Charging Your Kids Rent?

A high school friend of mine still lives at home, she’s 28 years old. She works full-time, has a car and only had a small amount of debt from one year of college which she paid off in a few months.

It was no secret that when we graduated high school, if she, same with her brothers, chose not to pursue post secondary education they would have 6 months before they had to start paying rent to live at home.They were expected to work full-time and couldn’t just sit on the butts at home.  I don’t think this is a totally unrealistic request of parents.

Forcing your child to start contributing to the family’s finances is a smart way to teach great money management skills while in the safety of the family home and much less risk than being on their own. Since she started paying rent she was now allowed to have a say in the running of the house. She wanted her own land line in the house (she didn’t have a cell phone at the time) so she sat down with her mom and went over the family budget with her new rent contribution and budgeted in adding a second line to the phone budget. Her mom was a sweet, organized lady who taught her daughter a lot about ‘life skills’ so why is her 28-year-old daughter still at home then?

Never increasing the menial rent and allowing her daughter to stay too close to the security of home has allowed my friend to get much too comfortable.  In her moms eyes, as long as she was paying rent, what my friend did with her money was ‘up to her’ as she had already taught her the skills, it wasn’t moms responsibility to implement them. The end result is my friend being 28 and still living at home. She blows through her money on food, clothes and crap for her ‘bedroom’ that she doesn’t need. I can only imagine what I could accomplish if I lived at home for 10 years after high school only paying $150.00/month.

I have no problem, and actually think it could be a smart move to charge kids rent who are not in post secondary and live at home after high school. Never charging any amount that could interfere with potential goals (if they’re taking time off school to save for travel or save for education etc) but I think by charging rent it teaches responsibility as an adult. Having said this there has to be some guidelines. My friend is still at home because she still pays the same $150.00/month in rent that she did when she was 18.

I understand that mom is now compliant with their living situation but at what point do you force her to gain a life of her own? Something I would have done a long time ago. Mom needs to jack the rent up to a more respectable amount if she’s going to continue to allow her to live there, then maybe my friend will realize she could have a place of her own where she can start a life (of her own!) for the same amount of money. Once she gets this realization in her head, maybe, just maybe, she will start saving for said abode. Who knows? All I know is that I may have a crap load of debt but I wouldn’t trade my life, home, family and independence for anything, especially living with my mom at 28 years old.

Who has, or plans to potentially, charge their children rent after high school? OR Who has paid their parents rent? Opinions please!

{Note: I am not saying all situations are the same. I realize some people stay home for many different reasons, I know people in these sorts of situations. There is no ‘situation’ around said story, my friend is just a financial lazy ass with Momma encouraging it}

Children and Post Secondary: Why We Might Not Pay For All Of It

Knowing the financial mess one can end up in from not having a savings plan for post secondary education first hand, hubby and I opened a RESP for our daughter when she was 5 weeks old. I remember the representative going through the projected education costs for when she’s ready to graduate and was blown away. How can universities justify such an insane inflation?

This week a local news story came out about the rising costs of tuition in Canada. Tuition has increased 5% this year alone. Holy Cow.

At this rate, when baby girl is ready for post secondary, in 18 or so years (should she chose university/undergraduate degree), we’re looking at over $12,000/year. That’s assuming she lives at home and hasn’t factored in books or any other added expenses.

Hubby and I have every intention of continuing regular monthly contributions, plus additional savings when she receives money as gifts and such, but we have no intention of stretching ourselves thin financially for her educational savings. When the time comes and have have more money for saving (vs debt payoff) investing as much money as possible into our own retirement savings is more important than throwing additional money into her RESP.

In a perfect world she gets a part time job when she turns 16 and learns the importance of saving for things that she wants, education included, but despite the finical mess I’m in, I have no problems with student loans and (student) lines of credit. Very rarely in life does the opportunity to borrow at such low interest rates come up, and with proper money management and budgeting skills could be a smart move. I truly believe that if there is some financial responsibility in your education it encourages you to work harder. For this reason if our savings isn’t enough to cover her I’m not going to worry about it. By the time she goes off for school she’s guaranteed to have learned good money management skills-a promise I make for her-and can properly manage a little credit in her name.

I have friends who insist on having enough savings for any and all education their child may pursue, even if they chose something like medicine or dentistry.

Just an FYI this year’s tuition costs for these programs:

Dentistry students paid the highest average undergraduate fees at $16,910. Medical students paid an average of $11,891 and pharmacy students paid $10,297.

Read it on Global News: Global Maritimes | Undergrad tuition up five per cent this year, more than triple inflation

At the 5% inflation we’re looking at almost $41,000/year for dentistry in 18 years…Just sayin’.

Maybe I’m a mean mom, or totally alone on this, but if we’re fortunate enough that our child can get through Medical or Dental school, I’m pretty sure they won’t have much problem paying off the degree, that’s for sure.

For those with children, who are saving for their post secondary education? Who is prepared to pay for 100% of it, regardless of academic pursuits?

 

Budgeting In Items For Work Usage

Hubby’s cell phone bill is an average of $115.00/month that we have to pay. Insane right? If we didn’t pay for the minutes that we do, the bill will get to well over $200.00 (and has many times). Hubby’s phone starts  ringing and beeping like crazy from the time he wakes up until the time he goes to bed at night because of his job. He talks to many people all day in different locations around the province for varying companies. Given that his phone is a necessity for his job, don’t ya think he should be comped for it? 

If he didn’t have the phone/email requirements that he does, his phone bill would be a much more respectable amount (under $50.00/month). This sort  of makes me crazy. There has been ‘talk’ in the past about him getting some compensation for work usage (90% of his cell phone time) but it never comes to fruition. Friends of ours, who are on their phones a whole lot less than hubby is, are comped which adds to my frustrations.

He does gain gas mileage for work out of city which ends up working out to more than we pay for gas (we make money when he goes away from mileage vs reimbursement for gas dollars spent).

For me to work, I (legally) have to pay an annual licensing fee to maintain registration with my provincial regulating body (which gives me my malpractice insurance and registration with the national regulating body). This sets me back $625.00/year. Although it’s income tax deductible I still hate that I have to pay it, in my mind, it should be an expense my employer pays on my behalf, I’m sure he probably benefits from the tax break more than I but it’s not something he does, this goes for most of my classmates too.

Who has their job compensate part(s) of their monthly budget items? Am I alone in thinking we shouldn’t be paying for these things?

How We Eat On $300.00/month- My Meal Planning Guide

I’m surprised by how many comments and e-mails I’ve received about how, and what, I eat for $300.00 a month. I’ve always loved cooking and finding recipies that can make inexpensive foods taste great so I will start posting some budget friendly recipes for anyone who is interested.  For now I will give an example of our meal plan/grocery trip.

I don’t worry about breakfast or lunch too much. We eat basic cereal or toast/bacon for breakfast and usually a sandwich/yogurt/fruit for lunch, I only worry about dinners.

I use a list very similar to this meal planner made by Life in Yellow (which you can download for free! so head on over to her site!)

 

Source

If I have meat in the freezer I will usually try and cook around that first. I had some pork loin chops left this week so one meal will include pork. Once I look through the freezer, I go to the weekly sales and see what meat is on sale. This week boneless/skinless chicken was on sale, as was oven roast so this will act as our starting point for meals. I always have ‘side staples’ on hand and buy as we run out  (long grain rice, potatoes (my favorite!), salad ingredients and frozen corn or broccoli). I only buy what I need for the week so if I’m out of rice but don’t include rice as a side for any of my dinners I won’t waste the $4.00 buying it this week if I’m not eating it until next. I don’t like to have money tied up in food.

In terms of chicken specifically, hubby and I share a chicken breast when cooking. I don’t know about where you live, but the size of the chicken breasts(and almost all meat for that matter) at our grocer are more than twice the recommended portion size for meat so 90% of the time I cut it it half. The exception being if we BBQ the breast then we tend to have our ‘own’ although we never finish them and the meat usually ends up in a salad for a lunch next day.

I plan meals and after looking through the cupboards and my recipe book, I only write down what we need (down to every tiny spice), if it’s not on my list I have it at home.

Meal 1: Sweet and Sour Pork Chops (with rice)

Need: 1 can of pineapple tidbits, cornstarch, 1 can of chicken stock 

Meal 2: Spicy Grilled Chicken Sandwiches (with fries)

Need: 1 Chicken breast, 2 buns, fries 

Meal 3: Grilled chicken salad (with garlic bread)

Need: 1 Chicken breast, salad kit, loaf of french bread

Meal 4: Dinner out with family-separate budget from grocery funds.

Meal 5: Greek Chicken Wraps (with my roasted potato)

Need: 1 Chicken breast, tortilla wraps, garlic/sea salt spice grinder

Meal 6: Chicken Divan (with rice)

Need: 2 Chicken breasts, broccoli 

Meal 7: Slow Cooker Roast  (with corn and mashed potato)

Need: Roast, 1 can cream of mushroom soup, bag of frozen corn.

Next I make my list adding the other necessities I need like milk. I also try and estimate the prices so I have a general idea before I go what I expect to spend at each store (I shop multiple stores chasing sales), so my grocery list will look like this:

Store #1:

-1 package B/S chicken (~$10.00)

-Milk ($3.50)

-Cereal ($2.50)

-Bread ($2.50)

-Salad Kit ($2.00)

-Tortilla Wraps ($2.00)

-Buns ($2.00)

-1 box of Kraft Dinner (Canadian staple, I love it!) (.65)

Total: appox $23.00

Store #2:

-3lb Oven Roast ($6.00)

-2 cans of soup ($2.50)

-pineapple ($1.50)

-Box of cornstarch ($3.00)

-French Bread ($1.50)

- Bag of frozen broccoli and corn ($2.00/each)

-Spice grinder($4.00)

-Fries ($3.00)

-Nutella (my weakness so only buy on sale) ($3.00)

-Chips ($2.50)

Total: approx $31.00

Store #3:

-Diet pop ($5.00+bottle depo $1.20)

-5lb bag of apple ($4.00)

-Bananas ($2.00)

-2x Granola bars ($2.00/box)

-Yogurt {This week a local grocer had a huge overstock of yogurt and was selling it for 0.25cents/4pack, Score!}

-Eggos ($2.00)

-Eggs ($2.00)

-Bacon ($4.00)

-Ketchup ($3.00)

Total: approx $22.00

Weekly Total: $83.00

Not included in my grocery money is cat food and cleaning supplies/TP. We budget for the cat food separately and I started setting aside a few dollars each week for TP and cleaning supplies since they’re so sporadic.

So there ya have it, an example of my weekly spending on food. Some weeks are more expensive when I run out of all ”basic” cooking stuff (always at the same time) but that’s usually only once every few weeks for stock ups. I try and keep my weekly spending between $65.00-$85.00.

I’m sure you’re all familiar with Canadian Budget Binder but if you’re not, check out his weekly grocery store challenge to see how other bloggers stick to their budgets!

Are Undergraduate Degrees A Way Of The Past?

I recently read a great post over at The Outlier Model about wanting a job in the science field. I started to reply and quickly realized I was writing a book for a reply so decided to do a post about it instead.

First, head on over and read the above blog post, it’s a fantastic post about the realism behind getting a job in the scientific community (biology mainly but applies to chemistry and physics as well).

I have two university degrees, my first being a BSc in Biology. I really can’t say any education is wasted because it’s not but unfortunately good education isn’t free. If I could turn back time I would never, ever, ever, ever go into a ‘basic’ undergraduate program with a declared major. Nor would I ever recommend a high school student pursue such a route. I did very well in high school, graduating with scholarships and on the principal’s lists (top ranked graduates of the high school in Canada) but at the ripe age of 18 I didn’t know what I wanted in life, I thought I knew but I didn’t. I knew I liked, and was good at, science and of course sciences have more job prospects than arts, or so I was told (I don’t really believe this).

I really don’t think most 17-18yr old high school students really know what they want upon graduation. There is such a pressure to graduate high school and immediately pursue post-secondary education but, especially in today’s economy and the rising cost of tuition, I really don’t think it’s the smartest thing to do. I know a lot of parents fear that if their child takes time off between high school and post-secondary that they might not return to academia or that nothing will become of their child. I have to tell you that some of the most successful people I know were the ones who took a year or two off, traveled, worked and really discovered the person they were- outside of the high school walls. Most people don’t come into themselves until after graduation. Are you the person you were in your senior year? Most likely not.

Choosing your lifelong career path in the hype of hormones and emotional turmoil is not the smartest idea.

Taking time off never even had the chance to enter my mind, I was going to university to study biology and be a science rock star. I knew I wouldn’t pursue biology as a full on career (ie doing a PhD of sorts) but I also didn’t really think I would end up in year 3 of 4 in my undergrad and realize I had essentially wasted 3 years of my academic life pursuing a degree with little to no job prospects. High schools do such a good job at sugar coating university for the ‘smart kids’ that they tend to neglect the important information like, there are NO JOBS. Are high school teachers paid commission from the universities or something?

In my 3rd year I knew something had to change. I was about to graduate with 40k debt and the only job prospects paid slightly better than minimum wage. I went through university with my two best friends. We all graduated with our BSc’s and I was the only one to pursue more education. They both work full time for slightly better than minimum wage, one girl working full time and 2 part time jobs to stay afloat.

I guess the ironic part is that I ended up in substantially more debt to get my career but at the end of the day I know I made the right choice. I went back to university and became a Dental Hygienist. I graduated with my choice of job (although the market is a little saturated now but still work available) and making 3 x what I would have I stopped with my BSc. I love my job and so glad I made the choices I did.

When talking to high school students who I know want to go directly to university I tell them to apply into a program that lands you a job even if it’s not something you think you may want to do because like I said before, you really don’t know what you want at 18. Most programs have similar first year foundation classes regardless of the program so if you don’t like the program after your first year you can chose to then apply into something else but you have the security of knowing you will graduate with a degree that will get you a job should you chose to stay. The undergraduate programs I’m mainly talking about would be engineering, nursing or finance, all of which you can apply into from high school (vs. programs that require at least first year prerequisites to get into).

My sister in law was going to apply to do her basic BSc because she was thinking about pharmacy or nutrition as careers but wasn’t sure. I encouraged her to apply into nursing (something she didn’t think she’d like) and if she didn’t like it, apply to the other 2 programs after her first year  because they both require first year pre-reqs which can be satisfied through nursing (1st year bio, chem, math etc.). That conversation took place 7 years ago, she’s now a successful OR nurse and loves it. She has job security with amazing benefits, I’m so glad for her.

I don’t want to sound like I’m bagging on all undergrad programs, on the flip side I know many successful people who have stayed in their fields and done very well but they are few and far between. It sickens me to see such well educated people not be able to use their skills and education. What use to be an honor and necessity for jobs, basic undergraduate degrees are a way of the past I think.

There are still many great university and college programs out there, but try and get into something with more definition and job prospects. Or take time off, figure yourself out and then pursue your career so you don’t end up with a degree for the sake of having a degree and debt because even if your education is paid for, it’s wasted money if you can’t get a job.

How Losing $1500 in Monthly Income Changed Us For The Better

I’m currently on maternity leave. In Canada, through the Employment Insurance program (EI), you’re entitled to maternity and parental leave for a combined 52 weeks at the rate of 55% of your gross income to a maximum of $457.00/week. Some employers then give you top-up bringing you to 75-100% of your income, so for some, being on mat leave has little to no financial change. Not so much for us.

I work as a Dental Hygienist for a family practice. The dentist doesn’t provide top-up, one of the downsides of private industry. There are only a few employees and he needs to pay someone to fill my position while I’m off.

On EI I’m receiving $838.00 every two weeks. Pre-baby my net bi-weekly income was around $1500-1600 every 2 weeks (I’m paid hourly so it varies a little depending on my patients). That’s about $1500 a month in lost income. My question is, how the eff did we ever have money problems?

I’m so mad at myself when I think about how much money we were wasting rather than getting serious about our debt. It took us having a baby to really get serious about our budget and paying debt off. We always paid the minimum requirements but when I think about, what I now know we’re capable of, it sickens me.

Where the money was going…

-In all honesty we were probably spending $500/month in groceries throwing anything and everything in the cart when we went…for two people! Now we spend about $300/month and don’t want for much, we’re just much better at planning.

-Bank Fees we were spending between $30-50/month on bank fees. Since switching to PC we pay nothing. It’s great and we’re super happy with them.

-Eating out. This was huge…between hubby and I we were probably spending $300/month in lunch and dinners out. Mostly lunches when we, again, didn’t plan and would end up eating out at work. I’ve always cooked most all our dinners, we’d usually just have one dinner out-usually pizza or something when I didn’t feel like cooking Friday night after an exhausting week of work and long commutes. Now we budget for one meal out per week and we’ve been pretty good about sticking with it.

-Hobbies/Life/House. We have never been big shoppers/spenders on ourselves for clothes etc but I’d go to Michaels/Home Depot and drop some cash for my newest craft/DIY project. Hubby and I both love tinkering with house stuff and playing with tools. Not that I would consider this money wasted per se, we just cut it out entirely when I went off work.

How we’re managing…

-Given our huge debt load losing the $1500/month was really hurting us. Our minimum monthly debt payments alone were about $1500. A huge help was hubby getting a very generous and much needed raise, it was great timing.

-Starting the DMP and getting serious about budgeting and honestly, growing up when it comes to our spending habits. We now think about every dollar we spend. We were never really crazy racking up credit cards or spending beyond our means we just didn’t allocate the funds properly or responsibly.

-Paying interest only for my student loans. Of my debt, most of it is in the form of student lines of credit which offer no relief should you lose your job/mat leave etc. For government issued student loans, in Canada at least, you can apply for interest relief where the government makes payments on your behalf for a period of time, I didn’t qualify for this because I made too much money last year and they don’t take current financial situation (me being on mat leave) into consideration. I am however making interest only payments for the current time saving me about $180/month.

When I go back to work…

I will be working four instead of five days a week so I can be home with baby an extra day. I’d love to say me being home would save us money with the cost of childcare but it won’t. Daycare shouldn’t cost us more than $30-35/day and after taxes etc I bring home just over $160.00/day. Not to mention we simply couldn’t live off hubby’s income alone. I love my job and can’t wait to get back to seeing my patients and the routine work gives me but I also hate the idea of her being in daycare without me. We’re hoping hubby can work from home one day/week so she really only needs daycare 3days/week. Finding part-time care is a challenge though…

On top of the childcare expense we need to start buying bus passes for me which set us back about $80.00/month we only have the one vehicle and can’t justify the money for a second one when it would only be for me to drive to and from work which would cost probably $200/month in gas and another $200/month to park the stupid thing for the 8 hours I’m at work, no thanks. Public transportation is fine for me.

I do struggle slightly with giving up my one day/week. I desperately want to be home with baby girl. My mom worked so much when we were kids I hardly saw her and I knew when I had a family I would be home more and involved in her life more. A huge reason behind my career choice is that dentistry is usually a M-F, 9-5 type of job, important when it comes to family life. When I think about the extra debt I could pay off with me working that day though it kills me a little. In the end though I think she’ll only be young once and our parental influence is probably most important now. Once she’s in school full time and not care so much about her parents maybe I’ll go back 5 days…we’ll see!

When I started my mat leave and realized just how tough things were going to be we were panicked but in the end it was probably one of the best things that ever happened to us. It was the kick in the ass we really needed.