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Budgeting for Back to School

September 9, 2020 By Samantha 3 Comments

The global pandemic has already transformed schooling in Canada and around the world. Boards, teachers, children, and parents prepare for a different school year during which they either stay home or attend classes every other day. Budgeting for back to school has also become important as many parents face financial hardship and challenging times ahead.

How Spending Patterns Have Changed

It does not come as a surprise that Canadian parents spend less on back-to-school supplies this year. A survey by the Retail Council of Canada shows that the percentage of shoppers who spent more than $0 dropped across different categories in 2020 – 81 percent for supplies compared to 86 percent in 2019, 69 percent for apparel compared to 78 percent, and 33 percent for books and movies, down from 35 percent. According to Suzan Krecsy, executive director of the St. Albert Food Bank, parents need about $1,000 to prepare kids for the new school year which is a lot of money for those who are unemployed or have low incomes.

Save Money on Back-to-School Supplies

A new Deloitte survey asked parents how much they would spend on supplies and other items that kids need in grade K-12 this year. On average, parents said that they would spend $316 on online subscriptions and electronic gadgets, $395 on hardware and computers, $216 on clothing and apparel, and $102 on supplies. This is a lot of money. On top of this, parents are stocking on wide-mouth water bottles, facemasks, hand sanitizers, and other items they would have never thought of buying before the pandemic.

Obviously, supplies can be expensive when all purchases add up, from new uniforms and clothes to pencils, erasers, highlighters, and index cards. Shopping out of season is one way to save money as once the new school year starts, retail stores discount all the folders, notebooks, pencil sharpeners, and markers.

To save money on back-to-school supplies, it also pays to shop around, check flyers, use coupons, and make a list of stores to visit and benefit from the best deals they have on offer. Sales are also posted daily online.

If your children need big-ticket items such as a laptop or tablet to do their homework, it also pays to ask the principal if they have a budget for this or electronics that you can borrow. If this is not the case, visit stores that advertise educational discounts or offer refurbished devices.

 Include Your Kids in Back to School Budget Planning

Ask your children to go through what they have from last year as some items can be reused, whether markers, erasers, or pencil cases. Sit together and make a list of all the items they will need, depending on age and grade. In kindergarten, for example, your kids will need things like glue sticks, colored pencils, crayons, and assorted construction paper. Children in grades 1 – 3 use index cards, rulers, pencil grips, pencils, and washable markers. The list is quite long for students in high school and middle school. They need graph paper, loose-leaf paper, highlighters, plastic folders, book socks, etc. Go through all the items that you have at home to find out if they can be reused. If you have children in different grades, you probably have plenty of stuff that younger kids can reuse.

Asking children what they find important can also save a lot of money. They might be more than happy to reuse their backpack or lunch box from last year. This is also a good way to teach them how to budget and handle money. Learning about budgeting, spending, and saving early in life helps children to make informed financial decisions later on. They have the skills for successful financial interactions.

Teach Kids to Manage Finances

Involving children in back-to-school shopping is also a good way to teach them how to manage personal finances. Many Canadians lost their jobs and live with uncertainty but this is not the main lesson that you want to teach your children. Making responsible choices and spending decisions is the lesson that you would like to stick with school-aged children. This is also a way to encourage kids to distinguish between wants and needs.

Teaching children to manage finances also helps them to learn how to delay gratification and wait to buy the things they want. In fact, this concept is difficult not only for kids but for grown-ups of all ages. It pays to start early, and back-to-school shopping definitely helps parents teach kids important money lessons. When going to the store together, only pick things that you have on your list. This helps children learn not to buy things for the sake of buying which is basically splurging. When going to a store to buy a gift for someone, tell your kids that you are not there to buy things that they just spotted but only that gift.

Other ways to teach children about finances are to ask them to set goals, create sharing, spending, and saving jars, and involve children in money decisions and your family budget. Always tell them how much you have for leisure activities and entertainment, be it board games, toys, movies, or anything else. You can also try to come up with a family goal that they like and keep track of how close you are to achieving this goal. You may want to create a progress chart and ask kids to color in so that you can all check where you stand.

Save for Your Child’s Postsecondary Education

Budgeting for back to school also helps save for university or college, provided that you plan to fund your child’s postsecondary education. Unless you run a successful business or are really well paid, you have to give up on something, be it your retirement savings or things that are not worth splurging on. Saving on supplies can also help fund college education, especially if done on a year-to-year basis. To this, it is a good idea to create a back to school budget and compare what you spend and save each year. The first step is to list all essential items and decide what you can buy later and what is a must. You can buy non-essential items when you find good deals /for example, off season/. Next, you should check how much money you have. Add up your monthly income and expenses such as utility bills, rent, grocery shopping, loan and credit card balances, etc. Look at how much you have left after you deduct all expenses and compare this figure to the total cost of school supplies on your list. This will show you whether you might have to put any items on your credit card. If so, go through your shopping list once again to decide which items are must-haves. If you need extra money to buy back-to-school supplies, this shows that you might have to start saving for next year early on.

motusbank – Meridian Credit Union Creates a New National Bank

May 3, 2019 By Samantha 2 Comments

A subsidiary of Meridian Credit Union, Motus Bank features a suite of financial products, including mortgages, personal loans, investment solutions, and savings and checking accounts. As a full-service digital bank, it will soon introduce banking services tailored to the needs of business customers. Motusbank is a Canadian federally chartered bank that opened doors in 2018 and is headquartered in Toronto, Ontario. It is also a member institution of the Canadian Deposit Insurance Corporation.

The idea behind the new bank is to offer customers across Canada the opportunity to access all services and products and to manage accounts online. In fact, virtually everything can be done by phone, mobile app, and online. The new bank is customer-oriented and offers checking and savings accounts with no monthly fees.

Meridian Credit Union

As Canada’s third largest credit union, Meridian offers personal and business financial products and online banking services. Individual customers are offered a selection of checking accounts, including U.S. dollar, senior, electronic, and limitless. Meridian also features youth, advantage, and high-interest savings accounts. There is an array of credit cards to choose from, with cash back, U.S., travel, and Visa benefits. Lines of credit, personal loans, and fixed and variable rate mortgages are also available. Travel insurance and mortgage protection are also offered as well as investment solutions such as registered retirement income funds and tax-free savings accounts. Business customers also benefit from a wealth of financial products, including business U.S. dollar checking and small business checking accounts. In addition to cashback credit cards, customers are offered business lines of credit, loans, and mortgages, and equipment financing and leasing. Meridian also features cash management and investment solutions and business planning assistance.

Competitors

Unlike financial institutions that have shareholders and pay profits, motusbank has members and the main goal is to offer personalized service, competitive rates and pricing, and the option to access all products online, including mortgages, investment solutions, lines of credit, and more.

Why Choose motusbank

This new full-service digital bank features a selection of investment, borrowing, and savings solutions with competitive rates. Given that Motus has no physical branches and associated overhead costs, customers enjoy affordable interest rates on mortgages and personal loans. Another benefit is the fact that decisions on applications for loans, mortgages, and other products are made quickly.

Personal Loans and Other Borrowing Solutions

Personal loans come with low interest rates that can be as low as 5.15 percent, and members can borrow up to $35,000. Secured lines of credit feature even lower interest rates (3.75 percent) to help customers secure financing for major purchases. It is quick and easy to apply, and customers only need to provide their social insurance number and information such as housing and family status and employment type. They are also asked about the amount required and the loan purpose, i.e. vacation, investment, home repairs, debt consolidation, or recreational vehicle, boat, or vehicle purchase. Motusbank also features fixed and variable rate mortgages with affordable interest rates that can be as low as 2.90 percent. 5-year fixed rate mortgages come with an interest rate of 3.09 percent. In comparison, Scotiabank offers an interest rate of 5.34 percent on the same type of mortgage, and the Bank of Montreal offers 3.54 percent. Secured home equity lines of credit also feature a low rate of just 3.75 percent. CIBC, for example, offers a rate of 3.95 percent on secured credit lines.

Savings and Checking Accounts

Motusbank also features a selection of checking and savings accounts, including RRSP, TFSA, and high interest savings accounts. Customers who choose to open high interest savings accounts can enjoy a rate of 2.25 percent. Savings accounts offer multiple benefits such as the option to make unlimited withdrawals and purchases, free-of-charge access to ATMs, no banking fees, no minimum balance requirements, and no monthly account charges. Motusbank also features checking accounts with no monthly fees, and customers enjoy unlimited Interac e-transfers. There are plenty of reasons to choose this type of account over products offered by other banks. The account has no minimum balance requirement and allows for unlimited bill payments and debit purchases. Another benefit is that every dollar earns 0.50 percent interest. Customers are free to make mobile check deposits and are offered 25 checks free of charge. Those who are travelling to the U.S. can access cash through the Cirrus or Accel ATM networks.

Investment Products

Motusbank also features investment solutions such as 5-year RRSP guaranteed investment certificates, 18-month TFSA GICs, and 18-month GICs. The 5-year RRSP GIC, for example, comes with a competitive interest rate of 3.25 percent, which makes it a good addition to a balanced investment portfolio. In comparison, CIBC offers non-redeemable 5-year RRSP GICs with an interest rate of 1.25 percent. Opening an account is quick and easy, and customers are asked to provide details such as personal information, term and length, and renewal option, i.e. reinvest in the same term or payout to the account. The bank features additional benefits such as tax free options, choice of non-registered and registered plans, and a low minimum investment of just $100. Terms vary from 1 month to 5 years.

Online Banking and Features

The online banking platform of motusbank offers convenient features to access and monitor investment accounts and view e-statements. Customers are free to download deposit forms and transactions and filter and sort accounts. Notifications, alerts, and secure messaging are also available. Depositing checks is also quick and easy and can be done from the customer’s phone. There is also an option to set up mobile alerts. The mobile app offers convenient features that allow customers to transfer money, make bill payments, and check account balances, including savings and checking accounts and tax free savings accounts. Mobile Bill Pay is a convenient feature that allows users to make bill payments and access more than 10,000 payees. The app can be used on Android and iOS devices.

The Money Mover service featured by motusbank offers customers the option to transfer large amounts of up to $10,000 daily and is free to use. Money is transferred within 3 business days. Users are also free to set up recurring and future transfers through the mobile app or online. Motusbank also features Interac payments to transfer amounts of up to $3,000 a day, and money is deposited immediately. Customers can make an unlimited number of transactions up to $10,000 a month.

The bank’s contact centre offers assistance to members and can be reached by dialing its international or toll free number. While the bank is fully digital, the fact that it is customer-centric means that the emphasis is on customer service. Motusbank also places an emphasis on safety and security, and all deposits are insured by the Canada Deposit Insurance Corporation.

Finally, the new bank also offers advice and practical information across a host of different topics related to borrowing, investing, and saving. The goal is to help customers learn more about dealing with debt, planning for retirement, preparing financially for a new child, and choosing the best investment solution. Other topics include home improvement loans, choosing between variable and fixed rate mortgages, down payments. The bank also features handy online tools such as mortgage prepayment calculator, savings calculator, retirement planning calculator, and loan and line of credit calculator. These online tools help customers figure out what size of mortgage to apply for, whether their monthly payments are affordable, and other important issues.

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