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Are your kids smart spenders?
by FCNB on 

Are your kids smart spenders?

We’ve had the chance to talk to people all over New Brunswick about smart spending.

The biggest lesson we’ve learned? Smart spending is a lifelong process, and it is different for everyone.
However, we do all have one thing in common: we first learned the difference between wants and needs as children, and it’s a lesson we need to refresh again and again.

We’ve lost count of how many times we’ve heard these phrases:

“I wish money management was taught in school.”

“I wish I had more time to talk to my kids about money.”

“I wish I knew how to start talking to my kids about money.”

Today is Talk With Our Kids About Money Day. It’s an opportunity for parents, teachers and community leaders to help provide New Brunswick children with the knowledge they need to spend smart for life.

We have lots of resources to help you get the conversation going. We’ve listed them below – and you can find all of them on our website.

  • Make It Count! – A free program that provides hands on activities, practical tips and lesson plans to make talking about money fun and easy! Make it Count! offers resources for both parents and teachers.
  • Incorporating Money into your Classroom (eBook) - A book full of classroom activity ideas to helps teachers start the conversation on money with their students of all grades.
  • Smart Tips eBook – A book of financial tips submitted by New Brunswickers for the next generation.
  • Financial Life Stages – A guide for parents that describes what money knowledge kids should have at different milestones.

Not the resources you’re looking for? We’d love to hear your ideas, and we may have other resources to help you. Contact us today!

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Celebrate Earth Day on April 22!
by FCNB on 

Celebrate Earth Day on April 22!

Month after month, one of the best ways to save money is by conserving energy. Reducing your consumption puts some money back in your pocket -- to spend on other budget needs, pay off debts or invest to make your money grow.  Saving the earth and our bank accounts?  Sign us up!

With Earth Day being celebrated on April 22, we decided to talk to Beth Pollock, program manager at NB Power, for tips on how you can reduce your energy bill.

She visualized the steps to conserve energy as a pyramid, with the first steps forming the base. Interestingly, saving money can also be visualized in a pyramid.

Understanding what you are spending

Think of the base of the energy saving pyramid as understanding how much your electricity consumption is costing you, Pollock says. It’s the first step to reducing your energy consumption. Look at your monthly bill or view your household consumption history by logging into the NB Power website.

 “You can’t manage what you can’t measure,” she says. “So you need to have an understanding of what you are spending month over month and year over year on energy.”’

About 50 per cent of an average home’s annual energy consumption is spent on heating the home; 20 per cent is used to heat hot water and the remaining 30 per cent on appliances and lighting. You need to keep this in mind when thinking about saving energy and money.  Where should you focus your efforts to have the biggest impact on your personal bottom line?

The same can be true for looking for savings in your monthly budget. Track where you are spending your money for a month, even down to your small expenditures like your daily coffee. And then complete a budget worksheet (PDF Excel) This will help you see where you are spending the most, and where you should focus your smart spending and savings efforts overall.

Conserving energy means saving money

The second tier of the energy saving pyramid is conservation, Pollock says.

 “You want to reduce your energy consumption whenever possible.”

That includes washing clothes in cold water, turning off lights, turning down your thermostat before going to bed and taking shorter showers. Also consider unplugging electronics when you are not using them, like coffee makers and microwaves whose digital clocks constantly consume what some have dubbed phantom power.

“All those behavioural changes are the fastest way to save energy with no investment by you,” she says.

The same is true for saving money. By looking at your budget worksheet, you can adjust behaviours to keep more money in your pocket.

For example, brew your coffee at home and put it in a thermos instead of stopping at a drive-through. Pack your lunch for work or school instead of eating out. Carpool instead of driving solo to work. Look at your fixed expenses as well as your discretionary spending to see where you could be saving money. Check out more tips on how to be a smart spender.

Investing to save money

The top level of the triangle focuses on applying new technologies that use energy more efficiently, Pollock says. It requires an upfront investment that will save you money in the long run.

Pollock says it can be a minimal investment, like switching to LED lighting, ENERGY STAR® qualified appliances and programmable thermostats.

Until May 31, NB Power is helping New Brunswickers save money and energy through in-store rebates on a number of energy efficient products. When you take advantage of the rebates, you are saving money twice. Learn more about the eligible products and participating retailers.

New Brunswickers can also take advantage of its Total Home Energy Savings program. It offers money back on efficiency upgrades you make following a home energy evaluation.

Let’s now take a look at the top level of the money savings triangle. It’s also about investing and making your money work for you.

This is where the two triangles converge. Take the money you’ve saved by conserving energy and use it to pay down your debt faster or invest it to make your money grow.

Investing can help you save money to reach your life goals, such as saving for your child’s education, helping buy your first home or funding your retirement. Before making an investment decision, understand the basics on how investments work.

Saving energy means saving money. So this Earth Day, take time to look at the two pyramids and find ways to keep more money in your pocket.

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Does your credit card come with car insurance?
by FCNB on 

Does your credit card come with car insurance?

Many of us have been there. You’re picking up a rental car, and just before you sign the agreement, the rental agency employee asks the question that tends to stump you.

“Would you like to purchase our auto insurance?”

The next time you rent a car, arm yourself with the right knowledge so that you feel confident in answering this question.

So what coverage do I get?

Maybe you’ve heard a vague rumour that your credit card comes with insurance when you use it to book your car rental.  Is this true?  The short answer: it depends on your credit card. As well, it’s worth checking with your regular insurance company to see if your policy offers rental car coverage. 

What coverage do I need?

Here’s a list of what coverage you should have when renting a car:
  1. Damage to the rental vehicle
  2. Theft of the rental vehicle
  3. Damage to another person’s vehicle
  4. Injury to another person
  5. Personal injury
  6. Loss of use of the rental vehicle while it’s under repair

Some of those damages may be covered by your credit card, while others won’t. As well, coverage amounts will vary. Before you decide about buying coverage at the rental desk, ask your insurance company, bank or credit card company what you are or are not covered for when you rent a car.

TIP: If you purchased travel insurance, damage to a rental car might be covered.

Want to learn more? Check out our content on insurance.

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Top Traps: Romance Scams
by FCNB on 

Top Traps: Romance Scams

Total New Brunswick complaints: 18
Total New Brunswick victims: 9
Total loss: $168,184

How it works:  Scam artists lure victims into romantic relationships with the goal of stealing from them.  These scam artists are master manipulators who know how to play on their victim’s emotions and get them to hand over money, personal information and gifts. These scams can happen both in person and online. Scammers build trust by sending pictures, gifts or other tokens of their affection to their victims. Once trust has been built, the scammer will ask for money, saying that the funds are needed to pay for a medical emergency or cover travel costs to meet the victim. These scams can last for years, as long as the scammer keeps getting what they want. Once the money runs out, the scammer will disappear and move onto their next target.

Protect yourself: Be cautious when looking for a relationship online. Never send money to someone you have never met, and do not share personal details when chatting online.

Report it: If you suspect that you have been the victim of a romance scam, report it to your local police service and file a report with the Canadian Anti-Fraud Centre.

Learn more about protecting yourself and your loved ones from fraud:

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Dispelling the myths of Bitcoin
by FCNB on 

Dispelling the myths of Bitcoin

Bitcoin has gotten a lot of media attention in the last few months. You’d have been hard pressed not to see a story about its skyrocketing trading value as it got close to $20,000 USD.

Some people think that Bitcoin is the new “money” that will soon be the backbone of the world economy. We say “Not so fast.” Let’s take a step back and take a closer look.  If you’re thinking about investing in Bitcoin, or another cryptocurrency, read on before making your decision.

Money must be three things:

  1. A medium of exchange. Meaning you can use it to buy or sell products and services.  Before money, people exchanged goods and services for other goods and services.  (Remember when you tried to trade that apple in your lunch box for the chocolate bar your friend brought?  With money, trade is easier – you can just buy your own chocolate bar.)
  2. A store of value. Money should be able to be used to build up savings because its value stays relatively stable.  It must also have stable and largely predictable purchasing power. That means the money you have today will buy more or less the same amount of stuff tomorrow. Money works best if its value is slightly inflationary. When a currency is inflationary, it means that the dollar you have today will have less purchasing power in the future. A bit of inflation encourages people to spend their money and keeps the economy moving. This is part of what governments are doing when they adjust interest rates and the money supply. But Bitcoin is acting in a deflationary manner. Its value is increasing based mainly on people being very excited about it creating market hype and speculation. This encourages people to hold on to their Bitcoin – not spend them. 
  3. Accepted as a “unit of account.”  Money allows us to compare the value of products and services and express this value as a price. We can then compare costs of things and make financial decisions.

Bitcoin has only one of the properties listed above: it is a medium of exchange, but even still, it is not generally accepted as a form of payment in a lot of places. It doesn’t meet the other two requirements, mainly because its value is so unpredictable. And so Bitcoin is not being used as any sort of traditional currency. To be money or to be a real store of value, it must be stable.

It’s natural to be curious about Bitcoin as an investment opportunity. But if you’re like many New Brunswickers, you might not know the reasons to be cautious about it.

We can provide you with five.

1) Bitcoin does not solve an existing consumer problem
Most people do not use Bitcoin for making day-to-day payments. It is not more convenient or efficient to use Bitcoin to run your errands or make your purchases. It is not accepted in many places and the transactions are slow and expensive.

The bitcoin network can process between three to seven transactions per second (or TPS). Visa can process approximately 56,000 transactions per second. Besides the fact that transaction processing time is extremely slow compared to existing payment methods, this Bitcoin bottleneck is causing transaction fees to increase.

Beyond speculation, its only major advantage over existing payment methods is its purported anonymity.   Unfortunately, in many cases, this anonymity is being exploited and Bitcoin is being used for purchasing and financing illicit goods and services, like money laundering.  Bitcoin does not solve any specific consumer payment problem that is not already addressed by the existing financial system, or that could not be solved within that system with reasonable effort.

2) Bitcoin is more complicated to use
Even if Bitcoin did work as well as existing payment methods, you still have to learn a whole new set of rules and procedures for Bitcoin transactions. It’s just not worth it for most people to go through this extra trouble. 

You have to use digital wallet and exchange services for buying and selling cryptocurrencies. Not only can they be complicated to use, there are a lot of additional risks in storing your money in a digital wallet or exchange rather than in a regulated financial institution, like a bank or credit union.

Wallet or exchange providers can be hacked.  At the end of the day, you’re simply replacing a regulated insured intermediary (a bank), with an uninsured and in most cases unregulated one (the exchange or wallet provider).

3) Bitcoin deposits are not insured
When you deposit Canadian currency into an eligible account at a bank or credit union, your deposit is insured. This insurance is free and automatic. It protects you in the case of bank failure. Deposits at banks are insured federally by the Canada Deposit Insurance Corporation (CDIC).  Deposits at Credit Unions are insured provincially − in New Brunswick by the New Brunswick Credit Union Deposit Insurance Corporation (NBCUDIC).  If the bank or credit union fails, the insurance automatically pays out.

There is no insurance for Bitcoin or any other cryptocurrency. It is hard to imagine why the average consumer would give up this insurance, simply to keep their day-to-day money in a cryptocurrency.  If (or when) your digital wallet or the exchange is hacked, your personal information and your money is at risk. There is no payback from the wallet or exchange to recover what you lost. 

4) Bitcoin offers no customer service
Any day-to-day monetary system has to allow for human error, and provide a way to fix those errors. Think of the message at your bank when you pay a bill or transfer money to someone. Once you complete the transaction, you may be able to call the bank if you’ve made a mistake or want to cancel the transfer. If you sent your Bitcoin to the wrong or a nonexistent address, it is lost and you have no customer service to call.

5) Bitcoin isn’t regulated by anyone
Bitcoin operates outside of regulation, which makes it prone to all kinds of manipulation.  Investors should proceed with extreme caution when thinking about investing in Bitcoin or any cryptocurrency.  Be sure to speak with a registered investment professional before you make any investment decisions. You can check if an investment adviser is registered on the National Registration Search tool.

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