Category Archives: financial planning

Beer, cars, and mortgages? Super Bowl ads go financial this year

At least six financial brands have purchased air time for the television spectacle that attracts more than 100 million viewers, aiming to establish a place among more mainstream institutions by promising easy and convenient ways to manage your money. The Super Bowl featured just two financial-services ads last year and three in 2014.

Americans’ attitude about personal finance has undergone a shift since the global financial crisis of 2008, with more people — especially millennials — now favoring online platforms and digital wallets.

“The financial world is changing very quickly, and as a result the Super Bowl becomes a good platform to get ahead of the change,” said Tim Calkins, professor of marketing at Northwestern University’s Kellogg School of Management and creator of the school’s annual Super Bowl Advertising Review.

For the first time, PayPal Holdings Inc., SunTrust Banks Inc., Quicken Loans Inc. and Social Finance Inc., also known as SoFi, have all bought ads during the Super Bowl, which will air on CBS Feb. 7. A 30-second spot costs $5 million. TurboTax is returning for its third consecutive year, and its parent company, Intuit Inc., will make its second showing.

The theme is optimism. Consumer spending grew last year by the most since 2005, and purchases of new U.S. homes surged in December to the highest level in 10 months, closing out the best year for housing since 2007, according to the U.S. Commerce Department.Intuit Inc.:

YouTube: Death Wish Coffee Company Big Game Commercial: Storm’s a-Brewin’

Intuit Inc.’s commercial features a small business that uses its QuickBooks accounting software. Death Wish Coffee Co., based in Round Lake, New York, won the ad spot after a nationwide contest that began last year.Quicken Loans Inc.:

YouTube: #RocketMortgage Super Bowl Ad: What We Were Thinking | Quicken Loans

Quicken Loans makes its Super Bowl premiere with a spot for its new product, Rocket Mortgage, which allows users to apply for a home loan online or via their mobile phone. The company said it will couple its ad, “What We Were Thinking,” with an online sweepstakes and social-media push.SunTrust Banks Inc.:

YouTube: Super Bowl Commercials 2016 | :30 Hold Your Breath | SunTrust onUp Movement

SunTrust said it hopes its first Super Bowl ad, “Hold Your Breath,” will start an ongoing nationwide movement promoting personal financial health. The campaign directs viewers to a website,, for financial tips and tools.TurboTax:

YouTube: TurboTax 2016 Big Game Teaser Commercial “Someone Else” (Official :60) TV Ad

TurboTax returns for its third consecutive Super Bowl appearance with an ad campaign demonstrating its online tax- filing software. A preview for its spot, “Someone Else,” features James Lipton, host of “Inside the Actors Studio,” being told he won’t star in a commercial for TurboTax.PayPal Holdings Inc.:

San Jose, California-based PayPal will take advantage of the game being hosted in nearby Santa Clara to air its first- ever Super Bowl ad. The company said its ad will showcase the future of money as the world shifts toward digital wallets and mobile money management.Social Finance Inc.:

YouTube: Some People Are Great (and Some Are Not)

SoFi began in 2011 as an online-lending platform for working professionals. It now hopes to showcase its financial products on a national stage. Its ad, “Great Loans for Great People,” will be its first Super Bowl spot.

Source: 05 Feb 2016

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What happens to Aeroplan and other reward program points when you die?


Aeroplan is “capitalizing on someone’s grief” by charging a fee to transfer points from a deceased member’s account, says the family member of a woman who died leaving 250,000 Aeroplan points behind.

“It seemed so callous. It seemed really insensitive. And it seemed really unnecessary,” says Kathryn Kwasnica of Victoria after finding out how much it would cost to transfer to her father the 250,000 points accumulated by her late stepmother.

But Aeroplan says it’s a “small” fee and that a second option allows users to avoid paying that charge altogether.

And even though the fees can be significant and travel booking potentially restrictive, compared with some other loyalty programs, Aeroplan has one of the better policies for dealing with points in the account of someone who has died.

Kwasnica’s stepmother, Linda Stewart, started feeling ill about a year ago, but it wasn’t until last summer that she was diagnosed with mesothelioma, an aggressive and deadly form of cancer.


It’s in the fine print. (CBC)

“Six months later she was dead,” says Kwasnica. Stewart was 68 when she died on Jan. 7.

Kwasnica, acting on behalf of her grieving father, Stewart’s husband, called Aeroplan to find out what to do about Stewart’s Aeroplan points.

She says she was told, in the event one of its members dies, Aeroplan charges a fee of $30 plus one cent per point to transfer the balance to a surviving family member. In Kwasnica’s case, because her stepmother had about 250,000 points, the fee would have amounted to about $2,530.  

“That seemed crazy for a data transfer,” says Kwasnica.

Aeroplan defends itself

“My father passed away a year ago, so I completely empathize with members who are going through what they’re going through,” says John Boynton, Aeroplan’s chief marketing officer.

“But we are always trying to balance shareholders and members, so there are certain costs that we have to recuperate.”

For a flat $30 fee, Aeroplan also offers the option to transfer those points to a newly created estate account, which can be used by surviving family members. But Kwasnica says she was told by the person she contacted at Aeroplan that the points in the estate account must be used in their entirety within one year.

Many Aeroplan trips need to be booked at least a year in advance, and Kwasnica understood that to mean her father would have had to make travel reservations practically while planning his wife’s funeral.

“Who wants to travel right after the love of their life dies and you’ve had the worst year of your life?”

But Boynton says that’s not actually the case.

“A year is how much [time] you have to do something with them. But you can also book an Air Canada ticket up to a year in advance too, so that’s two years. And if that’s too soon for you, you can also buy an Air Canada gift certificate, which doesn’t have an expiry, or a retail gift certificate as well.”

However, redeeming Aeroplan points for a gift certificate does not always offer the best value compared with, for example, redeeming those points for an international flight in business class.

Maximizing revenue

Patrick Sojka of the website Rewards Canada says transferring points is not a large expense for a loyalty program.

“Honestly, [the fee], it’s money-making,” he says.

“Ninety per cent of all programs worldwide charge you a fee to transfer points and miles to somebody else [in the event a member dies].”

In Sojka’s view, the fee is about maximizing revenue. “The fact [is] that the miles on those accounts are a liability. The sooner they can get them off the books, the better,” he says.

High cost of dying

Compared with Aeroplan, other loyalty programs have terms and conditions surrounding death that are even more expensive and draconian.

Air Miles used to allow the surviving family member to merge an account with that of the deceased at no charge.

But about four years ago, Air Miles changed its policy and now charges a fee of 15 cents per mile.

Sojka estimates the Air Miles fee is about 50 per cent higher than Aeroplan’s.

Other loyalty programs don’t even offer the option to transfer points in the event of a death.

According to the terms and conditions for Shoppers Drug Mart’s popular Optimum points program, “Upon the death of a Shoppers Optimum Member, the member’s account will be closed and any Shoppers Optimum Points in the account will be forfeited.”

Better not to tell?

But there may be ways around this.

In March 2013, Delta Airlines changed its policy, declaring SkyMiles would no longer be transferable upon death.

As a result, travel writers, bloggers, and travel hackers started advising SkyMiles members not to notify the program of a death.

“It’s a grey area. But you don’t let the program know that that person’s passed away,” says Sojka, who also advises this.

“What you do is ensure that everybody has your log-in and passwords and then you can use those miles. Because when you book rewards flights, they don’t have to be booked for yourself, they can be booked for anybody, essentially. You can go in and book points for yourself, your family members, you name it, using those points.”

It’s not clear if companies will crack down on this apparent loophole, but Sojka says he hasn’t heard of any repercussions from taking this route.

Now that they know about it, Kathryn Kwasnica says her family will probably go with the gift certificate option for her stepmother’s Aeroplan points.

“I think my dad would probably be into that. Because I think for him, the thought of travelling right now is just disturbing.”


Source: By Aaron Saltzman, CBC News Posted: Jan 27, 2016 

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Closing costs more than homebuyers often expect

Some buyers may not consider the extra costs of a home beyond its purchase price.

November is national Financial Literacy Month. The goal is to protect and educate consumers about financial services and this year’s theme is Financial Literacy Across Generations. This is the third in a series of Ask Joe columns that will touch on real estate decisions buyers and sellers face at different times in their life.


I’m buying my first home. What are some of the costs I should plan for, besides the purchase price?

Chances are you’ll have run the numbers to determine what you can afford by way of mortgage amount and payments. But

Some first-time homebuyers may overlook the fact that the price paid for a home is just one of its many costs. That’s why it’s so important to understand the full cost of buying a property.

It’s useful to separate the additional expenses into three categories: pre-closing costs, closing costs and after-closing costs.

A home inspection is the most widely recognized pre-closing cost. It may be seen as an optional expense but it’s also a smart one is because a qualified home inspector, engineer or contractor can identify underlying problems with a home’s major systems, like heating and electrical. If you’re thinking of saving some money by skipping an inspection, ask yourself, “Can I afford to learn about major, costly problems after I take possession?” If you’re buying in a rural area, you should also have the septic system inspected and water testing conducted for the good of your health.


Your lender may require, as a condition of financing, that you pay for an appraisal or survey of the property to ensure the home’s value matches its sale price.

Closing costs typically make up the bulk of the additional expenses. In Ontario, a land transfer tax is up to 2 per cent of the purchase price. In Toronto, an additional tax of up to 2 per cent applies. As a first-time buyer, you should talk with your real estate agent about whether you are eligible for a refund of the land transfer tax.

Legal fees will need to be paid to handle the documents and contracts involved in the purchase of a home. Your lawyer will conduct a title search on the home to ensure the seller can actually sell the property and that there are no liens against it. They will also register the deed and mortgage for you.


You may also need to refund the seller for pre-paid expenses — property taxes, maintenance fees, utilities, hot water heater rental fees.


Three different insurance policies round out the closing expenses. You’ll need mortgage insurance if your down payment is less than 20 per cent of the sale price. You’ll need home insurance. And title insurance will protect you against title fraud, errors in surveys and encroachment issues with neighbours.


After-closing costs include moving expenses. Some gas, hydro and water companies charge a hook-up fee and you’ll need to pay if you want to forward your mail from your old address.


Then you’ll need to factor in what you want to do with the dated kitchen and broken fence. If you want to renovate or take care of some repairs identified during the home inspection, it will add to your costs. A fresh coat of paint, some window coverings, or perhaps a shiny new fridge and stove also add up. Understanding the full cost of buying a home will help to budget for these final touches. The latest edition of RECO’s consumer newsletter, RECOnnect, has a useful overview of these costs. You can find it on the consumer side of RECO’s website,, under ‘Publications and Resources’.

Source:  Special to the Star, Published on Fri Nov 15 2013
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6 pieces of advice from Canada’s finance minister: Mayers

Among Finance minister Joe Oliver's    money management tips:keeping an eye on the big picture and understanding that risk is inevitable.

As Canada’s finance minister, Joe Oliver has his hands full. Our economy is fragile and so is our mood. We escaped the worst of the 2008 global financial collapse, but now events outside our borders are rattling our confidence.

In a year and a half in office, the Toronto MP for Eglinton-Lawrence has made a lot of changes that affect our personal finances. He has doubled the tax-free savings account (TFSA) limit to $10,000 a year, enriched child benefit tax breaks, introduced income splitting for single-income families and relaxed the rules that govern registered retirement income funds (RRIFs).

Oliver is a native of Montreal where he earned an arts and civil law degree at McGill University. He later added an MBA from Harvard University and before entering federal politics in 2011 had a long career on Bay St. in investment banking.

It’s too late to give advice to his two adult sons in their 40s, and two stepsons in their 20s and 30s, about how to manage their financial affairs. But Oliver, 75,has an 8-year-old grandson and it’s never too early to get going. I sat down with Oliver recently and asked for his perspective on family finances.

His main message is that life-long learning is important, especially about money matters. Every financial decision, whether it’s buying a house or investing in stocks, has a risk. And as the complexity of decisions increases, broadening your financial education helps you to better understand those risks.

“Be responsible, be strategic and understand that risks are inevitable,” Oliver said.

And be sure you take advantage of the tax breaks Ottawa offers for Tax-Free Savings Accounts (TFSAs), Registered Retirement Savings Plans (RRSPs) and Registered Education Savings Plans (RESPs).

Here’s what else he said:

1. Live below your means: “My father was a dentist and my mother was a teacher. They didn’t have expertise in the markets, but they spent less than they made. That’s how they lived. My dad served in the army and bought his first car when he was 40. He lived a modest life and taught by example. So I never put myself in a position of financial risk.”

2. Keep learning: “Get the best investor education you can. It should be a life-long activity. It doesn’t mean you need to be an expert, but more knowledge is a good thing if only to be sensible about what to ask and who to ask for advice.”

3. Everything involves risk: “You have to take a sensible view of risk and reward, not put everything into real estate or the stock market. Not betting the farm on decisions . . . You have to decide how much is appropriate for you. It sounds vague, but it’s relevant to a period of rapid change and less security.”

4. Be flexible in your outlook: “There are risks that flow from enormous change, so think strategically in terms of your career and how to save and invest. Look at the alternatives (critically).

“My generation got a job and expected to stay in it for life. That’s not a typical career path now. It’s harder for kids to find work and employment isn’t necessarily permanent . . . What does that mean for education? Humanities teach you how to think. I got an arts degree and it stood me in good stead. It’s enriching and enabled me to see things in a broad way. Later I got an MBA, the trade.”

5. Start saving early: “Eleven million Canadians contribute to a TFSA. It’s marvelously flexible, which is why so many people use it. It’s a great way to save for a down payment for a house, for the kids education, or for retirement.

“RRSPs are designed for retirement and while retirement savings is not what young people think about, it does provide a real advantage. The power of compounding is pretty powerful even at low interest rates.”

Someone in their 20s or 30s “may be thinking about getting married and their first big financial decision would be a house. So they would want to save for a down payment. That would favour a TFSA. If there was more money available, the RRSP. If you can afford it, do both.”

6. Learn from your mistakes: “One needs to take chances, but not be reckless . . . I bought my first home in 1973 while I was paying off my student debt. I was married and we’d had our first child. I didn’t have any cash.

“The Toronto real estate market was taking off. We’d looked at a house that was $55,000 and six months later was $65,000. I was bent on buying it, but didn’t have any money. I went to the main Royal Bank branch downtown to get a loan and the manager was Allan Taylor, who later became chairman of the bank.

“He said: ‘What do you want it for?’ I told him. He said: ‘How much do you want to pay?’ I said: ‘$65,000.’ He said: ‘How much do you want to borrow?’ I said: ‘$65,000.’

I took out a floating-rate loan because I did not have the money for a down payment and bought the house. Within six months rates, started skyrocketing and my monthly payment rose with it. So, I turned the loan into a mortgage.

“So, it wasn’t a good financial decision, though it was a superb real estate decision.

“I’m not suggesting that people borrow the full amount of their homes, but it was precisely the right thing to do for me. Real estate prices were rising and I was two years into a career where I was fortunate to see my income rise. So it became affordable. It comes back to risk. I took a chance and it was right. What’s critical is that it was affordable for me. It may have been uncomfortable, but it was affordable.”

Source: Toronto Star Personal Finance Editor, Published on Wed Sep 16 2015

Adam Mayers writes about investing and personal finance on Tuesdays and Thursdays. Reach him at .

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Teach kids about money early on for fewer debt problems later on.

create a budget with your kids

The times they are a changing – in a good way. Recent studies show that an increasing number of kids in Canada are eager to learn more about how credit cards work, what things cost, and why. They also want to know about how to save money and create budget. That’s a far cry from a generation ago when kids didn’t give much thought to money aside from how much they could spend.

Teaching children to live within their means, set savings goals, and spend wisely is as important to education as any subject supporting life skills.

It’s encouraging to know that financial literacy is growing among kids because the more money smarts they have, the less likely they’ll be to experience debt problems later in life. Truth is, curiosity about money – and openly sharing financial information and knowledge – is healthy for all family members at all times. Teaching children to live within their means, set savings goals, and spend wisely is as important to education as any subject supporting life skills. After all, financial literacy and budget creation affords kids wisdom for practical application every day of their lives.

It’s true Canada still has work to do to get more kids on the financial literacy bandwagon. But the growth trend for more knowledge shows we’re on the right track. At this rate, who knows where we may end up. Imagine if Canada could boast of having the most financially literate kids in the world? It would only add to the country’s current reputation for having one of the best banking systems and soundest economies on the planet.

For parents seeking tools to help teach kids about money, there’s a great book called Money Savvy Kids.

Programs dedicated to smart personal money management and budget creation are now being added to school curricula. So parents continue to play the main role in teaching their kids about subjects such as creating a budget, tracking spending, and taking steps to save in the context of short term, mid-term, and long- term goals.

For parents seeking step-by-step tools to help teach kids about money, there is a great book to explore called Money Savvy Kids, authored by personal finance expert Gordon Pape and his daughter, Deborah Kerbel. The book offers financial lessons applicable to youngsters from age five to 17, with the father-daughter team taking a fun approach to the learning process. As well, the two provide plenty of information about online resources and books for thoughtful parents.

In terms of financial coaching for kids, parents need to practice what they preach because that’s what children absorb most.

You should also check out a great book by Robin Taub called A Parent’s Guide to Raising Money-Smart Kids, published by the Canadian Institute of Chartered Accountants. The book explores why it’s important to help children become financially literate and describes methods for educating children about money.

In terms of financial coaching for kids, parents need to practice what they preach because that’s what children absorb most. Meanwhile, parents have to be aware of their own limitations regarding what they know about money and its many ins and outs. Parents should be confident about their knowledge of personal finance. At the very least, basics relating to budgeting, goal setting, and credit management should be understood by all givers of financial advice.

Beyond these matters, parents can turn themselves into financial wizards by taking advantage of financial literacy pro- grams such as Credit Canada’s Financial Coaching Series. Through the program, parents can become experts in personal financial management. No matter how much or how little you make as a working person, you can create a budget, save, and invest money like a pro – and set a great example for your kids.

Source:  CREDIT CANADA on JULY 29, 2015

Downsize your home with the help of some expert advice

Interview a few real estate reps to learn how experienced they are with properties in your area.

Our children have moved out and we recently retired. Now we’re thinking about moving into a smaller home. Do you have any advice before we put our house up for sale?

Your question is timely: June is Seniors’ Month in Ontario, a time to celebrate the contributions of seniors but also a time to discuss the many life changes coming in the years ahead.

One such change is home ownership. Many people reach a point when owning a family home becomes more than they want — or can manage. And chances are, it has been a while since you’ve been in the housing market.

A lot has changed in the world of real estate over the last several years. Moreover, there seems to be an overwhelming amount of information available on the Internet about selling a home.

So, my first piece of advice to you is to plan ahead with some help and advice from experts before you jump into the market. The Real Estate Council of Ontario (RECO) is a good starting point.

RECO may not have been around when you last bought or sold a home. It is a consumer protection organization that was created by the provincial government in 1997 to enforce the rules and code of ethics for real estate professionals.

Every real estate professional and brokerage in Ontario — currently there are more than 70,000 — must be registered with RECO. You can use RECO’s search tool at the top of RECO’s website ( to search for a salesperson and to verify they are registered and in good standing.

When you’ve made the decision to go ahead and sell your home, it’s a good idea to interview several candidates about their experience in your area and their approach to the selling process. Each one should be able to give you a sense of your home’s value in today’s market and provide advice about how to get the best return on your investment.

And it’s important that you ask questions. Have a candid discussion about your wants versus your needs. Make sure you understand how the sale process will work. If you don’t understand, keep asking questions until you get the answers you need.

Make sure you read and understand all of the paperwork. If anything is unclear, it’s fine to take extra time — and seek additional professional help — before you commit to an agreement. Real estate contracts, including seller representation contracts with a brokerage (often called Listing Agreements), are legally binding, so understanding all the clauses and what impact they will have is important.

An important consideration throughout the process is what downsizing actually means for you. If you’ve been in the home for a long time, even contemplating a sale can be a difficult and emotional experience. Give yourself plenty of time to come to terms with leaving your family home without the pressure of a moving date on the horizon.

There’s no question that selling the family home can be a difficult decision. That’s why it’s smart to start the discussion well in advance of the time decisions actually need to be made. Planning ahead and being informed will go a long way in making this tough task a little easier for you.

Source:  Toronto Star Joseph Richer is registrar of the Real Estate Council of Ontario (RECO). He oversees and enforces all rules governing real estate professionals in Ontario. Email questions to . Find more tips at reco.on.caEND, follow on Twitter @RECOhelpsEND or on YouTube at

70% of Rich Families Lose Their Wealth by the Second Generation

ARRESTED DEVELOPMENT with Jessica Walter and Portia de Rossi

A little honesty might help preserve the family fortune.

When Stephen Lovell used to visit his grandparents as a kid, it was like entering the world of Cole Porter or The Great Gatsby.

People dressed in tuxedos and sipped cocktails. They owned boats, airplanes, a hobby farm. Not to mention a lavish mansion in Ontario, Canada, and a summer home in Southampton, New York.

He estimates that his grandfather, who founded the John Forsyth Shirt Co, had a fortune of at least $70 million in today’s dollars. But through a combination of bad decisions, bad luck, and alcohol dependency, the next generation squandered that money.

“I think about it all the time,” says Lovell, a financial planner in Walnut Creek, California.

Indeed, 70% of wealthy families lose their wealth by the second generation, and a stunning 90% by the third, according to the Williams Group wealth consultancy.

U.S. Trust recently surveyed high-net-worth individuals with more than $3 million in investable assets to find out how they are preparing the next generation for handling significant wealth.

“Looking at the numbers, 78% feel the next generation is not financially responsible enough to handle inheritance,” says Chris Heilmann, U.S. Trust’s chief fiduciary executive.

And 64% admit they have disclosed little to nothing about their wealth to their children.

The survey lists various reasons: People were taught not to talk about money, they worry their children will become lazy and entitled, and they fear the information will leak out.

When I asked financial planners why the wealthy are so poor at passing along money smarts and why second- and third-generation heirs turn out to be so ham-handed, the answers were surprisingly frank.

A sampling: “Most of them have no clue as to the value of money or how to handle it.” “Generation Threes are usually doomed.” “It takes the average recipient of an inheritance 19 days until they buy a new car.”

 Yes, the statistics may be grim. But just because most wealthy families see their fortunes evaporate within a couple of generations does not mean yours will. Some strategies to avoid it:

Talk Early and Often

You may think you are encouraging hard work by not disclosing wealth to your kids, but that really just fosters ignorance.

If you have just never talked about money, get over it, and give your kids a crash course in financial literacy. Many financial institutions, including U.S. Trust, offer specialized learning materials and courses to get heirs up to speed.

That goes for grandkids, too: Instill smart money lessons in them, and you have pushed family wealth forward another 30 or 40 years.

Discuss the Will

If you are ready for true transparency, take it up a notch and bring up the elephant in the room: the will.

“Parents and grandparents should communicate the whats and whys of their will in a group setting, with all their children present, long before the will is read,” says David Mullins, a planner in Richlands, Virginia.

That way, you can hash out any issues as a family beforehand. It is better than after the fact, when the patriarch or matriarch is not around to explain or make adjustments, and things devolve into all-out legal war.

“Trust me, siblings will find out who got what,” says Mullins. “Without proper communication, this can destroy families.”

Create a Roadmap

Almost one-quarter of baby boomers think their kids will not be able to handle wealth properly until the ripe age of 40. And almost half of wealthy individuals over 70 agree.

That is why you should give your heirs a financial roadmap in the form of a family mission statement, advises U.S. Trust. You can lay out what you expect in terms of spending, saving, and giving back, as well as pass along strategies for building wealth.

Stephen Lovell wishes his mother had that kind of roadmap.

“How did my mother blow it?” he says. “She just didn’t know any better. And now we all live with that regret, every day.”

Source: June 17, 2015

A hard look at tough love and financial planning.

Source: Credit Canada

by Laurie Campbell on Thursday, April 9, 2015

Baby boomer parents take note. There’s a time for love, and there’s a time for tough love. That’s my thinking if you are currently footing the bills for able-bodied adult children who remain dependent on you to get by. You might ask, is your support encouraging your kids to become self reliant and make a life of their own, or is it merely cultivating more dependency?

“Tough love can light a fire under the butt of a rumpus room slacker. It can rouse embittered millennials to new possibilities.”

Here I’m reminded of the old saying, the road to hell is paved with good intentions. Truth is, love can sometimes be blind to behaviour that is not in a family’s best financial interest. Tough love, on the other hand, can open eyes to what benefits family finances – and family ties – most. It can light a fire under the butt of a rumpus room slacker. It can rouse jobless, embittered millennials to new explorations and possibilities. It can bring hope to any household.

If as a parent you are spending beyond your means to fulfill the extravagant wants rather than the pressing needs of your still dependent adult children, then you may require a wake up call, not to mention basic financial planning skills. Such spending can not only threaten your own longer-term financial security, it can discourage growth towards self-sufficiency in your offspring – a lose-lose situation.

“We find a couple in their mid 50s who devoted $32,000 of a meek $140,000retirement savings plan to their daughter’s wedding.”

Take a couple of examples of parental largesse as reported by Bloomberg News recently. We find a couple in their mid 50s who devoted $32,000 of a meek $140,000 retirement savings plan to their daughter’s wedding. We learn about another 50-something couple who cashed out $61,000 from their modest $200,000 nest egg to help pay for their daughter and son-in-law’s first home.

At first glance, the generosity seems admirable – how dearly the parents must love their children. But upon close review, the spending is foolish. Is this wedding tab and home payment worth about a quarter or more of mom and dad’s rather limited life savings by Canadian middle class standards?  Moreover, what is the mindset of the children who accepted such gifts given the parents’ financial status?

“Dependent adult children may need reminding that when parents with depleted savings eventually retire, the financial tables can easily turn.”

Are the parents pushovers? Are the kids spoiled? I’d say these are distinct possibilities. The importance of long-term financial planning– especially in relation to mom and dad’s retirement savings – seems to be lost on all parties.

Dependent adult children may need reminding that when overly generous parents eventually retire with depleted savings, the financial tables can easily turn. Mom and dad can become the needy ones, with calls for the children to cover living and health-related expenses that cannot be fully met for want of enough retirement income. This is a real concern in Canada today.

“Don’t abandon your kids. Just be realistic. Help your children within your means, without abandoning your own future.”

Recent studies show that a lot of Canadians are worried about their retirement nest eggs. Almost half of middle class couples believe they will not have the savings they need for their golden years. Many boomer parents believe they will have to continue to work well past retirement age in order to maintain a reasonably comfortable lifestyle.
Maybe it’s time more parents toughened up on spending involving their dependent adult children. I’m not saying abandon your kids. Just abandon overspending and stick to your savings plan. Be realistic about your finances and be firm in your resolve. Help your children only within your means. Above all, give your children the love, encouragement, and instruction they need to work toward independence.