Teach Your Kids to Be Frugal at Back to School Time

When your kids are younger, you worry about spending too much on their backpacks or maybe another outfit for the start of school (this is a good thing, controlling spending early on is a good thing for the kids too, because it sets their expectations to the right level as well). Still, the expenses become much more interesting as they get older, and they can balloon to enormous levels.

After driving up and down the 401 countless times, seeing, Vans, SUVs, and even Micras stuffed to the gills with furniture, computers, and clothes, it says loudly that once your kids get to University, back to school can take an exponential jump in your budget. I am not saying that this is a necessity, just that it can happen with over-zealous parents who want to give their kids the best.

Microsoft Canada Surface Book 3 English

The point of University is to learn, and one of the things that kids need to learn is how to cultivate and develop their own Inner Frugality. If you buy your kids $3000 worth of furniture for their apartment, they are effectively living YOUR lifestyle (i.e. it’s just like home), whereas maybe they should be learning to live a frugal lifestyle instead? At University, I had a treasure trove of old, used and scrounged furniture, and I loved it. No, my living room was not something out of “Better Homes,” but it was mine (mostly my parents gave me an old dresser), and that is (I think) one of those things a kid in post-secondary education (or one that has just moved out) needs, that sense of self.

Teach your kids to live within their own means when they spread their wings and leave the nest, and that may be the most important thing they learn.

Other Back to School Thoughts?


Inflation 4.1% August 2021 (Ouch)

For those that have not followed me since 2005, allow me to say, I told them so. Back in 2009, I warned Inflation was coming with all this stimulation, and here it comes (in 2021).

OK, so I am very much the Blogger who Cried Wolf on Inflation. I am not even sure this is going to be the beginning of an Inflationary spiral.

Stats Canada thinks:

The Consumer Price Index (CPI) rose 4.1% on a year-over-year basis in August, the fastest pace since March 2003, up from a 3.7% gain in July. The increase in prices mainly stems from an accumulation of recent price pressures and from lower price levels in 2020. Excluding gasoline, the CPI rose 3.2% year over year.

From Stats Canada Consumer Price Index, August 2021

This is the highest rate since before I started commenting in 2005? Something to note folks. Governments can’t keep printing money with impunity.

Gasoline is a major driver right now as can be seen when it is taken out of the calculations. Prices are rising, and you have Governments pumping money into the situation. What happens when that money stops? The other issue is you have a reticent workforce, who doesn’t really want to go back to their crappy jobs. Not a recipe for economic greatness.

What does the Bank of Canada think about this? Actually using their calculations we are only a little bit above their goals?

lternative measuresMay 2021June 2021July 2021August 2021
Measure of core inflation based on a factor model, CPI-common (year-over-year percent change)23451.
Measure of core inflation based on a weighted median approach, CPI-median (year-over-year percent change)23672.
Measure of core inflation based on a trimmed mean approach, CPI-trim (year-over-year percent change)23682.
Consumer Price Index statistics, preferred measures of core inflation – Bank of Canada definitions, year-over-year percent change, Canada

Source(s):Table 18-10-0256-01.

Additional Reads From Stats Canada

Previous Rants About Inflation

And that is just scratching the surface.


So in an article from May 2005, I described how I allocate my 3 daughters their weekly allowances.

The simple explanation is that I took advantage of the free transfers between accounts that I had signing authority to transfer the money directly to their accounts. At the time, this was new and exciting. This can be done now using Interac transfers, so your kids don’t even need to be at the same bank.

What I have learned now from running this experiment for over an extended period:


  1. I don’t forget to give them their allowances, which was the major problem I had.
  2. The girls learn how direct withdrawal works
  3. Some fiscal concepts like saving become obvious, which is good. I can also transfer baby sitting payments to my oldest, easily as well.
  4. They are using their money to buy things like gifts for friends and their own clothes, which was not the plan, but I applaud every time they do it.


  1. Kids don’t see the money, so forget that they have it.
  2. They have not picked up the “checking your monthly balance statements” the way I hoped, they rely on me telling them how much money they have.
  3. Money seems to be invisible to at least one of the children.
  4. The cafeteria at the high school takes direct withdrawal, so they use their allowances to buy lunch a little too often (IMHO).

All in all, I think the experiment is working. I need to sit down with the girls and discuss a few of the finer points I’d like to see, but I think it is working.

I am now searching for any other interesting experiments like this to teach my kids more about money. No, I am not giving them access to their RESPs. That is not going to happen until they need it!

Addendum Allowances

I have restarted this with my son. I am not sure how it will work with him, but the methodology is still sound. He still is working on what money really means, but he is slowly learning.

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Investing: And he’s an expert!

Back in 2006, I read a lot more columns on investing. Garth Turner was an expert at the time, but he got the Nortel thing very wrong. Always take this kind of advice with a large grain of salt. He was also a former Minister in charge of the CRA as well.

“If you own Nortel, or a mutual fund holding it, don’t bail out now… If you do not own Nortel, then this is the time to start accumulating it.”

– Garth Turner November 27th 2000

So Garth Turner is a respected Canadian Financial person, and he got it so wrong, it hurts, so remember that when someone gives you a “sure-fire” stock tip. There are no sure-fire stock tips out there (yes, from me too).

Oh, and in case you were wondering what other interesting things Garth has said:

“I am constantly amazed at the assumption people make that they can manage their own finances… most people can’t. They don’t have a clue how to pick stocks.”

– Garth Turner in a 2002 personal investment column regarding those unfortunate enough to have lost on Nortel

Just remember that anyone can TELL you what to do with your money (including me), but eventually, you are the one that has to live with the decisions, so you had better be doing some research of your own!

Of course, there is the “legend” of J.P. Morgan:

Legend has it that when the elevator operator in Baruch’s office building started asking him for stock tips in August 1929, the financier knew it was time to get out of the market. He was dead right!

I found these quotes on Rick Mercer’s Blog, a great blog with lots of interesting information (I think).


What’s important?

I have had a few folks comment on how I seem to be obsessed with money.

Let me assure you I only talk about money because it fascinates me.

The most important thing in my life is my family.

Family is the most Important Thing

On a Sunday you should take stock of everything in your life you are thankful for (or Saturday if that is your day of rest).

Debt reduction is important, Family and Friends though, are the most important.


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