April 20th, 2016 is Talk with our Kids About Money

Be sure to circle April 20th, 2016 on your calendar.  It is  Talk with our Kids About Money Day.

money

This day is set aside to focus on  encouraging and supporting parents, guardians, and teachers to start or continue such talks with youth. Canada’s Task Force on Financial Literacy noted that improving financial literacy was a shared responsibility, that it would be a lifelong process, and that it was important for financial education to be provided in our public schools.

Visit the Talk with our Kids About Money website here.

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8 Tips To Deal With Bank Fees

Do you ever wonder how the big banks continue to make billions of dollars, even in the ratesmost difficult economic times?

While they have made millions in interest from various personal financing tools (i.e., credit cards, loans and mortgages), investing in the markets and holding assets in the form of real estate, they easily generate profits thanks to bank fees. From debit purchases to overdrafts, banks attach fees to various products and services with the objective of making more money annually. Unfortunately, some clients are not aware of the fees that continue to drain their bank accounts.

Below are eight tips that will allow you to reduce the amount of bank fees that are debited from your account and will allow you to save more money on a month basis.

1. Find a better account

If you discover that you cannot afford to pay the fees that come along with your current account, then it is time to find another account and/ or bank. There are banks that offer low or “no-fee” accounts depending on what your needs are and the amount of money you have to deposit. Once you have assessed your needs (in terms of the amount of transactions and savings goals), you can consult the Financial Consumer Agency of Canada’s website where there is an account selection tool. This tool lists the various accounts and banks which you may want to switch to in the hopes of paying less in fees.

2. Reduce the number of transactions

The majority of banks attach fees to the number of the transactions that they perform for clients. If you are big fan of using your debit card for everyday purchases, maybe you should consider going back to using cash. Even though the fees are minimal, they can add up. According to recent reports, all of the Canadian banks are expected to increase their fees on debit purchases made by clients.

3. Reduce trips to bank machines associated with other banks

Banks are well known for their “convenience fee” that they charge individuals for using a bank machine, when the machine belongs to another bank. Although it’s easier and less time-consuming to use any bank with an automatic banking machine, it can be costly. The best way to avoid such costs is to withdraw enough money until you have the chance to get to your own bank. Another option is to open an account at the nearby bank where the fees are affordable.

4. Keep a minimum balance

Not knowing how much money you have in an account can cost you. Some banks can insist that you keep a minimum balance in an account or be faced with paying monthly fees. As a result, you have to keep track of the amount of money in that particular bank or transfer it to a “no-fee” account.

5. .Ask for senior accounts

Turning 60 soon? Some banks offer specific accounts that are free, or available at a reduced fee. However, you have to inquire about them at your bank. Be prepared to prove that you are, or turning 60, in order to be eligible for those accounts.

6. Obtain overdraft protection

Thinking about “insufficient funds” (NSF) charges every time you write a cheque? NSF charges can significantly threaten the amount of cash that you have in the bank on a monthly basis. In order to avoid the heavy fee on a regular basis, consider obtaining overdraft protection. Overdraft protection is a form of insurance that will allow you to pay a small fee in advance to avoid paying a larger NSF charge. Some financial institutions will apply the overdraft charge only in those months when you actually use the overdraft protection that you have invested in.

7. Go online

If you’re able to go online via a laptop, tablet or smart phone, attempt to do your banking online. Instead of going to a bank, why not conduct transactions by yourself.

8. Read your monthly statement

Are you aware of the fees that you pay per month? It is recommended that you examine the statement to see if you have been charged any extra fees and how much. Furthermore, be vigilant in terms of any new fees that you may be able to contest or ask to be waived.

What Should Know About A Personal Line of Credit

When a bank provides a client with a personal line of credit, it does so with the understanding that the funds will be used for various reasons. Some individuals, the money will be used to finance their latest spending spree or be a source of insurance when it is needed. Regardless of how the money will be spent, the bank will always profit from offering the financial product.

Royalty-Free Stock Photography by Rubberball.comAs potential or current user of a personal line of credit, do you know how to best manage it without paying extra fees and interest? Below are 9 basic things that you should know before spending a dollar from the source of financing.

1.    Lending range

Banks have various lending ranges that clients can select from for their needs.   Although clients can apply for a maximum amount of money, banks do have the final say of the amount that will be available.   Using clients’ credit reports and other analysis tools, banks will decide the appropriate lending range to insure that the credit is repaid in a timely fashion.

2.    Interest rates

Interest is charged to clients who select to access money from their line of credit.  Similar to mortgage rates, interest rates can be fixed or variable.   It is best to discuss with a bank representative which option fits your ability to repay the money and not go into further debt.  Usually, interest rates for lines of credit are usually lower than they are for credit cards (even low-rate credit cards), personal loans or other short-term loans.

3.    Fees

When using a personal line of credit, clients must keep in mind the associated fees attached to the source of funds.  To generate more profit, banks may charge an unused line fee, often an annualized percentage fee on the money not withdrawn.  (Ask your bank representative to explain all applicable fees that comes with your line of credit.)

4.    Type of personal line of credit

Personal lines of credit can be classified as either secured or unsecured.   Secured personal lines of credit are backed with your property or investments typically results in a lower interest rate and higher credit limits.   Unsecured lines are not supported by any type of collateral and thus resulting in a higher interest rate.    Banks will allow clients to select which type is best for them given their financial situation.

5.    Repayment options

Unlike a personal loan or a mortgage, clients must repay the money (plus interest) that they have used for the line of credit.   For example, if a bank grants a client a line of credit of $5000 and the client utilizes $2000,   the bank should expect $2000 plus interest to be back in coffers in a pre-determined period of time.  Clients must make at least a minimum payment on their balance every month.

6.    Re-applying

Banks have different policies when it comes to re-applying for a line of credit based on a client’s credit history.  If there are not any issues with client’s credit history, banks will waive the application process and make the lending range available immediately.

7.    Monthly statements

Whether it be by mail or on the web, clients can keep track of the amount of money that is available via the line of credit and how much they owe.

8.    Insurance

In the event that clients die or become disabled, there might be a need for insurance to cover their line of credit.   This maybe the case for clients that have a large unsecured line of credit that have not being paid down in a timely fashion.

9.    Negotiation options

When it comes to obtaining the financial product, everything is negotiable.   Whether it be lending range, interest rate or term, individuals have the power to dictate what they need from a personal line of credit due to the fact there are various financial institutions to obtain the source of credit.    All that this required for a successful negotiation is knowledge of what is available elsewhere and knowing what is required to fit respective needs.

A personal line of credit is an alternative source of money that banks do not offer for free.  It is the client’s responsibility to manage this specific source of funds to ensure that the minimum amount of interest and fees are paid on time.

What is a Mutual Fund?

This is one of our most common questions. This video will briefly explain what a mutual fund is and how it works. We’ll show you how investing in a mutual fund with Credential Asset Management Inc. at Synergy Credit Union can be beneficial for you – in both the short-term and long-term. It’s never too soon or too late to start saving.

Bank Note Counterfeiting: Security Features

Cash is a popular means of payment and that creates opportunities for counterfeiters. Canadian bank notes have security features that are easy to check and hard to counterfeit. However, polymer and paper bank notes are secure only if you check these features. This video helps you verify bank notes, and informs cash handlers how to deal with suspicious notes.

Monnaie Money Financial Literacy Video Contest 2014 Winners

On December 19th, 2014, Monnaie Money announced the winners of the 3rd Annual VC2014Financial Literacy Video Contest. The objective of the contest is to engage youth by providing a platform for them to illustrate their knowledge regarding person financial matters. The following videos were evaluated on:
1 – Originality
2 – Financial literacy message
3 – Overall presentation and relevancy to youth today

1st Place – #NoMoneyMoreProblems by Mags

2nd Place – First Job First Bank Account by JFK High School

3rd Place – Iuliu Pop & Sebastien Philemon

4th Place – Comment être financièrement responsable? By Sarah alias Double XL

5th Place – The Hundred-Dollar Studio By Liam Alexandre and Jeremy Devon

6th Place – Vidéo contest 2014 by CJS

A complete list of videos that were submitted for this year’s contest can be found at the Monnaie Money YouTube Channel and on Vimeo.

On behalf of all contest participants, Monnaie Money would like to thank the following supporting partners:

1st Annual Monnaie Money Financial Literacy Quiz

It is quiz time. Time to see whether you were paying attention to our blog posts FLM_logo_Vert_No_Date_rgbdiscussing financial literacy matters. To take the quiz, you will need a pen or pencil, a promise that you will not cheat by peeking at the answers at the end of the question. Good luck to all.

Q1. Which one of the following is NOT describe a credit union?
a) Members of a credit union are the owners of the financial institution
b) Credit unions offer low interest loans
c) Credit unions only offer sources of credit and low interest loans to its members
d) As compared to regular banks, they are very few credit unions that you walk into to perform regular transactions

A1. c) Credit unions offer a wide range of financial services going beyond credit and low interest loans. Some of the common services to banks include: savings and chequing accounts, online banking, mortgages and financial advice.

Q2. What are the best two ways to avoid paying additional fees when making a withdrawal from your bank account via an automated banking machine?
a) Withdraw the amount of money that you will need for fixed amount of time
b) Use your credit card instead of cash to pay for items
c) Withdraw your money from a machine that only belong to your bank
d) Ask to be exempted from the fees charged by the bank

A2. a) and c) Although all four options are viable to avoid paying additional fees, taking out the money you need for a fixed period and only from your bank’s machine are the best choices. Instead of being charged each time at your bank’s machine, withdraw money that will last you for a fair amount of time.

Q3. The major advantage of using your debit card instead of your credit card when it comes to shopping on a frequent basis:
a) You can spend unlimited amount of money without being charged interest
b) You can be exempt from user fees
c) Debit cards cannot be easily cloned and used by others
d) You can track your spending easier for budget purposes

A3. d) Each time that you select to use your debit card, your bank records when, where and how much money was spent. By accessing your record online or via your monthly statement, you see where your money is going and if you can control your spending.

Q4. Ronald has just received a gift of $1000 from his grandparents. He has an outstanding credit card debt of $200 at 19.99% and has borrowed against his line of credit at the bank where he owes $850 at 17.99%. Before depositing the sum of money, his grandmother insists that the gift should be a contribution to buying a pre-used car for him to drive to work. What is the best option for Ronald to do with his gift?
a) Honour his grandmother’s wishes and buy the car
b) Place $1000 in a high yield savings account
c) Pay off his credit card debt
d) Repay the money he borrowed from the line of credit

Q5. Upon checking your email, you notice that you have received a reoccurring message from your bank indicating that you have $250 waiting to be transferred into your chequing account. To satisfy your curiosity, you decide to open one of the emails where you find a message asking you to visit a website where you need to provide your bank account information to ensure that the money is deposited into your account. What do you do next?
a) Close and delete the email
b) Visit the website and provide the required information to complete the transfer
c) Forward the email to friends and family who use the same bank
d) Report that you are receiving the emails to your bank and the police

A5. d) A bank will never email you to inform you that money is waiting to be transferred into any account.   As a result, you should report to your bank and the police that you are a target of bank fraud.

Q6. Carol has started her career in marketing and earns $40,000 per year. Her plan is to start saving for her retirement; however, she would like to have money available in case of emergencies. Which of the following is the safest and convenient place for her savings?
a) Tax Free Savings Account (TFSA)
b) Mutual Funds
c) Registered Retirement Savings Account (RRSP)
d) At home in a glass jar

A6. a) A TFSA fits the needs of Carol because it allows her money to grow over time in a relatively safe investment where money can be withdrawn at any time without incurring a penalty. Selecting a RRSP restricts her from pulling out any cash unless she wishes to pay tax on income earned on the investment in the account.

Q7. In the event that there is a financial crisis in Canada and all banks fall into bankruptcy, how much of a $250,000 savings account is insured?
a) $0
b) $60,000
c) $100,000
d) $250,000

A7. c) Regardless of how much money that you have in your savings accounts, The Canada Deposit Insurance Corporation, a Canadian federal Crown corporation, insures Canadians’ deposits held at Canadian banks up to $100,000 in case of a bank failure.

Q8. The primary purpose of the Bank of Canada is:
a) To insure that all bank machine are well stocked with money
b) To be last option for Canadians to obtain a loan when other banks do not extent credit and loans
c) To be only issuer of paper money in Canada
d) To offer and insure all mortgages for Canadians

A8. c) As an user of the Canadian banking system, you will never have direct contact with the Bank of Canada.   Some of the bank’s main responsibilities are: issuing paper money in Canada, setting monetary policy and being the central bank for the federal government.

8 Things That Financial Literacy Can Do For You

November is Financial Literacy Month in Canada  Several organizations across the FLM_logo_Vert_No_Date_rgbcountry are holding various events to promote the importance of financial literacy skills.   From contests to workshops, learning the basic money management skills and being aware of threats to one’s wallet in terms of fraud schemes and scams are essential.   Becoming a better money manager is an investment that you can reap the benefits in the short and long term if you are willing to acquire the necessary skills and remaining informed.

Below are 8 results that can be seen when one selects to become financial literate.

1. Know where your money is coming and going

By creating a monthly budget, you can track your cash flow. From your pay cheque or pension benefits to groceries expenses, your budget will tell you the level of surplus or debt that you must manage. This financial literacy skill will assist you in making decisions such as how much you should put aside in a savings account or reducing expenses to avoid going into further debt.

2. Control your spending

Using a credit card to go shopping can be dangerous. Credit cards can prompt you to spend money that may not have in the bank. By being aware of your access to credit and interest rates, you can control your spending knowing the short and long term consequences of going into debt. Instead of using a credit card, you may select to use your debit card or cash to shop.

3. Prepare for your financial future

Do you have plans to buy a house? Would you like to retire comfortably? The financial literacy skill of long term saving is essential. Knowing how much to save per month and types of investment tools that are available to you is a responsibility that must be taken seriously and requires discipline. For young individuals, financial literacy will instruct you to start saving and investing early to benefit from compound interest over a long period time. Middle-age individuals will have the ability to shelter their money from taxes and retired individuals should be able to reduce debt levels and better manage funds given increasing household expenses.

4. Manage your debt

One of the major needs for financial literacy is dealing with debt. From avoiding the use of debt (i.e., credit cards, personal loans, etc.) to understanding interest payments, being able to deal with debt can make life easier from a personal finance point of view.

5. Increase your awareness of potential fraud

Fraud prevention is an aspect of financial literacy. In order to protect yourself from financial fraud, it is wise to be aware of the common and prevailing approaches that fraudsters gain access to your personal and banking information. March is Fraud Prevention Month, when the Competition Bureau of Canada executes their campaign to share tips to avoid fraud of all kinds.

6. Have your money work for you

Want to have your money work for you? If so, then it is time to become more informed on the different types of investment avenues for your needs. By understanding the different options and respective their benefits and pitfalls, you can decide where to put your money to watch it grow over time.

7. How to best use credit

We all have access to credit in different forms such as credit cards, personal loans and mortgages which entails incurring debt. To avoid the difficulties that are linked to going to debt via using credit, it is best to have the skills to know the best situations to use credit and sound strategies to pay back money with the least amount of interest.

8. Understand how banks work

The majority of your money is probably is in a bank; however, do you know how your bank manages your deposits? What type of products and services that you can benefit from to help to your money to grow? By becoming more financial literate, you will be able to compare difference banks in terms of what they offer and decide to move your money to another financial institution to meet your financial goals.

Acquiring the basic financial literacy skills to avoid common money management problems is an ongoing process. Although you can gather as much information as you can from different sources and organizations, it is your responsibility to apply the practical tips to improve your financial situation for the future.

Keep informed on what is shared on Twitter regarding financial literacy, click on the hashtags, “finlit” and “financialliteracy