Banks vs. Credit Unions: Which One Should You Trust with Your Money?

Woman smiling

Banks vs. Credit Unions: Which One Should You Trust with Your Money?

Banks and credit unions are financial institutions that provide similar services, such as savings accounts, checking accounts, loans, and credit cards. However, there are significant differences between the two. This post will discuss the differences between banks and credit unions, their advantages, and the risk associated with depositing your money in them.

What is a Bank?


A bank is a financial institution that accepts deposits, makes loans, and offers various financial services to individuals and businesses. Shareholders usually own banks, and they operate for-profit companies. In other words, banks are owned by people companies who invest their money in them, and they try to make a profit.

bank buildings

Advantages of Using a Bank:

  1. Convenience: Banks usually have a more extensive branch network, more ATMs, and offer online banking services, making it easier for customers to access their accounts and manage their finances.
  2. Availability of Products and Services: Banks offer a wide range of products and services, such as debt in the form of credit cards, mortgages, lines of credit and other loans, wealth management services, and investment options.
  3. Technology: Because banks operate on a for-profit model, banks are more likely to have the latest technological advancements and innovations to entice more clients and drive down costs. Technology, such as mobile banking apps and digital wallets, can make banking more accessible and convenient.

What is a Credit Union?


A credit union is owned by the people who use it. To use a credit union, you must be a member of the credit union. This is different from buying a bank share since you do not need to use the bank to become a shareholder. And if you are not a member, you can not be a credit union shareholder.

Credit unions are non-profit financial institutions that focus on helping their members by offering financial services. Members of credit unions are also shareholders and have a say in how the credit union is run.

Advantages of Using a Credit Union:

  1. Lower Fees: Since credit unions are non-profit organizations, they tend to have lower fees and better interest rates on loans and savings accounts. 
  2. Better Customer Service: Since credit unions are often smaller than banks, focus on bettering their members, and are not focused on profit maximization, they tend to offer more personalized service and are more likely to work with their members to find solutions to financial problems.
  3. Community-focused: Credit unions are often community-focused and are more likely to support local initiatives and charities.

Risk to Deposits:


Both banks and credit unions are insured, meaning depositors’ funds are insured. For example, in the US, accounts are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) for banks and the National Credit Union Administration (NCUA) for credit unions. Deposits up to $100,000 are insured in Canada by the CDIC. Canadian credit Unions are insured by provincial deposit insurance corporations, which provide coverage to their member credit unions. The maximum amount of money insured by each regional deposit insurance corporation varies. Most provinces/territories insure more than the $100,000 guaranteed by banks, and in some regions, 100% of your deposits with no maximum amount!

ATM machine



In conclusion, both banks and credit unions have advantages, and the choice between them depends on your needs and preferences. Therefore, it is essential to research each institution’s products, fees, and services and weigh the benefits and risks before making a decision. Ultimately, the most crucial factor in choosing a financial institution is finding one that is insured, stable and meets your financial needs.

This question we all ask that needs to be retired!

Kids going off to university

The question we need to be retire!


I’m going to take a shot in the dark. If you are in your late 20s or older, you are likely working a different job than you did when you graduated. Maybe you are in the same organization, but your title and responsibilities have changed. But, on the other hand, if you are older, say forty and up, you are likely doing something you couldn’t have dreamed of doing when you were in school.  

How many of us know someone who graduated from biology and now works in the audit department. Or someone who graduated as an electrician and is now a founder or CEO of a business. The data is in. The average adult will have 12 jobs throughout their lifetime. The days of staying in one position in the same company have long passed.

In just the past few weeks, I’ve spoken to several friends who told me their stories of their career twists and turns. Stories of gap years, multiple roles, voluntary and involuntary time off work, the contemplation of solopreneurship, going back to school, and everything in between. So if getting a job and staying in it for your career has passed, why are we still asking our children, “What do you want to do when you grow up?” If the Great Resignation has taught us anything, it is that we need to retire that question. Just as our jobs do not define the person we are or will be, neither does our degree. That is the message we need to be providing our kids.

The Pressure


The pressure kids are under early on to figure everything out is not The Question Stressing a teenage girlsustainable. So many teens feel this intense pressure to get into the best schools, know what program they have to get into, max out on extra-curricular activities, and have every step of the next fifty years planned out. Combine that pressure with all the uncertainty the last few years have brought, and I think this is too much to ask of our young people.

Ask most adults in their 30’s, 40’s, or 50’s what they want to be when they grow up, and they will jokingly admit that they are all still trying to figure it out. I know I am. So if adults, with all the wisdom of hindsight, are still figuring out our professional lives, why would we expect a teenager to know better?  

And that pressure is causing massive problems to young people’s mental and financial health.


The Mental and Financial Burden


Most of us are aware of the student loan crisis. Student Loans in the US total more than $1.7 Trillion. That is a thirteen-digit number, thirteen! That amount is unbelievably high. Even with the recent debate over student loan forgiveness that crisis will likely get worse. In the short term interest rate, hikes will raise the cost of loans. And debt forgiveness does nothing to address the root cause of the problem, the growing cost of higher education.

Managing massive student loans is a heavy burden to start your adult life. That burden is even harder to carry for those who don’t finish their degree. Now they have the loans without the benefit of the credentials. 

That debt burden is causing young people to put off major life decisions like getting married, having kids, or buying their first homes. It is also forcing them to make decisions that impact their short and long-term financial well-being. They are putting off building an emergency fund or saving for retirement. And those sacrifices don’t even take into account the feelings of stress, anxiety and depression that can come with adding a mortgage size payment to your budget before you have a house or a job.


Reframing The Question


I hope we can help motivate more students and reduce the overall stress levels if we start to reframe post-secondary education. The degree you choose will not define the rest of your life! Many adults learn this after years in the workforce. But it is not the messaging we give to our children when we ask them, “What do you want to be when you grow up?” 

Earning a degree gives you a foot in the door. It is your opening move in the chess game of your professional career. Once you have that first job, you can course-correct if necessary. Change roles, change companies, change careers altogether. I think this reframing could take some of the stress off our young adults and give them the motivation to finish their first degrees. 

My First Degree

I floundered in my first years of university. I wasn’t sure what I wanted to do when I started my degree. My dedication to the degree was so low that I was kicked out of my program. Fortunately, I have that gene that gets motivated once someone tells me I can’t do something. Being kicked out of my engineering degree was the motivation I needed to get my grades up, get back in the program and earn my degree. 

But the funny thing is, even when I was motivated to graduate, I knew my degree was not the line of work I would want to do. I knew that the degree would only be a means to an end. I knew that because we were in the middle of the dot com bubble and engineers were in demand.  

What I “knew” turned out to be a bust once the bubble burst, but I was still valuable because of the skills I had picked up on my education journey. Those skills led to my first job out of university and also gave me insight into what I did and did not want to do going forward.


Kids going off to high school

A New Better Question

I think it is time we change up our question. Again, it goes back to my desire for us to speak to our kids with more intention when it comes to money matters. Instead of asking “what do you want to do with the rest of your life?” A question that is daunting to most adults. Let’s ask, “What is something you can imagine doing for the next five years?” 

Yes, just five years. Five years is enough time to earn a degree and give a career a shot.   Five years is also a little more than the average amount of time most adults stay in any one job. Phrasing the question this way gives our kids a bit of an out. Dedicate yourself to this task for five years. If you don’t like it after five years, you will still have the degree and maybe even some work experience. You might even have something more valuable than either of those. You may learn what you don’t want to do.

Don’t have our children try to think about what they could do for the next 50 years. That time horizon is just too long; chances are almost no one will do the same thing for that long anyway. So let’s ask them, what interests you? What is something that interests you enough that you could stick with it for five years? Even if it gets hard, you have enough interest to stick with the good and the bad for five years.

I hope that by asking the question this way, we can help focus and motivate our kids. Motivate them without putting too much pressure on them. And hopefully, that will help to get more of them into the workforce and on to their first, second or third careers.


My parents didn’t talk to me about money [2022 Update]

In a previous post, I touched on the idea that you do not need to be an expert to talk to your children about personal finance.  In this post, I want to focus on some common refrains you may have heard in your childhood- “We don’t talk about money.” or “Don’t worry about it” or “My parents didn’t talk to me about money, and I turned out fine.”

I consider myself very fortunate growing up because I did not hear any of those phrases in my house.   My parents were very open about the topic of finances. However, I recognize that this was not typically the case in many homes.  For many of you, the topic of money, especially with your parents, may have been a forbidden topic. Money is not something you could talk about. It would have been just as inappropriate to talk to your parents about money as it would have been to ask them how many times they had sex.

If this resonates with you, I can understand why you may be hesitant to talk to your child about money. Our environments shape how we relate to our world, and thus, you may feel paralyzed around this topic. Many parents have admitted that this resonates with them, and they are regretful that they never broached the topic with their children.

What Are You Passing On?

Why is it that money can be so taboo? Is it related to feelings of shame or embarrassment about the finances, what our parents had, or didn’t have? Or perhaps it was their lack of knowledge on the topic?

How might this affect a child, the lack of transparency? If your parents didn’t talk to you about money did it result in feelings of shame or embarrassment? Some report that it made them feel as if they were not a trusted confidant to whom their parents could share that personal information.

We often inherit our parents’ values around subjects as personal as these. So how have your experiences shaped the way you feel about money now? Does the thought of talking to your child about money, raise those same feelings?  Do you still feel embarrassed or shame? More importantly, do you want to pass those values and feelings on to your kids?

I have a feeling the answer is no.

Be Conscious and Deliberate

A lot of feelings we have towards money, and even actions we take with our money, are irrational. I love the study of behavioural economics because it confronts the fact that people are not rational beings. We may know that we should save, but instead, we spend. We know that retail therapy will leave us feeling worse in the long run, yet we continue to do it anyway. Yet, if we want to have a strong grasp on personal finance, we do need to act rationally and be aware of our feelings and actions regarding money. To truly be reflective and self-aware, we need to go back and revisit some of our early experiences with money.

If the subject of money was “off-limits” with your parents, this likely created some confusion, anxiety or both for you.  If you are willing to reflect honestly, take some time to think about how those early experiences shaped your beliefs about money and how you spend, save and give now. We will likely want to be much more conscious and deliberate with what we teach our children.

We want our children to be comfortable coming to us when they have questions about the world, whether that be about relationships, academics, money or otherwise. To forge that trusted relationship with them, we need to reciprocate and show them that we trust them as well.

You don’t need to whip out a pay stub on day one, but start the dialogue and stay open to answering their questions honestly. A stronger relationship with your child will be your reward.

Keep Learning, Together

I would also want to encourage all of us to brush up on our knowledge of personal finance. Also, as we know, our children will do what we do, and not what we say. So if your finances are messy (as can happen to all of us, myself included), take the time to get them in order. If your child is old enough to understand what you are doing, add them in some of those discussions. If you commit to paying down some debt, include your child in those discussions. Let them see that you are not perfect, but model how to set goals and work towards them.   They will act as your accountability partner. And it is powerful for them to see their role models (you) working towards your goals.

MyDoh Prepaid Debit Review [2022]

Children using MyDoh Prepaid Debit Cards

MyDoh Review [2022]: Is This Debit Card Right for Your Kids?

MyDoh Review [2022]: Is This Debit Card Right for Your Kids?

MyDoh Prepaid Debit Cards is a new tool on the Canadian market, designed to help children learn more about money. This card claims to help your kids: “Learn, Earn and Spend. Smart.”

Financial literacy is a critical life skill that children need to develop. It will be something that they will use throughout their lives to help them achieve their goals.

Below is a MyDoh Prepaid Debit review to help you see if it might work for your family.

What is MyDoh?

It is a prepaid debit card and accompanying app that provides banking to children and teenagers between 6 and 18. Launched in June 2020 by Faria Rahman and Gaurav Kapoor, MyDoh was part of the Startup arm of Royal Bank of Canada, RBC Ventures. RBC Canada issues the MyDoh Card, on the Visa platform.MyDoh Prepaid Debit Cards

MyDoh was designed to help young people build financial literacy competency by providing them with the opportunity to practice using real money and make real-life spending decisions with the support of their parents.

How does the MyDoh Prepaid Debit work?

The debit card works just like other debit cards – but for children to use.  The card is funded via the MyDoh App. Parents can add money to the card manually or set up automatic transfers. Parents can assign and pay for weekly chores or “tasks” or make weekly transfers as an allowance. Once the card is funded, kids have access to the money.

Both parents and children have access to the App,  but they see different information. For example, children see how to “earn” via their task list, balance, and past transactions. They will also have access to “play.” Play is an educational space where financial literacy lessons are delivered with short trivia-like messages along with little quizzes.

The parental view in the app lets you see what is happening in your child’s account. This allows you to monitor balances and purchases. Parents can also assign tasks, set up automatic transfers, pay for chores or make manual transfers to fund the child’s account. Parents will also see how their child is doing on the Play trivia.

MyDoh Prepaid Debit Cards are issued by Royal Bank of Canada and powered by Visa, but when contacted,  they confirmed that money stored in MyDoh accounts are not secured by the Canadian Deposit Insurance Corporation (CDIC). The CDIC insures eligible deposits up to $100,000. This means if something were to happen to the company or the card, the money deposited in your MyDoh account may be at risk. But given that RBC, Canada’s biggest bank, and Visa are part of the program, that risk is likely very low.

What do I like about MyDoh?

Practical Education: Allowing children to access a prepaid debit card and an app to monitor and review their transactions gives them a chance to practice using money in real-world scenarios. By partnering with Visa, MyDoh also allows children to participate in the online economy.Baby playing with MyDoh Prepaid Debit Cards

Easy Money Management: The app is easy for both parent and child to use. It gives children an early introduction to online/app-based money management, while also allowing parents oversite and an easy-to-use tool to pay for chores and allowances.

Parental Support: Since the app allows parents to oversee what children are doing with their money, it allows parents to help children reach their financial goals and build good money habits. 

What could MyDoh improve?

Saving Account: The are no accompanying savings accounts linked to the MyDoh account. A child will not fully understand money management without a sound understanding of saving. Moreover, by only focusing on earning and spending, the App and card short changes the learning opportunities and maybe even gives a lopsided view of managing money. A savings account would allow for more goal setting, assist with delayed gratification and help children understand how to manage multiple accounts.

Flexibility: During my MyDoh Prepaid Debit review, it came to my attention that some vendors are deemed unsafe, and purchases from these vendors are blocked by the MyDoh prepaid debit cards. There is no pre-published list of restricted vendors, and the app does not allow parents to override the blocked list. MyDoh claims it blocks unsafe merchants, such as alcohol, but  By limiting what children can use their money on, MyDoh may prevent children from having the autonomy needed to fully practice the money management skills they are trying to obtain.

Monthly Fee: There is a monthly fee for using MyDoh. Having insight into your child’s spending and providing educational content is valuable. However, there are bank accounts available that will allow children to practice spending and saving, with parents having access to the banking app or online banking that would have zero fees. The fee is $2.99/month for RBC account holders and $4.99/month for non-RBC account holders.

Interest: MyDoh accounts do not earn interest. And there is not a parent-paid interest option. Understanding interest is another critical part of money management and banking. Including, at a minimum, parent-paid interest would significantly increase the effectiveness of MyDoh as a learning tool.

MyDoh Prepaid Debit Card BillboardFAQs about MyDoh

How do I fund my child’s card?

You transfer money from your RBC account to your MyDoh account if you are with RBC.

If you are not an RBC account holder, you request money via Interac. From the app, you complete an Interac request. MyDoh will email the request to you, and you can use your online bank to fulfill the Interac request.

Is there a minimum age for MyDoh?

MyDoh is for six years old to 18 years old.

Are there limits on the prepaid debit card?

Yes, many. The maximum balance is $999.99.

Max purchases/day 10 or 30/week or 100/month.

Since there is no PIN for the card, retailers may limit the purchase amounts to less than $100.

Is the debit card accepted everywhere?

No, MyDoh restricts card use at some retailers.

Does the App work with more than one child?

Yes, you can add up to five kids between the ages of 6-18 years old.

Does MyDoh work with ApplePay, Google Pay Or Samsung Pay?

MyDoh works with ApplePay, but Apple pay requires children to be 13 years or older. It does not work with the other digital wallets.

How to get started with MyDoh Prepaid Debit?

To create a MyDoh account, you will need the following: 

MyDoh Welcome Letter

  • Email address for you 
  • Email address for your child 
  • If you are not with RBC, you will need a government ID
  • If you are with RBC, you can sign in using your online banking information

Once you have that information on hand, you will need to download the MyDoh App from your App Store and follow the prompts. If you would like to receive a bonus of $10 when you sign up, you can use this affiliate link.

MyDoh Prepaid Debit Review – The bottom line

After conducting my MyDoh Prepaid Debit review, I think if you are a parent who would like to help your kids learn more about managing money, the MyDoh card may be a helpful tool. The “Play” function provided lots of fun and informative resources. The smart card and app combo allow parents and children to see what kids are doing with their money.

That said, MyDoh has some downsides. The lack of flexibility with where children can use the card, and no interest payments, to name a few. I would like to see the addition of a savings account to help children get a more fulsome banking experience. 

Parents could seek out no-fee bank accounts for children and avoid all the fees. This would allow them to use both a chequing and a savings account. Although with those accounts, even if opened jointly, you may not have the same level of oversite as you receive with MyDoh. 

MyDoh is only a few years old. I am confident they will likely continue to improve the App and debit card to make it more valuable for parents and children. 

Interested in giving MyDoh a try?  Use this affiliate link and you and I will receive a $10 bonus when you sign up.

Note: This post contains affiliate links

How are you paid? And why it matters

Having early exposure to the workforce is essential to understanding different career paths and the many different ways children will be able to earn once they are adults. That includes understanding how you are paid right now. Talking to your kids about money by exposing them to your work will pay huge dividends.

Why is it essential to have an understanding of different payment methods? We can sometimes get myopic in our thinking. We work and earn money, and it is easy to forget about all the other ways people work to earn their living. To earn a living, we need to add value by offering our skills+effort+time to make money from working. What is less obvious is that there are many ways to combine and emphasize each element.

What is the Difference?

Is there a difference between how a psychiatrist or a telemarketer earns a living? More specifically, how do the two professions gain access to money? What about a would-be actor versus a software developer. At first glance, you may think the struggling actor and telemarketer are more alike. Same with the developer and layers. But are they? Who has more in common with who?

While the amounts of money that the different professions could earn may differ a lot, the way they make money is very much the same.
Let’s take the psychiatrists and telemarketers. These professions track time spent working as part of their trade for money. If the telemarketer puts in overtime, they get a bigger paycheck. That is the same for a psychiatrist who may charge a client by the hour. If the psychiatrist takes on more clients and put in more hours, they can get more money. Yes, their hourly rates are vastly different, but they both need to work more hours to get more pay. Depending on their skills and the going hourly rate, they both have an upper limit on their income based on the number of hours they can work in a given day.

Now let’s look at the other two professions; the actor and a developer who owns what they produce. They both work on a project basis. They may get paid to work on the project. It is also possible that they don’t get paid to complete the project. They both get paid based on how well the project is received. The more value the project offers, the more money it can potentially make. They take on more risk upfront but can earn money if the project is successful.

Paradigm Shifting

Consider how technology disrupters use their innovations to change the payment paradigm. For example, rather than renting movies a la carte, Netflix gave us a subscription. Rather than seeking roommates or long-term tenants, we can rent rooms Air B&B style. Likewise, exposing our children to work can help to change how they think about being paid.

When opportunities arise for our first jobs or when we talk to our children about working, don’t forget to break down how we get paid. For example, when your kids are negotiating their first jobs, ask them if they will be asking for a lump sum payment once the driveway is shovelled or are they going to ask for an hourly rate. Should they be paid per walk of the dog, or is it a weekly subscription? Is that babysitting rate by the hour, and does that rate go up based on the number of kids?

That early exposure to the workforce and payment methods will open up your child’s mind to the opportunities ahead of them. You can encourage that by sharing your work experiences with them, helping them see all the different ways they can combine skills+effort+time with earning a living.

The Thing About Teaching Financial Literacy

I hear you out there. “Teaching financial literacy is a drag.” And it can be. Like most, you probably think about being in a math classroom with a teacher droning on. Or maybe when you hear the word “teaching,” you have flashbacks of notebooks, textbooks, and tests.

While all of those can be part of the learning process, they are far from the only ways we can teach. I would argue they are not all that effective when teaching financial literacy. Especially not for your children.

There are many ways to teach, but the method I want you to focus on is storytelling. If you have spent any time reading my articles, you have seen some of my stories. From outsourcing my paper route to plunging myself into credit debt, I have endless stories to share about managing and mismanaging my finances. I tell my stories to show you where I went wrong and how I got back on the right track. I hope it is easy for you to see yourself in my stories of using credit cards to finance nights out. Or stories about not sticking to a budget when I knew I had no more money coming in and endless bills that don’t ever stop.

Share Your Stories

While I hope my stories resonate with you, what I want you to do is to find and tell your stories to your kids. Your stories will resonate with them. We all have our stories of finical triumphs and pitfalls. Not one of us has done everything right or wrong.

Kids love stories of triumphs. They love to hear how David slew Goliath or when Jack chopped down the bean stock. But to give them the tales of winning, we need to share the parts about our falls and missteps. We often learn the most from the mistakes we make along the way.

So share those stories, and don’t sugar coat them. Give them all the details about overdrafts, debt collectors, or repossessions. Please give them the tales about being laid off, downsized, or deemed “surplus.” We all get knocked down. But we are all still standing. Why? Because we all got back up. Show your kids how you are a fighter and what you have learned from your journey.

Tell them that you contribute to a retirement fund because you don’t have a pension. Let our kids know that you maintain a rainy day fund because you have lost jobs before. Let them know that you won’t buy them that toy because it is not in your budget, and your budget is what makes sure that the bills are paid at the end of the month and keeps you out of debt.

Those stories will resonate with your kids in ways that textbooks never could.

Money In A Digital World? Helping Your Kids Manage

I received a great question from a parent yesterday about something that has been extra challenging since the start of the pandemic. How do we teach our children about money in a digital world?  When so many of our transactions are online, should our kids need to be online to learn about money? This parent brought up the excellent point that during the COVID pandemic, many of us shifted to online purchases. But even before, and definitely after the pandemic, more and more of our buying is going to be online. With so many of our financial transitions being digital, how do we give our children a chance to experience handling money?

If you have read my post on allowances, you will know that I’m a big proponent of avoiding digital options until your child has a firm grasp of saving and spending using cash.Child on phone So, when the pandemic hit, I decided it was an opportunity to test out some of the options to practice using money in a digital world available to me.

We tried using Rooster Money for my nine-year-old son, who has demonstrated an excellent grasp of money management. I did not and would not make this transition with my seven-year-old daughter since she is still getting a handle on saving, but my son has had three years of practice and is doing well.

I won’t lie; the advantages of using apps to manage an is hard to argue. It automatically credits my son’s account with his allowance every week. It allows him to move money from his accounts as quickly as an online banking account.

The drawback to going digital

But, even with all those convinces, it does raise a few problems.

  1.  I require that my son have access to a device. This is not too challenging for me, but it may be for some parents and add to that, I have been battling with the increased screen time due to online learning, so adding another reason for him to be on a device isn’t my favorite.
  2. We have fewer discussions about money. My son can use the app to shift money from his different accounts (spend, save, give), but since it is happening virtually, we have fewer interactions and less dialogue about what he plans to do with his money. This challenge would be a show-stopper for me if my son’s interest in money and money matters were not as deep as they are. So, instead, we find other opportunities to have these discussions. But if he was less interested, I think I would switch back to cash for this reason alone.
  3. When we manage his money via an app and make online purchases, it can feel like I am buying things for him since he does not have his online accounts or credit cards to make purchases. So instead of buying what he wants, he has to use my accounts and credit card and pay me back. This experience is a far cry from when he would go to the store and buy his own stuff. To help overcome this last hurdle, companies are releasing debit cards for kids, and I will dive more into those options in a future article.
So, what is the solution?

I still firmly believe that for younger children to get their first opportunities to interact with money, they should do it at a physical store. There is more to money management than moving money from one account to another. Interacting with service people as they cash you out. The anticipation of a purchase. The feeling of the exchange when you hand over your money to receive your item or service, to name a few.

The sooner we can give our little ones those opportunities to practice those skills, the better. I acknowledge that we are moving to manage more of our money in a digital world. As our kids grow up, they will likely do most of their transactions online, but that doesn’t mean all of their transactions will be online. There is a reason why online stores call it a shopping cart. And have a check-out button. They are a proxy for the real thing. So, let’s give our children a chance to experience the real thing before they move to the virtual.

How does that work in practice?

I know it is not feasible for most people to take their child to a store all the time, but that doesn’t mean you can’t do it once in a while. A solution that worked for my kids was taking them to a physical brick-and-mortar store once a month. That cadence worked for us. They usually needed a few weeks to save up enough money to buy something, and I usually could find time in my schedule to take them to a store once a month. But that may be different for you. I also make sure to switch them back to cash and let them take complete control of the interaction once we are in the store.

In the end, I hope you will do what works best for you. If monthly doesn’t work, maybe you shoot for every two months. The important thing is that you try to give them the opportunity to manage their own money in whatever form works best for you and your family.


The Clever Way I Paid My Nephew’s College Tuition

Years ago, after watching my nieces and nephew on Christmas day get so much stuff that they couldn’t even figure out who gave them what, I started thinking. These kids are lucky. They get so much. But did they need all of this stuff?” No. So what could I give them that would be meaningful.
I told my wife I wanted to stop buying gifts for the kids. Instead, I wanted to pay for their college education. For my four nephews and three nieces, I did not want to give one more gift, not for Christmas, not for birthdays, nothing, not one more gift. Instead, I said each time they had a special moment in their life, let’s put what we would have spent on a present into an education account.

She Wasn’t Always Into It

It took a few years to convince my wife that this was a good idea. But she eventually bought into the concept, and we stopped. Talking about money can be tricky especially when you are talking to kids. We told our nephews and nieces what we planned to do. The little ones didn’t get it. The older ones probably didn’t get it either. Instead of a gift on birthdays, we would print out a statement and send it to them, but until my oldest niece went off to school, I don’t think anyone got what we were trying to do.

We tried to make it super easy for parents, uncles, grandparents and even the kids to contribute. And some did. Grandparents jumped on board and gave what they could.

Don’t get me wrong; this wasn’t all good. There were times we worried our family would see us as the “bad” uncle and aunt. The ones who would show up on Christmas day with our arms swinging, not a gift in sight, but we stuck with it. College is not cheap, and we were determined to make a meaningful gift.

The Results

And this summer, we once again were able to see the results.  We just paid for the first semester of my nephew’s college tuition.  Saving and investing require time. We set up the account for my nephew 7 years ago, and in that time, his account was able to earn $2,000. That is $2,000 more than he would have received in gifts throughout the years. Two grand more that he can pay his college tuition, books, housing or a new laptop. We get to spend this money on him to help him increase his earning power and increase his odds of finding employment. If only we would have started sooner, right?Laptop

The added benefit of this approach it gives my nephews and nieces an early appreciation and front-row seat at seeing how investing works. In addition, they got to experience the power of compound interest at work for them.

I know this is not going to be an opinion for everybody, but if you are in a fortunate position where you have children in your life who do not need gifts from you, I would strongly encourage that you set up a similar account for them. So that you two can pay for their college education.

Here Are Some Options

All my nephews and nieces are in the United States. For each one of them, we set up 529⁠ accounts. I am not a financial advisor, but I can say that those accounts provided the ease of setup, easy methods to contribute, and flexibility that our family needed.

My kids both have Registered Education Save Plan (RESP) accounts. Those accounts have the added benefit of the federal government kicking in a maximum of $7,200 in free money. That’s right; if you put money into a child’s RREP, the federal government will contribute up to 20% of your contribution up to a maximum of $7,2000.

All of this to say that investing is a great tool that you can use to save for retirement, build wealth and reach your finical goals, but it doesn’t need to stop there. You can also use it to set up all of the children in our lives for success.

Too Many Toys? Here’s How You Fix It

A reservation I know a lot of parents have about giving their child an allowance is, “Do we want more stuff coming into the house?” I feel you. Like you, I have stepped on more than enough pieces of lego, never to want to see those vile blocks again. But if we’re going to give our little ones the opportunities to manage their own money, then we also need to provide them with the opportunity to bring new things into the house.

But like with all responsibilities, some limits can be put into place. Here is how you are going to manage the new influx of stuff that is coming in – *a toy equilibrium.

Establish a Toy Equilibrium

Do this before starting the allowance, or after a big toy purge. Establish that your house is now at its maximum amount of toys, the number of toys in the home can go down, but it can not go up. If a new toy is going to be coming into the house, that means a toy of equal size, or parts, or whatever criteria you deem fit for your home, needs to be removed.

Too many toysA toy equilibrium is an excellent way for your child to start prioritizing their belongings too. If they are really in need of that new transformer, Elsa, or whatever the latest thing is, then they should be willing to get rid of that other thing that has been collecting dust.

I, unfortunately, have passed along the hoarding gene to my son. I am a collector. Like me, my son does not like to get rid of anything. All trash could be a crafting item, all toys are special to him, and to give something away is always a great offence to him.  I can relate to that, but at the same time, we have limited space, and he has started to come to terms with that. It is still a fight to get rid of stuff. However, post-shopping, I do have him find items that he no longer uses to add to our giveaway pile, and so far, it has worked well.

Creating a Healthy Relationship with Stuff

With great power comes great responsibility. The ability to buy stuff means your little one needs to be responsible enough not to hoard things.  Saying goodbye to toys creates a healthy relationship between your child and things.  The ownership relationship is a critical part of money management.

Is it hard for you to say goodbye to stuff too?  When you do a toy purge, make sure your little one sees you purging some of your stuff also.  Model the behaviour we want, right?  Have you tried a toy equilibrium in your home?  How did it go?


* I first read about a Toy Equilibrium in Ron Lieber’s book The Opposite of Spoiled: Raising Kids who are Grounded Generous, and Smart About Money

Empower Your Kids With Financial Literacy

Who does most of the talking when you’re at your pediatrician’s office?  More and more data is coming out that advises parents to let their children lead during their doctor’s appointments.  By allowing your child to take a lead role in their health care, you are empowering them.  But why stop with health care?  You can empower your kids by giving them the space to question your spending too.

Question Authority

A generation or two ago, it was unheard of to question a doctor. Doctors would take offence to you questioning their authority. Some still do, but the medical field is starting to see the flaw in this approach. Many medical professionals now see that people need to take on a significant share of the responsibility for their health and well-being. And that can only happen if they feel empowered to find the information. And you can only do that if you can ask your doctor questions.

But empowerment isn’t just for your health and well-being. We need to incorporate that mindset into all facets of our lives. We have to remember what our ultimate goal is when we are raising children. It is often hard to remember that the purpose of parenting isn’t to get them to eat vegetables; it is to teach them about nutrition so that they can make healthy choices. It is not to administer medicine, it is to teach them about health and well-being so they can make the right choices, and feel comfortable asking a doctor question to ensure they stay healthy. And it is not to buy them the necessities. It is to teach them how to manage their resources.  So that they will one day be able to live and support themselves without our help.

Training Adults

We are not raising children. We are training adults. It is a slog, and it is almost impossible not to get bogged down by the hundreds of tasks, and requests, and assignments, and appointments. But all of those are just the tactics. They are not the objective.

If we do our jobs well, in the end, our children will leave us and go off to live fulfilling lives as adults. How they define fulfillment may differ from us, but our goal is to give them the skills necessary to define and achieve that fulfillment. Preparing them for adulthood is why it is essential to empower your kids, give them the tools they need to question authorities. Not to be contrary, but to be curious to seek knowledge from knowledgeable people, and then help them to apply it to better themselves.

Empower via Questions

Concerning finances, don’t feel like you are the only authority they can question. There are aunts and uncles, grandparents, and an assortment of skilled professionals in your networks. Make sure you expose them to those trusted advisors. Build those relationships so that they can have a full breadth of information to empower them for what awaits them.