Weekend Reading: Budget 2015 Edition

The federal government delivered a package of goodies for seniors and middle-class families in its 2015 budget this week. The TFSA contribution limit was increased to $10,000 – fulfilling an election promise from 2011 – however it will no longer be indexed to inflation. Changes were made to the RRIF withdrawal schedule – effective immediately a 71-year-old will only need to withdraw 5.28 percent of their portfolio’s value, down from 7.38 percent.

Tax benefits for Canadian families include the enhanced Universal Child Care Benefit ($160 per month for children under 6, and $60 per month for children aged 6-17), a $1,000 child care expense deduction, a $1,000 children’s fitness tax credit, plus the family tax cut – a $2,000 tax credit for couples with children under 18.

Book giveaway: The Opposite of Spoiled

Speaking of children, my own will turn 6 and 3 this spring. The oldest has lost two teeth already, with customary visits from the tooth fairy, and we’re considering an allowance for her this year. Not knowing the going rate for the tooth fairy, or whether to tie the allowance to household chores, I’ve found guidance from New York Times personal finance columnist Ron Lieber’s new book, The Opposite of Spoiled.

The Opposite of Spoiled

The sub-title is how to raise kids who are grounded, generous, and smart about money. Lieber says good parenting means talking about money with our kids and not shying away from a topic that is all-too-often considered taboo in the family household.

The author shares a detailed blueprint for the best ways to handle the basics: the tooth fairy, allowance, chores, charity, saving, birthdays, holidays, cell phones, chequing accounts, clothing, cars, part-time jobs, and college tuition.

I reached out to Lieber’s publicist and got an extra copy of The Opposite of Spoiled to give away to a lucky Boomer & Echo reader. To enter, just leave a comment below that answers the following questions:

  1. What’s the going rate for the tooth fairy in your household? (For the record, we gave $5 for the first tooth and $2 for the second).
  2. What age do you think is appropriate to start your child on an allowance?

We’ll keep the contest open until Friday May 1st at 5:00pm EST and I’ll announce the winner in the next edition of weekend reading.

This week’s recap:

On Monday I wrote a controversial post – why living off the dividends no longer appeals to me.

On Wednesday Marie asked, what’s the right amount of retirement income?

And on Friday Lama Farran stopped by to offer 4 simple tools to stop drowning in debt.

Weekend Reading:

It pays to have seniority, according to Rob Carrick, who says that seniors were the runaway winners in the pre-election budget.

How will budget 2015 affect investors? Dan Bortolotti weighs in on asset location, withdrawal rates, and more.

Economist Kevin Milligan suggests that – due to the new $10,000 TFSA contribution limits – within 10 years, our tax system will become one in which almost no one under 40 pays any tax on investment income.

Jonathan Chevreau says to go ahead and contribute an extra $4,500 to your TFSA now. He just did.

Adam Mayers answers 20 questions about tax free savings accounts.

Crying the RRIF blues? Many people did not realize that, when the government gave them a tax deduction for their RRSP contributions, it was effectively buying a share of their retirement portfolio.

Here’s why the increase to TFSA limits has some rethinking RRSPs and retirement savings.

Fee-only planner Jason Heath explains why this reader thinks he’s working with a financial advisor while in fact he’s simply working with a bank mutual fund representative.

This article explains why performance benchmarks aren’t part of the upcoming CRM2 disclosure rules.

Michael James on Money wonders if “dividend haters” exist.

Ben Carlson wrote an open letter to Vice News about their new personal finance show for millennials.

Stephen Weyman put out the ultimate guide to spending less eating out at restaurants.

Blogger Jordann Brown reached her biggest financial milestone – hitting the $30,000 net worth mark.

Finally, Moshe Milevsky explains what’s really scary about high ratio mortgages in Canada.

Have a great weekend everyone!

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  1. Michael James on April 25, 2015 at 10:11 am

    I haven’t enjoyed the tax complications I’ve experienced, so I’ll wait to contribute the extra $4500 to my TFSA. The slight benefit of contributing early isn’t worth the potential hassle to me. Thanks for the mention.

  2. Mag on April 25, 2015 at 6:45 pm

    I’m not sure what the going rate is because my almost 3 year old is just getting his last molars and my baby is getting her first tooth! Not at the tooth fairy stage yet but if I was I would give a toonie per tooth.

    I think 5 is a good age to start an allowance.

    This book sounds very interesting. It’s not available at my local library yet (looked it up right away). Money wasn’t something my parents discussed with me growing up. Money was more of a topic you SHOULDNT talk about, almost taboo.

  3. Martin on April 26, 2015 at 12:24 am


  4. Lisa Henderson on April 26, 2015 at 5:04 am

    I think you’re $5 for the first tooth (the first one should be special!) and $2 for each after is reasonable. I have friends that give $10 per tooth, which I think is a little steep!
    I think the age for starting an allowance depends on the child. If there is no interest in money, it’s going to be harder to teach responsible spending. However, I’m guessing around 5 for most kids would be reasonable.

  5. Atticus on April 26, 2015 at 5:12 am

    Hi Robb,

    I advise your children to put the proceeds from the tooth fairy into a TFSA and watch their money grow…like their new teeth 🙂
    Gotta start early to make compounding really pay off!

    • Echo on April 26, 2015 at 9:09 am

      Hi Atticus, a savings account is a good idea but remember that you can’t open a TFSA until you’re 18.

  6. Lama on April 26, 2015 at 5:29 am

    The tooth fairy in our house usually leaves $5/tooth . However one time she was so busy , she forgot to pass by so the next day she left $10 to compensate !! 🙂

    As for the allowance , I think a good time to start is when the kid has a good concept of the numbers, and the concept of addition and substraction . It will help them understand how much they’ll accumulate or how much they will have left when they spend . In our house , my boy started when he was 5 years old . My daughter is almost 5 now but she doesn’t have the same grasp of numbers and amounts so I’ll wait a bit longer for her.

  7. Alison on April 26, 2015 at 5:35 am

    Sounds like we have the same tooth fairy because my son got $5 for the first tooth and $2 for every other teeth (8 lost so far at age 9).

    For allowance, we started our first child at age 5, but our second child at age 4 (he saw what his brother was doing so we started him earlier).

  8. daftster on April 26, 2015 at 6:50 am

    1. $0 – tooth fairy
    2. 6 years old – $1 a week

    • Karen Parkins on April 26, 2015 at 7:24 am

      I guess I’m not as generous – the tooth fairy gives $1 per tooth regardless of which is first or last. As far as an allowance I believe it should start when a child has a good grasp of numbers so that the one that is slower won’t start until maybe 7 whereas the younger one is ready at 5. For that I believe $2/week is a good start with specific chores to do to receive that. The other option is to have a list of chores with the money earned for doing them beside it but this would get a bit onerous to keep track of. Since I would like the children to learn all the chores, I am inclined to switch chores for the week.

  9. Keith on April 26, 2015 at 7:01 am

    My three children are grown but I have one word of advice from my past experiences….try to prevent tooth loss and the subsequent Tooth Fairy visit when the child’s Grandparents are visiting. Once it happens, it is difficult if not impossible to reverse the monetary precedence that has been set!

  10. Jimmy on April 26, 2015 at 8:10 am

    When my kids were little we gave $2 in quarters. At 5 years old getting 8 coins seemed to have more wow factor than a Toonie! Then we left a note from the tooth fairy encouraging to brush their teeth and said that the whiter the teeth the more we would leave. Bumping it up by a quarter or two every now and then.

    As for allowance I created a list of multiple items that could be done around the house to earn money. 6 days a week they were expected to do one item for free because being part of a functioning household they shouldn’t have to be rewarded for helping out. So if they washed dishes after dinner and took out the trash they could count one chore. It the end of the month everything was added up. Bigger jobs were worth more than easy jobs. It became a competition between my kids to see who could earn more. My kids are now 11 and 16 and this system has been effective for the better part of 3 years now. The house has never been cleaner! Each kid earns between $20-$25 per month

  11. Tarilyn on April 26, 2015 at 9:20 am

    So Excited for this book!
    1. No kids in the house yet, but $1 a tooth sounds reasonable to me
    2. Age 6 or 7 seems to be a good age when they can start making decisions and understanding how to spend vs save vs give.

  12. Charleen Clark-Pearce on April 26, 2015 at 9:42 am

    My 9 year old has lost 10 teeth now and the Tooth Fairy left $2 each time. Some of my friends leave $5 or more, but we don’t want to make it like another Christmas. As for allowance, we started our son @ $5/ bi-weekly (per paycheque) when he was 5 years old, then added $1 after each birthday. Initially, we were going to tie it to the completion of chores, but I read one of Gail Vaz Oxlaide’s books that said allowance shouldn’t be dependent on chores, but that both should be completed b/c a child is a member of the family and that’s what family does.

  13. Deborah Scollard on April 26, 2015 at 9:47 am

    1. Two dollars per tooth (in my day, I received $0.25 .
    2. An allowance should start when the parents feel the child is ready. This age is generally around 5 or 6 years old.

  14. Lindsay on April 26, 2015 at 11:10 am

    1. I’m thinking $2 per tooth is generous
    2. For the allowance, I struggle with this one. I think 6 or 7 may be a bit early, that they won’t quite understand the concept at that age and when they are old enough to, then the allowance seems like a given in their mind. I’m thinking more like 8-10, but I really don’t know. That’s why I’d love to have a copy of this book!

  15. MK on April 26, 2015 at 11:46 am

    The tooth fairy would bring a toonie per tooth in our house!:)
    And I feel 5 or 6 is a good age to start an allowance but I have no idea how much I would give. I probably will not link allowance to chores but I don’t know I would love to read this book!

  16. Alan on April 26, 2015 at 2:10 pm

    My kid is still too young for the tooth fairy, but I like your $5 for the first and $2 thereafter idea. I might copy it.

    I think I’d start an allowance between 5 and 8 years old. I was a teenager and my brother was a pre-teen when my dad asked us if we wanted an allowance. We said no; allowances were for kids.

  17. Eric on April 26, 2015 at 7:52 pm

    Still waiting for the first tooth to come out in our house. Our friends did the same as you suggest, $5 for the first and $2 each after that. I really like the idea of the whiter teeth getting a bit more!

    I think for allowance each child will be different. Once they understand numbers and what the allowance actually is for you’d be good to go. And the more children you have, the younger they may all start as the youngest wants to do what the others are doing.

  18. Aron on April 26, 2015 at 8:40 pm

    Our tooth fairy is on the generous end! $5 per tooth at home. but if a tooth is lost at grandma and grandpa’s. . . let’s just say it’s a different scale (this has happened 3 times so far!)

    we still haven’t started allowance with our 7 year old, we’re working on money concepts and it’s definitely about time, but we’re struggling with “paying” for chores, vs. allowance “just because.” Mom and Dad don’t get paid for chores around the house, so why should the kids? but giving money just to spend also doesn’t seem exactly right.

  19. Tim H on April 26, 2015 at 11:43 pm

    1. $5 for the first, $3 after
    2. $5 per week if chores done

  20. jianghua on April 27, 2015 at 3:52 am

    starting from age 6,but link with house chore. i think 2 will be apptopriate.

  21. Jordann on April 27, 2015 at 6:10 am

    Thanks for the mention! I really appreciate it.

  22. Stephen @ How To Save Money on April 27, 2015 at 8:08 am

    Thanks for including my article on restaurants Robb.

    We’re going through a lot of the same things you guys are with a young family but we haven’t quite reached the tooth fairy age yet. We generally tell our daughter when things are fairy tales and when they are real so she already knows there is no Santa Claus and we’ll do the same thing with the tooth fairy I’m sure. However, we probably still will give her something to celebrate the occasion.

    I’m not sure what the right age for an allowance is. I actually started my 4 year old daughter on an allowance this year, but it hasn’t really worked out that well. It’s helped her understand the concept of money a little bit but she doesn’t remember to ask for it and I often forget to give it. Will probably try a reset on that a bit later.

  23. Deelia on April 27, 2015 at 3:14 pm

    We gave a loonie for each tooth,but because the tooth fairy flies around the world, she also gives some coins from other countries. A little bit of education added in.
    We started an allowance when they were 10, and it started at $10. They had to save half of it in their own bank account, and could spend the rest on whatever they liked or save towards something bigger. Both of them have a few thousand saved now, quite painlessly.

  24. Amanda on April 28, 2015 at 7:45 pm

    1. $2 in our house.
    2. We started the elder at 6, but like others said, the younger caught on and started earlier. He’s 5 and is struggling with the concept of saving, whereas his sister is now 8 and just bought herself an iPad mini. Pretty good on $3/week (well, plus birthday and holiday money). I go back and forth on the chores question – it’s great in concept to expect them to just do unpaid chores, and the easy ones can usually get done with a bit of reminding (setting table), but it really helps to have that extra motivation to tackle cleaning their rooms!

  25. Marilyn on April 29, 2015 at 6:17 am

    My parents gave $5 for the first tooth and $2 for each tooth afterwards. This was about 20 years ago when all the other kids were getting a quarter. I hate to think how those rates have changed with inflation!

    As for the age at which to start an allowance, I’m undecided so far. I never had an allowance, but asked for money whenever I thought I needed it. My spouse always had an allowance that was tied to chores. I was taught to save as much as possible, and he was taught that you can’t spend more than you earn. Now, I’m the saver and my spouse is a spendthrift whenever he has a cent in his pocket.

    We probably will give our child an allowance between the ages of 5 – 7, depending on her maturity.

  26. Darryl on April 29, 2015 at 9:34 am

    My wife and I felt a bill is best instead of coins. We are in Canada so it’s $5, $10 or higher denomations. We ended up going with $10. As for allowance, any age where they are capable of helping out and comprehending what money means is okay. My son is 8 and daughter 6. We started allowances now actually for chores they do around the house. First allowance pay for my son was age 8. When my daughter saw what her older brother was up to, she insisted on starting as well so she started at age 6.

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