Me and My Money

When things are darkest there’s still hope...

Posted November 25, 2011
Originally Published June 23, 2010

Q: I have just moved into a women’s shelter with my two kids age two and five. I left an abusive situation. I didn’t work the last two years but I will be starting a job soon. I don’t even know where to start financially. A.H.

A: Why not give your kids $10,000? Would be a great place to start. I just went through this exercise at a women’s shelter in North Bay courtesy of the Community Counseling Centre of Nipissing and all the women saw it as the first step on the road to financial hope.

Assuming you receive the National Child Benefit Supplement and since both your kids were born after December 31, 2003, all you have to do is open a Registered Education Savings Account. You will qualify for the $500 Canada Learning Bond for each child and $100 annually after that, to a maximum of $2,000, for each year you receive the benefit.

If you can scrape together a little less than $10 a week per child ($500 annually) to contribute yourself (think about asking for cash presents from friends and relatives at birthdays, Christmas and other holidays), and if your net family income is less than $39,065, you will receive up to $200 in Canada Educations Savings Grants. After 10 years, at an average interest rate of 4 per cent, your kids will have have more than $10,000 for their education.

You can open an RESP at your bank. Both children must have social insurance numbers which you apply for at any Service Canada office (call 1‑800‑622‑6232 for locations). You will need your birth certificate and theirs.

One caution. If you are filing for, or think you might have to file for bankruptcy, hold off on starting an RESP as it is considered an asset and could be seized and used to pay your debts.



Q: You mentioned a budgeting tool recently, (alisongriffiths.ca) which is a recording spreadsheet. I’ve seen and tried many. What I need is to know what we (two adults, a 19 year old and a dog with two owned cars) SHOULD be spending.

StatsCan tells me what families SPENT in our area. That still doesn't help. It's the SHOULD part I can't seem to find. Patrick

A: A family of three with dog, two cars, a home and both adults commuting to work will have a very different SHOULD than the same family living in the city, with one person working from home and everyone taking public transit. Even in the same community there will be vast differences depending on occupation, health, hobbies and so on.

To find out your SHOULD number fill out one of the spreadsheets, such as the one you mentioned on my website, with your MUSTs, i.e. the mortgage, rent, utilities, offspring expenses such as tuition and other known fixed costs.

Next, add in some savings for retirement and emergencies. That is a must in my books.

Whatever is left over is what you have to spend on your variable costs from groceries to clothes and entertainment. Plug them in and and if the bottom line turns red then you have to starting cutting. Variable costs can be very tough to estimate -- and most people get it wrong -- so I recommend taking three months of bankcredit card statements and using them to average your spending. Don't forget semi-regular expenses like gifts and vacations and annual expenses such as insurance.

And add 5 per cent, at least, to your variable expenses because you will certainly be a little off.

Unless you are already accounting for it, you must also plug in cash withdrawals as an expense. Average all cash withdrawals over the 3 months to get a monthly figure.

Following this path will get you to that SHOULD answer you seek.

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