We hear a lot about financial literacy these days as Ottawa promotes its efforts to educate Canadians about money management, saving and investing.  Clearly, the first steps begin with our kids, and not just in the classroom. Parents, grandparents, and other caregivers can provide some of the building blocks to economic maturity by sharing their own experiences with money.  Here are 3 ways you can help them understand basic financial concepts. Let them manage their own income.  It’s important for your kids to have their own money to manage – and mismanage.  They will learn a lesson (albeit painful sometimes) when they spend their entire allowance on an impulse purchase. Help them set goals and allocate their money.  Set goals for donating, savings and spending and give them separate piggybanks to allocate the chosen portion of the money they earn. Show them the power of compound growth.  Open a savings account, GIC or other ...

Got a refund?  Think RRSP If you anticipate receiving a tax refund, you may already be dreaming about how to spend it – maybe a trip or a new IPad.  Here’s a better idea:  use your refund to top up your RRSP (Registered Retirement Savings Plan) and enjoy a bigger nest egg when you need it. If you contribute now for the current year, you will be putting your money to work almost a year earlier than those who wait until the the last minute.  You will maximize the tax savings and tax-deferred growth that make RRSPs so attractive in the first place. Let’s say your reinvest your tax refund of $2,000 in your RRSP.  You will then have a $2,000 tax deduction for 2010 representing a $700 tax savings (assuming a 35% marginal tax rate).   Not bad for reinvesting the government’s money!  If you invested this $2,000 tax refund for 30 ...