Tax Incentives to Stop Helicopter Parents from Shortening the Life Expectancies of their Children

In a generation we have wiped out the practice of letting our children walk to school and of letting them play outside unsupervised. Sports are highly organized and competitive, forcing many children to quit by age 12 because they aren't destined to be superstars. Grade 8 PE teachers say they are seeing more and more kids who can't run,  jump or dribble a ball. This adds up to a booming health care industry, a stretched health care system, and a declining life expectancy for the average Canadian.

What's the cause? Helicopter parenting just might be the biggest culprit. Have you ever heard parents rationalize their child's lack of physical activity or justify forcing a child to specialize in one sport like this:
 
My kids will be abducted if they go outside without me!
There is too much traffic on the roads for bike riding!
I don't have time to walk my child to school!
I just want my kid to focus on one sport so he can make the rep team!

Fear-based parenting, a declining life expectancy and money

A few years ago the Federal Government introduced the Child Fitness Credit. You can get a tax credit up to $75 per child if you spend over $500 per calendar year on sports fees and memberships. This is a good idea, but where is the incentive to let your child try all kinds of sports every year and be active every day?

I think deeper tax incentives may help. How about additional tax credits for putting your kids in multiple sports in a single year, say 3 or more different sports per child? Or, what about tax credits for sport safety gear like bike helmets and knee pads?

As for helicopter parents driving kids to school and keeping their kids indoors to keep them safe, we may need to spend some money advertising in markets aimed at first-time parents. We need to let parents know that that the real world is really not scary...not as scary as unhappiness, low self-esteem, and a shorter, sicker life.

Copyright 2012. Laura Thomas. All Rights Reserved.
For reprint permission contact moneyme at telus dot net.

New Contest for Kids Under 18: Kids Teaching Kids About Money

Canadian kids can win an Ipad, Ipod or Ipod Touch plus big money for their RESPs by entering this contest by October 12th!

The Credit Counseling Society, a Canadian non-profit society that helps families deal with debt and other financial issues, is ringing in National Financial Literacy month (November) with a money contest for kids called, "How would you teach kids about money?"

UPDATE!

The contest deadline has been extended to October 12th

Students from BC, Alberta, Manitoba, Ontario and Saskatchewan who are under 18 are being asked to send in an original idea for teaching kids about money. Each entry, which can be no more than 500 words, will be judged on three criteria: originality and creativity (40%), how effectively it can be implemented across Canada (40%), and presentation (20%).

The contest, according to Stacy Yanchuk Oleksy, Director of Education and Community Awareness at the Credit Counseling Society, is about finding out what kids think they need to know about money. "It's easy for us adults to say what we think kids should know about money, but we wanted to hear directly from young Canadians about how they would teach kids about money," said Yanchuk Oleksy.

When asked what will happen with the winning ideas, Yanchuk Oleksy said, "The Credit Counseling Society intends to implement the winning idea(s) contingent on stakeholder support, funding, and available resources as we are a non-profit, charitable organization that takes managing its income and expenses very seriously."

Entries are due October 12, 2012 and should be submitted by email. For complete contest rules, please visit the Credit Counseling Society website.

Please help spread the news by posting this article on your Facebook page or forwarding it to your child's teacher. The more kids we have thinking and talking about money the better.

Copyright 2012. Laura Thomas. All Rights Reserved.
For reprint permission contact moneyme at telus dot net.

None the Richer: Why the Olympics Don’t Inspire Us to Have Better Bodies or More Money

Every two years when the Olympics dominate the media and influence water cooler chit chat, there are always a couple of sore points that can come up on a personal level—blowing budgets and being out of shape.  Not that Pierre de Coubertin (founder of the modern Olympics) ever planned it this way. His created the Olympics to promote goodwill among rival nations, and, more importantly perhaps, inspire the common folk to aspire for excellence in their daily lives.

Excellence in our daily lives includes being fit and healthy both physically and financially. On a national level that means a lower rate of obesity and a balanced national budget. On the home front, that means an active family life full of sports and recreation along with a balanced household budget.  

With North American obesity rates in children rising above 30 percent and an ever-increasing per capita rate of both public and private debt, the Olympics is an interesting phenomenon.  On the one hand, the Olympics are all about physical activity and money, but on the other hand they don’t seem to be doing a good job of inspiring excellence in either of those areas of life beyond the podium.

Think about it. One of the dominant narratives of the modern Olympics is budget overruns. Take this year’s London Olympics. Back in June, before the games even started, economists were predicting that this would be the most over-budget Games since Atlanta in 1996, which went over by 147 percent. A study of the previous 17 Olympics suggests that the average cost overrun for the Games is a staggering 179 percent. 

Ironically, critics grumble about Olympic budget overruns, but at the same time do not have a budget in place to monitor their personal household spending, which could easily be over 179 percent as well. And, how many of us make a family “activity” out of huddling around the TV eating junk food while watching super-fit athletes go for gold?

The Olympics have been coming and going every two years for a long time now.  Despite legacy programs that have put money back into host communities through a variety of literacy-based grants, it’s a wonder that our bodies and our bank accounts are not any richer for it. It could be that the lack of basic literacy around physical activity caused by severe cuts to physical education programs in schools coupled with the lack of financial education in the school curriculum is making it harder for us to be inspired by the Olympics.

I’ve heard it said that knowledge acquisition is like Velcro. Nothing sticks unless there is something for it to stick to. Bringing back physical education to elementary schools and introducing financial education to the curriculum could go a long way toward inspiring Olympic-level excellence and helping future generations have better bodies and more money.

Copyright 2012. Laura Thomas. All Rights Reserved.
For reprint permission contact moneyme at telus dot net.

Financial Thriller for Kids Seeks Support on Kickstarter.com

With just seven days to go to reach his project funding goal of $3,400, MBA professor turned novelist, Craig Everett is confident that his new book will be a hit with teens and parents alike.

Toby Gold and the Secret Fortune is Everett's first novel about a teenage boy who has "freakish" money skills and uses those skills to solve a crime, plus save his friends and school. When asked what he means by "freakish" money skills, Everett said that Toby is gifted in math and can, among other things, calculate compound interest in his head. Toby also has a Midas touch when it comes to making money with businesses like dog-walking and trading in fruit snacks. This is not surprising when you consider that the author has been very involved in the high-school entrepreneurship organization, Junior Achievement.

Everett, father of five, is a big supporter of the financial literacy movement. And, like many of us supporters, he is disappointed that financial education programs for kids have mixed results. His solution to this lack of stickiness with financial concepts is to hit kids from as many angles as possible to reinforce basic money lessons. Fiction, he believes, is one of the angles. The time value of money, reading financial statements, and return on investment are just a few key concepts that readers of Toby Gold books will be exposed to.

This book, said Everett, will be the first of several in a Toby Gold series aimed at the same 9 to 14 year old crowd that reads Harry Potter and Percy Jackson books. When asked what the biggest money lesson is that kids will take away from the book, Everett said, "Save half." That is Toby's catch phrase and it refers to saving half your income and investing the rest so that you become financially independent very quickly.

How can you help get this book into teenage hands? Please go to TobyGold.com and choose from one of the many pledge levels.

Copyright 2012. Laura Thomas. All Rights Reserved.
For reprint permission contact moneyme at telus dot net.

Weird Things That Can Happen With Money

Money is such a weird thing. It reminds me of abstract art. From it's unknown intrinsic value to the joy of finding five dollars on the sidewalk, do we really know what money is or why it really affects us so much? Do we understand how it moves around behind the scenes? Do we really know who is profiting from a deal and who isn't? Can we really control it? Or is it a force beyond our reckoning?

Here are some weird, uncomfortable, and somewhat scary scenarios that have hit my radar lately. I've listed them in order from just plain weird to just plain awful, with #8 being the worst.

#1 The golden ticket.
When you go from being self-employed to employed, banks suddenly love you and will lend you lots of money. That employment letter is like a golden ticket to the weird world of borrowing. But, be careful...sometimes the ticket is written on toilet paper (see weird thing #8).

#2 Why cheques get held. 
I was at the bank yesterday with a large cheque. Because they knew me personally, they didn't put a 5 day hold on it. I didn't actually care either way, but what if I did need the money right away and they didn't know me?

#3 Wondering if your banker is really on your team?  
Who knows. I am never truly sure. Am I just a dollar sign or a am I a person? Am I really being given the best rates possible? Hard to say. It feels very nebulous.

#4 Asking to raise or lower your credit card limit.
This is an awkward, personal conversation in which you have to share the details of why you want to raise or lower your limit. Not fun.

#5 Being told, "It's your own fault that you're not rich."
I went to a seminar recently and was hammered pretty heavily with the message that I must be fundamentally flawed, lazy, financially illiterate and basically stupid if I'm not rich. It was a shame-people-into-buying approach to sales. Not good. I didn't stay for the last day.

#6 People taking money that is not theirs.
I've been hearing about non-profits who lose large chunks of money to the very people who volunteer to run them, and then have to take them to court to get some of it back. This kind of thing destroys morale.

#7 When a stock goes to zero.
I own a stock that has gone from $6 a share plus dividends to 5 cents a share and no dividends. Where did my money really go? What can I do about it, other than try not to make the same mistake again? Do I sell it now? Or just hang on and hope? I feel like such an idiot.

#8 Not getting paid.
I've watched a friend suffer because his employer has been unable to pay the staff for a while. It's like he is being held hostage and multiple areas of his life are being affected by the stress. Imagine being in this situation with three little kids and just one family breadwinner. You wouldn't wish this on your worst enemy.

If you have any weird money things going on in your life, I wish you all the best. And, please remember that your intrinsic value is known and measurable. You matter a whole lot more than money.

Copyright 2012. Laura Thomas. All Rights Reserved.
For reprint permission contact moneyme at telus dot net.

Guerrilla Messaging and Other Creative Ways to Talk to Teens About Money

If your little Ella is hitting the teen years and you’ve been mum on the topic of money since she bounced into the world, you’ve got a big problem. Your lovely, pubescent creature is mining nuggets of financial misinformation from her peers on Facebook and beyond. Why? Because she thinks it’s a taboo topic at home.

But don’t freak out. There is hope. You can start talking to your teen about money as soon as you finish reading this article. Here’s how.

Guerrilla Messaging

The next time you and your spouse are driving the family somewhere, plan in advance to make the conversation go something like this:

“Honey, who’s paying for Evan’s university?”
“I dunno.”
“What do you mean you don’t know? Don’t you have money saved up?”
“I don’t think so. He’s got to get himself through school like I did. McDonalds, maybe?”
“Okay. Maybe he can mow 10,000 lawns between now and then.”

Keep the banter going until your “Evan” chimes in with some worried questions about who exactly is going to pay for his education.

Loan Sharking

The next time your teen asks for twenty dollars to go out with her friends say “sure, sweetie,” but then produce a typed-up loan document with the following terms:

• The full amount must be paid back in seven days. 
• Any amount outstanding will result in an additional dollar per day loan fee.
• The document must be signed by your teen and yourself, plus a witness. 

Put the document up on the fridge, and be tough but open-minded to any suggestions your teen might have for working off the debt.

Price that Gruel

Okay,so maybe you’re not serving gruel for dinner tonight, but I can guarantee you are serving a meal that you can attach a dollar sign to. Come up with a rough estimate of what the cost is of getting that meal from the store to your table. Write that number on a piece of paper.

Then, at the beginning of the meal, announce that you will give twenty dollars to the person who comes closest to the actual cost of the meal. After the dishes are done, bring the family back to the kitchen table and see who is the closest.

Now,that’s enough reading. It’s time to set up your teen to talk to you about money. Be creative, have fun and make them sweat a little.

Copyright 2012. Laura Thomas. All Rights Reserved. 

This article will be appearing in Your Teen's Money Skills.com later this week. 

For reprint permission, please contact moneyme at telus dot net.

How to Get Paid More on Payday

One of the secrets of wealthy individuals is this: don't give Revenue Canada more of your money than you need to at any given time. There are ways (legal ways) to reduce the amount of money that is "withheld" for the government on every pay cheque. And it doesn't matter what tax bracket you are in, you will benefit in the long run by keeping more of your money and putting it to work for your family sooner.

Here are two ways you can do this. But, before I go on, I should probably mention that the first step in paying less tax and reaping more tax benefits in the course of your life is to file your tax return every year. Not filing does not make it all go away and it will cost you a bigger pound of flesh in the end.

Now back to the two ways you can reduce your withholding tax right away.

Tip 1: Fill Out a TD1 Personal Tax Credit Return

You may have filled this out when you were employed but, even so, you should make sure that it truly reflects your family situation as it is today. Your employer can give you a copy, or you can download it from the CRA website and give it to your payroll person. And don't be shy about redoing this form every tax year or as soon as your situation changes.

Some of these tax-changing situations include: having a child, turning 65, having a change in pension amounts, going back to school, becoming disabled, changing your marital status, starting to support a common law partner or spouse, or starting to look after your parents or grandparents.

Here is a snippet from the form. Note that unlike the T1213 (below) which goes directly to CRA, this form goes to your employer.

Tip 2: Check Out Form T1213 Request to Reduce Tax Deductions at Source

As I mentioned above, the T1212 form to reduce taxes withheld on your pay cheques (or on a lump sum) is  between you and CRA. You have to submit this form every year and can use it if you are contributing to your RRSP, have childcare expenses, are making support payments, have employment expenses, and other expenses not covered on the TD1.

Once you complete the form, you have to send it to CRA. CRA gets back to you in about 6 - 8 weeks with a decision letter which you can then give to your employer to have withholding taxes reduced. This is a good thing and fairly easy to take advantage of.

What should you do with your extra money every month? Follow another secret of the wealthy: use the time value of money to either pay down high-cost debts or invest and earn interest or dividends of some kind.

Copyright 2012. Laura Thomas. All Rights Reserved.
For reprint permission contact moneyme at telus dot net.

Assets Are Not What You Think They Are

The boring old dictionary definition of an asset reads something like this--an asset is anything that is valuable or useful.

Does that mean toilet paper is an asset? An argument could be made that those little squares of white paper are both valuable and useful. The same could be said about a computer or a stove or a pick up truck. But are these really assets?

According to Rich Dad, Poor Dad author Robert Kiyosaki in his book, Unfair Advantage (c.2011), an asset is something that brings you positive cash flow...that's it. Your house you live in, by that definition, isn't even an asset. It's an expense.

Now, I confess that I'm not actually reading Unfair Advantage right now but someone very close to me is, someone who has not stopped talking to me about the content since he "borrowed" it from my desk a week ago. I was planning to read and review it, which is why it was on my desk available to be borrowed.

From what I can see, this book could be a game changer for readers who are looking for ways to maximize their personal and financial potential, even if they did not know they were intentionally seeking to maximize either of those things. According to my reader-friend, Kiyosaki's Monopoly-game approach to wealth-building and his straight forward prose loaded with personal stories is powerful.

I've been told that Kiyosaki is brutally honest and in your face about the stupidity of following conventional financial wisdom that says we all have to live within our means, save money and invest in a diversified portfolio of stocks, bonds and mutual funds. He says that all of those those ideas are lies that leave you poor and broke. Those are powerful thoughts indeed.

So if toilet paper and the houses we live in aren't assets, what are? Like a fresh-faced convert my reader-friend can answer this off the top of his head--businesses, real estate that earns income, commodities and income earning investments are assets, and anything else you buy is an expense, even those things in which your are hoping for capital gains.

In short, positive cash flow = asset. Is this life-changing financial knowledge? I'll let you know.

Copyright 2012. Laura Thomas. All Rights Reserved.

For reprint permission please contact moneyme at telus dot net.

The Wealthy Barber Returns - Review

Let me say two things right off the bat.

First, I was sorry to see that David Chilton abandoned the "fictional" approach he used in his millions-of-copies-sold book, The Wealthy Barber. I am not sure why he chose to communicate with us in a an almost Tweet-like style of prose in his second personal finance book, The Wealthy Barber Returns. It's a terribly annoying style, but that's just the writer in me talking.

Second, it has taken me a long time to get around to blogging about Dave's new book (which was published last year) and the only excuse I have is that it's been like sucking on a jawbreaker. I just can't rush it. And, I confess, if I have a second excuse for putting off writing this review, it may have something to do with the fact that though he's the only person I know who responds to emails almost instantaneously, he also keeps putting off my requests for an interview.

Anyway, I've read and reread, skimmed and perused, trying to think how best to review it, which for me typically means rooting out the essential nuggets of wisdom and sharing them with my readers. This time though, every page has a wealth of nuggets so I don't know where to start with what is, essentially, one man's philosophy of money.
Some of the most interesting nuggets for me are:

• The idea that we shouldn't hang out with people who can afford a richer lifestyle than we can because it is too tempting to go into debt trying to keep up.
• Paraphrasing Jean-Jacques Rousseau, Dave writes, "When we covet things we can't afford, we grow poorer regardless of our incomes." He talks about maxing out on your mortgage as a big mistake which is entangled with this concept and with happiness in general.
• This simple concept: save first, spend second.

On the homepage of his website, Dave has a note about the new book. At the end of this note he writes, "In a way, I’ve been writing this book for more than 20 years. I really hope you enjoy and benefit from its ideas. Even if you don’t, though, please tell others that you did."
Okay, Dave, I've told my readers that I love the book...how about that interview?

FOLLOW UP
Within about half an hour of posting this review, Dave called me. He's promised me an interview, so I have asked him to be a guest on series three of Money Moment, which, by the way, is going to half-hour episodes.


Copyright 2012. Laura Thomas. All Rights Reserved.
For reprint permission contact moneyme at telus dot net.

Rewrite Your Money Story

I'm up early and it hurts. But, it's the best way to guarantee that I have a few hours a week to work on my book, The Naked Storyteller.

Like most artist-driven projects, I'm doing it on spec. It's not like my other writing work in which I know that I will be paid before I even sit down at the computer. This is why my spec work is relegated to the more painful hours of the day. And, since there is no guarantee I'm going to get any money for my book, it's almost impossible to get out of bed and work on it some days.

But this morning, as I've been sitting here gearing up to write, I noticed something. Some very successful people who are my Skype contacts are up too. That instantly changes the story I can tell myself. I'm no longer up at this hour because I'm struggling to find time to work on my spec project. I'm up because successful people get up early and work hard. Getting ahead of the day isn't project specific, it's a powerful self-narrative.

Here's another example of the power of personal narratives. Harry Tyke, the main character in my book, gave up his dream of becoming a journalist because his parents wanted him to buy their house (a house completely out of his league without his parents' financial support) on the condition that he get a job with a government pension. At the age of twenty, Harry dropped out of journalism and went into teaching.

Fast forward to middle age and he's been a grade six teacher for over twenty years. He's miserable but feels that he has set his course and is powerless to change it. As master narrator of Harry Tyke's life, I'm going to rewrite the way Harry thinks about himself. By the end of the book... You'll have to buy it if you want to know what happens to Harry, but you know what I mean. What we think about ourselves, the story we tell about our lives, the framing, matters.

This works for money too. How we spend, save, invest and share is dictated by the stories we tell ourselves like: Living in a big house makes me happy. Everybody owes me.  I'm sure I'll be able to pay off my credit card some day. I really need that new toy. I'm worth $45,000 a year. The money won't get to where it's really needed, so why bother donating? No one really understands the market, so why should I invest?
 
This is great. Be empowered. Every story you tell yourself about money can be changed, any time, even on the fly. Look at my story about getting up early. I get up early and write because I am a successful writer. Early is where I belong.

Copyright 2012. Laura Thomas. All Rights Reserved.
For reprint permission contact moneyme at telus dot net.