Three reasons why it has never been more vital to teach teens about money:
1.) It’s getting harder, but not impossible, to afford life events like home buying, raising a family and retirement.
2.) Social media keeps altering the personal finance world by, first, amplifying the fear of missing out, or FOMO, and also by giving a voice to personal finance and investing influencers who range from excellent to misleading and fraudulent.
3.) New channels for buying things keep appearing; social media, smart home devices and wearable devices like smartwatches are some of the latest examples.
In a recent newsletter, I replied to a reader asking for thoughts on what his son’s high school finance club should talk about and then asked for more input from subscribers to this newsletter. My goal was to build a sort of curriculum for parents and teachers that can be used for helping teens learn about money.
The replies I received were excellent – yet another example of how this newsletter thrives on two-way conversation. Here’s a selection of comments, in no particular order:
- What is a credit score, and why does it matter?
- Managing the cost of subscriptions to streaming services
- Understanding how social media can influence people to spend
- The cost of owning a vehicle vs. a car-sharing membership
- Learn how to file a tax return, and the importance of filing a return each year
- An explanation of how interest rates work
- A comparison of employment opportunities and average compensation levels to taxes, apartment rentals and other lifestyle costs
- Donating to causes and associated tax credits
- The benefits of online banks versus traditional brick and mortar banks
- How to travel in a cost-effective way
- How tax-free savings accounts, first home savings accounts and registered retirement savings plans work, and when to use each
- The benefits of learning a trade versus pursuing a college or university education
- Understanding paycheque deductions for Employment Insurance and Canada Pension Plan premiums
- How to spot financial scams, and who to report them to
- The benefits of long-term investing in quality dividend stocks
A lot of suggestions focused on the importance of investing, including the magic of compounding. My thinking is that investing is the sexiest topic in personal finance, but it ranks behind basic money management in importance. You have to be able to afford to invest.
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Rob’s personal finance reading list
Kids? Yeah, no
An attempt is made in this CBC report to explain why people are having few children there days compared to previous generations. My question is the role played by the high cost of housing and other living expenses. In this episode of the Stress Test podcasts for Gen Z and millennials, Globe and Mail personal finance editor Roma Luciw and I look at double income couples with no kids.
An update on the higher capital gains tax
Legislation for the capital gains tax changes announced in the last federal budget has yet to be passed in Parliament. Will the minority Liberal government get this legislation through before the next election?
Bye Bye, Spotify
All about the big increase in the fee for subscribing to the steaming music service Spotify. I’m a subscriber and I’m thinking it may be time for a Spotify break. At our house, we’re rotating in and out of streaming services more than ever.
He answered a Facebook ad about crypto
Let’s jump right to the end of this sad story – a loss of $110,000 to scammers using a crypto investing opportunity to lure victims. Bulletin: you are not getting rich with investing schemes marketed on social media. The scammers are, but not you. Now for an account from Andrew Hallam, author of Millionaire Teacher, of a friend who was fleeced by a scammer who followed the classic playbook for building trust.
Podcast fans
Subscribe to Stress Test on Apple podcasts or Spotify.
Ask Rob
Q: I travel to Europe for pleasure maybe two times a year. I would like to know the best way to pay there. I was looking into prepaid cards, or credit cards with no foreign transaction fees. The $100+ fees for these cards might be more than paying the foreign transaction fee. Suggestions?
A: I have had good experiences using prepaid cards from EQ Bank, Wealthsimple and Wise while travelling in the United States. Here are some credit cards with no foreign transaction fees, which can add 2.5 per cent the cost of your purchase. On two trips to Europe per year, it’s very likely the annual fee for one of these cards would be less than the cost of paying foreign transaction fees.
Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
Tools and guides
The Globe and Mail’s guide to the best travel reward credit cards.
In the social sphere
Social Media: Reddit’s r/SlumlordsCanada thread is a sad look at this country’s rental market.
Watch: Have to say, I had a blast watching these short reels on New Money Nate’s YouTube channel.
Money-Free Zone: The 1995 song Mercy by the Mojave 3 is a reminder of how much great, overlooked music there is out there. A brooding song that nicely amps up the guitars at the end. The Mojave 3 were a U.K. band that had a run of five or so albums you’ve likely never heard.
