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Money-saving tips for back-to-school shopping
by Marissa on 

Dear Parents,
As a member of your group, I understand you have mixed feelings this time of year – anxiety, excitement and stress.
Some of you may be worrying about how your five-year-old will cope heading to kindergarten. Some of you may be excited that your teen’s sleeping routine will return to normal instead of their roll-out-of-bed at noon summer habit. Others may be worrying about how much you will spend on back-to-school shopping this year.

I’m here to tell you that:
  • Your five-year-old will survive the first day of school and most likely will come home with tales of fun exploits and new friends.
  • Your teen will likely not want to get out of bed that first day.
  • Back-to-school shopping doesn’t need to break the bank.

I can’t help you with the first two, but here are 10 tips to help you prepare for your back-to-school shopping this year:
  1. The dreaded list – Usually, schools provide a copy of the needed supplies with the June report card. I know. A lot has happened since then: vacation, camp, soccer tournaments, ball games and so on. If you’ve misplaced it, you can usually find it on the school’s website. Some office supply stores will also have copies of the supply list for schools in their area, or check with other parents.

  2. Take inventory – Compare the list with what you have left over from the last school year. If your child is like mine, they probably came home with a sack of school supplies after cleaning out their locker at the end of the year. My son had unused duotangs, packs of loose leaf and graph paper, and reusable binders. He brought home his backpack, pencil case, his coloured pencils, scissors, calculator and geometry set. We tucked them neatly away for September to roll around. Pricing the items we were able to tuck away, I’ve saved about $36 from this year’s shopping list, not to mention the headache of finding these in-demand items in the store.

  3. Price compare – Get out the flyers and compare the prices for the items you still need. In some cases, stores will price match their competitors so bring the flyers with you.

  4. Buy in bulk – If you have more than one child, compare the cost of buying the single item (a binder, for example) with the price of a package of binders. Calculate the price per item in the package deal to see if it offers a savings. Use those math skills you developed back in elementary school or, better yet, get your child to do the calculations. This is a great opportunity to You will be teaching your child about smart spending.

  5. Stock up – When you see a good deal, purchase as many as you can if you know you will need the item next year too. Last year, for example, I came across a deal for loose leafs. It was 25 cents a package (Regular price: $2.73). I purchased the six-package limit, saving myself nearly $15. I went back the next day and purchased more.  With the two packages my son brought home unopened in June, I have enough for this year too.
  6. Lesson learned – Spend money on a quality book bag. It’s the one lesson I’ve learned in my 17 years of back-to-school shopping. The book bags with the latest cartoon character emblazoned on their front usually fall apart by Christmas. The zippers break and the clips for the straps bust, meaning Santa has to leave a new one under the Christmas tree. We began investing in $60-$80 book bags. Many offer a lifetime warranty on the zippers. My oldest son will be graduating from university and is still using the one he carried in Grade 10. If you do the math, that’s about $10 each year versus a $20 cheap book bag you have to replace halfway through the school year.

  7. Check the closet – Do they need a new back-to-school wardrobe? Chances are, they don’t not.  The clothes that fit them at the end of June usually still fit them two months later. Just purchase what your child needs,; not what they want.

  8. Money lessons – Use back-to-school shopping as a way to teach your child about money. Give your child a budget for a needed item, like sneakers. If they want a higher-priced brand, make them earn the extra money by doing chores around the house. If they are too young to understand budgeting, teach them about sticking to a shopping list. These are both tools they will use later in life. Check out our Make it Count parent’s guide on how to teach your children about money management.

  9. Save money throughout the school year – Send your child to school with a packed lunch instead of lunch money. Even if you let them buy their lunch at school once a week (assuming buying a school lunch is $6-7), you are saving more than $800 by the end of the school year.

  10. Budget for next year – Back to school happens every year. If you know your back-to-school expenses, including school fees and school photos, plan for them now. Open a separate savings account and set up an automatic transfer into the account of $6 a week, or $24 a month. Once next September rolls around, you will have almost $300 in the bank.

Have a student headed to university?  You might like this post:  10 Ways to Save Money in University



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What the interest rate increase means for you
by Marissa on 

You’ve probably already heard the  Bank of Canada  increased its key interest rate by 0.25% to 0.75%, prompting many financial institutions to also raise their prime rate to 2.95% from 2.7%. This was the first rate hike in seven years, and it may not be the last hike we see this year. All the numbers and terms flying around can make your head spin! Today we’re going to look at what they mean, and how this increase could impact your loans and your household finances.

What is the key interest rate?
The key interest rate is also called the overnight rate.  The overnight rate is the interest rate that banks and financial institutions charge (or pay) on one-day (overnight) loans among themselves. The major banks in Canada use an electronic system called the Large Value Transfer System (LVTS)  to conduct large transactions with each other. The accounts have to be settled each day.  In order to do this, the banks may need to borrow money from one another, which gets settled the next day (hence, the “overnight” rate).
   
What does Prime Interest rate mean?
The prime interest rate is the lowest interest rate that banks and financial institutions use to lend money to their clients. The prime rate is impacted by the key interest rate (overnight rate). If the overnight rate goes up, that means the banks pay more in interest to settle their accounts.  In turn, they will need to increase their own lending rate (the prime rate).  Without an increase in prime rates, the bank or financial institution’s profit margin narrows when the key interest rate increases. That’s why you’ll almost always hear that the prime rate has gone up following an increase in the key rate, usually by the same amount. (Likewise you’ll often hear the prime rate goes down following a decrease of the key interest rate.)

How the overnight interest rate increase will affect your loans
If any of your loans have variable interest rates (that means rates that change based on the “prime” interest rate), it’s likely your loans’ interest rates will increase, and so will your payments. You may hear “prime plus”, that means the interest rate is the prime rate, plus a certain percentage.

Here’s an overview of some loans where you could see a rate increase:

Mortgage: Variable and adjustable mortgage  rates are based on the prime interest rate.  Since the prime rate has increased, your mortgage payments will increase immediately. If you have a fixed-rate mortgage, it’s likely that nothing will change until your current fixed term ends and it's time to renew.

As an example, this rate increase has an impact of roughly $14 per month on a $100,000, 20-year mortgage with a 4.0% interest rate. An interest rate of 3.75% on the same loan comes to roughly $156 per month; following the increase, it goes to $170. Whether this takes a significant toll on your finances will depend on your personal situation.

Home equity line of credit (HELOC): If you’ve borrowed money against your home’s equity, it’s likely to be a variable-rate loan. Now that interest rates have risen, you could owe more.
Line of credit: The interest on a regular line of credit is typically linked to the prime rate set by the Bank of Canada, which means that your rate is likely to increase.

Student loans: Government student loan rates can be either fixed or floating. If your student loan has a floating rate, which means it can change at any moment, you’ll see your payments go up right away.

If you’re still unsure of how the increase will affect your loans, get in touch with your financial institution.

How you can reduce your interest costs
If your mortgage is close to renewal time, shop around to see if you can find a lower interest rate. So long as it works out to less interest in the long run, you may save by switching. However, be wary of fees and penalties that may come with switching early.

Pay back debt as soon as you can. You can do this by including debt repayment into your budget and make it a priority. You can save money in the long run by paying more than the minimum payment each month – you’ll pay your debt off quicker and will pay less interest. This will free up money for savings in your budget. Our budget tools  can help you plan this out!


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Keep NB scam-free! Protect yourself, your family, and newcomers to our community
by FCNB on 


Keep NB scam-free! Protect yourself, your family, and newcomers to our community

New Brunswick Day offers a chance for residents to strengthen their local communities by celebrating their achievements, history, culture and landscape. It’s also an opportunity to welcome  people who have come from across the world to call New Brunswick home.

Unfortunately, fraudsters prey on those who aren’t familiar with our language, legal system, investment and banking system or government programs. They take advantage of their vulnerabilities and exploit them.

That’s why we’re working hard to provide the newcomer community with information to help them spot and avoid common frauds and scams. You can help too! Recognizing and avoiding a fraud or scam protects your own financial future; reporting the fraud attempt, however, protects those more vulnerable.  

One of the more common approaches is affinity fraud. Scammers target tight-knit groups, clubs or associations, including those aimed to help newcomers meet others who share their culture. In affinity fraud, a scammer infiltrates these groups to pitch an investment scheme, usually first to a few prominent members who then unwittingly pitch the scam to the rest of the members.
 
Affinity scams are often conducted in person by someone who infiltrates the group, exploiting the trust and friendship of its members. But it’s not the only way scammers target newcomers.

Last year, a Syrian family in Saint John lost about $400 after receiving a phone call from someone pitching English lessons.  It turns out the lessons didn’t exist, and the scammers were just looking for money and banking information.

Scammers posing as the Canada Revenue Agency (CRA) or Citizenship and Immigration (CIC) frequently target newcomers in an attempt to get money or personal information.  The CRA scam skimmed $4.3 million from people across Canada last year through aggressive phone calls, text messages or emails. The scammer threatens the newcomer with deportation, jail time or removal of their children from their home if they don’t pay. Some instances have even included threats of kidnapping.

Here are some other common scams targeting newcomers:

Employment scams: These scams can include Secret Shopper jobs, work-from-home opportunities and employment offers that require you to buy materials or pay to work there. In the Secret Shopper scam, the scammer sends a cheque from a company in the mail with the offer to spend a certain amount at a certain store. The scammer asks for a certified cheque or money transfer in return and advises the individual they can keep the rest of the money as compensation.  Often, it takes a week for the bank to determine the cheque is counterfeit, leaving the victim out hundreds to thousands of dollars.

Rental scams: Fraudsters rent housing properties that don’t belong to them or don’t exist. For example, Airbnb has recently become the target of fraudsters, who are using tricks to lure consumers from their legitimate website to a phony one complete with a fake live chat service (Airbnb doesn’t have this feature). There, they trick consumers into thinking they are emailing the property’s owner directly and wiring money to hold the reservation (always use Airbnb’s internal payment system).

Passport/Identification fraud: Scammers impersonate government officials, lawyers and immigration consultants to collect personal information. Some organizations claim to offer help to Canadian citizens who want to apply for a passport or other travel documents. They try to sell information kits that outline how to apply. Some also falsely claim to be able to speed up the application process for a fee.  Passport application forms are free and available on the Government of Canada website. Only passport service locations are authorized to collect passport processing fees.

Dating and marriage scams: Fraudsters initiate romantic relationships online or in person for the sole purpose of robbing the victim. They try to lower the victim’s defences by appealing to their romantic and compassionate side. Victims might be approached even on legitimate dating sites, perhaps by someone claiming to have a sick family member. After they send the victim a few messages and maybe a glamourous photo, they ask for the victim to send money to help their situation. Some scammers even arrange to meet the victim, convince them to give them money or presents – and then disappear.

Sometimes, newcomers are embarrassed to come forward if they do find themselves caught in a scam. FCNB is here to help. If you have any concerns or suspicions, contact us or file a complaint online at fcnb.ca.  

Resources:

Become a Master of Spotting Fraud (English, French, Arabic)


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Question of the Week: What is tenant's insurance and why do I need it?
by FCNB on 


Question of the Week: What is tenant's insurance and why do I need it?

What is tenant's insurance?

Tenant's insurance can protect your possessions in the case of theft, loss or damage. It can cover:

  • damage to or loss of your possessions
  • personal property stolen from your vehicle
  • accidental damage you cause to any part of the apartment building or rental unit
  • injury caused to visitors
  • additional living expenses if your rental unit is damaged by an event covered in your policy, and you cannot live there while it is being repaired

Do I need tenant's insurance?

The short answer is yes. If you are renting your home, you need tenant's insurance, because your landlord's insurance does not protect your stuff. As a tenant, you're responsible for any damage you cause to your apartment, its contents and the rest of the building, as well as any accidental injury you cause to visitors and other tenants. Your insurance should cover the cost of replacing everything in your home if it is destroyed or stolen. It should also cover your liability to others.

When purchasing tenant's insurance, make sure the policy meets your needs, provides enough coverage and fits your budget. Policies differ among companies so always read your policy document carefully to understand how you are protected before buying insurance.

Got your attention? More in-depth details on how to get started with tenant's insurance can be found in this blog post; or, to learn more about different types of insurance, visit the Insurance section of our website. You may also be interested in our series on moving into your first apartment.


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Question of the week: I’m going on vacation. Should I buy travel insurance?
by FCNB on 

Question of the week: I’m going on vacation. Should I buy travel insurance?


Should I buy travel insurance?

The short answer is…maybe. If you’re travelling you should definitely consider how you will protect yourself in the event something happens.  This may mean purchasing additional travel insurance – but you may already be covered without realizing it! Read on to learn more before you buy.

Travel insurance can cover unexpected costs when you travel out of the country. These can include:

  • emergency medical costs and hospital trips
  • accidental death or dismemberment
  • trip cancellation
  • lost luggage
  • damage to accommodations when you’re not at fault

You can purchase travel insurance from most insurance agencies, travel agencies, credit card companies and banks. But before you do, check these four things:

  • Am I already covered under another insurance policy? For example, you might already be covered through your employer or the credit card you used to purchase the trip.
  • What does my existing policy cover? Don’t assume you are covered - make sure you understand what your policy covers and that it meets your needs, including any sports or activities you plan to participate in on your trip. When purchasing travel insurance, check what types of restrictions and limitations the policy has. Give your insurance agent or broker a call to find out.
  • Will my policy cover me for my entire trip? Travel insurance policies tend to be for a set time period, so if you alter your travel plans during your trip, you’ll want to make sure you’re still within the coverage period.
  • Can I be reimbursed at a later date for expenses incurred on my trip? You should always call your insurance company before undergoing medical procedures to ensure that the company will pay for them.

You’ll never regret being prepared for the unlikely event that a problem or health issue arises while on a trip. Knowing you are covered in the case of an emergency will give you the peace of mind you need on your vacation.

For more information on travel insurance, consult the Canadian Life and Health Insurance Association’s guide to travel health insurance.



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