parent should pay for a child’s post secondary education or whether the child should be left to pay for a University Education (and left with a large debt load in student loans)?

I think that is a pedagogical question since most of the times the parents financial situation is what dictates how much parents can help their children who want to get a post secondary education. I find it rare that parents who can help their children with their post secondary education, don’t help out in some fashion or another. I do know of some children who have refused help from their parents, out of pride or other reasons, but that is a rarity as well.

Some of the comments I have received have been very interesting, and I want to thank all of my reader’s who contributed (and those who de-lurked for me as well).

• A large number of comments agreed with my opening statement that it is very rare that parents who can help, choose not to help out their children who choose to try to get a University Education, it usually comes down to whether the parent is in a position to help or not.
• Michael James commented:
  

  I plan to pay for the basic necessities for my kids initially, and am hoping that they earn enough to take over by the end. I’m not paying for any extras, though. Meal plan, residence, books, and tuition are necessities.

  I think that point of view is a healthy view point, and fair. The extras he comments on, I think are part of the “College Lifestyle”, but then again, should a parent be expected to pay for them?

• Trent commented:
  

  And I would say emphatically, if the student in question never had a job during high school, then I think you would be doing a great disservice to them by allowing them to wait until they graduate college before punching their first clock.

  Which is very much the “Christian Work Ethic” espoused by many parents and grandparents. I think I agree with that comment as well.

  As a personal aside, I worked delivering Telephone Books one summer, loading trucks another summer and had a paper route from age 13, so on those days at University when I thought, I am going to chuck this whole thing and get a “real” job, I just remembered heaving bundles of Penthouse into the back of Grumman delivery trucks in 30 Celsius heat, and it was amazing how well it motivated me.

• Nerd Money Commented:
  

  I think one possible solution in terms of funding is that you loan out any funds you’ve set aside for their education. Set it up like a government funded loan where there’s no interest while they’re in school and then a modest interest rate payable to “The Bank of Mom and Dad” six months after graduation.

  Interesting concept, that I don’t know if I agree, but it is another way to teach the value of the money spent on the education (remember the infamous Singing Horse parable for possible pay back solutions).

• Steward’s of Wealth had another perspective:
  

  We don’t have kids. But one thing that we will teach them is how money works. One of our goals is to teach them how to invest. Hopefully, by the time they get to college, they’ll already have assets paying for tuition.

  Didn’t really say if they were going to help or not, and unless my kids find a penny stock to invest their funds, it’s less likely they’ll be able to pay off their tuition, but a worthwhile learning experience, although what happens if they invest badly (like I would have)?

• Nancy (aka Money Coach)’s comments really hit home for me:
  

  I was driven, got the A’s but it wasn’t nearly the experience it could have been if I had been funded. Then I graduated with a debt that took 10 long years to pay off, and significantly hampered my ability to get ahead (and most readers know the effect of compound interest = opportunity cost for me).

  I read that and understand more what the costs of Student Loans can do to newly graduated students.

• Amy (my de-lurker) comments were again very good:
  

  I graduated with a BA in 2003 with very little debt. I worked like crazy every summer (maybe taking 2-3 days for a camping excursion with friends every summer but that was it). I also worked most Saturdays during the school year. Seeing as I attended a Christian university here in Ontario, my earnings didn’t stretch as far as I would have liked, so I applied for DadSAP:) My parents were in a position to help me out, and I’m very grateful for that. I gave all I could towards my education and my parents paid the rest.

  DadSAP == The Bank of Mom and Dad, but it’s the same idea. Any child who works hard and realizes that as the oldest they need to help their parents because their brothers and sisters will want help too, is ok by me!

• Another interesting comment I got from an acquaintance who has many kids (more than 7 I believe) who told her kids, “You are going to University, Your Parents aren’t going to be able to Help, but You are going”. I think if kids are aware of the ground rules early, they are more likely to figure out what they need to do early on as well.

Thanks to all commenters and readers, this was an excellent bit of research for me to understand how other folks view this dilemma. I am lucky to have gotten my scholastic ride for free (as it were), and hope to help my kids as much we can.