Invest in a Rainy Day!

What happens when it rains? People stay inside and go stir crazy! But not when you have something to do! This is why you should always have a rainy day pot. That way, you can go see a movie, or go to a show or something, instead of lying around with the heater turned up. Just make sure you don't save your umbrella-money... Some of you adults out there might not think that this is applicable, but there is a different meaning to saving for a rainy day. What would happen if you got laid off? Where would the money come from if you didn't have a job? You would need to have saved it before-hand. This kind of rainy day saving should allow you to live normally for at least 6 months. That's one long rainy day! But that kind of rainy day savings could be applicable to anything, also known as an "emergency fund". That kind of fund would cover small emergencies like a broken arm, but it's good to have larger funds, like if your roof blows off in that 6-month-long rainy day!


Quick! Catch Something Bad!

Dear devoted readers,
Here is my second question related to insurance. You may have noticed it will take longer to read, but bear with me. It could really help out those of you who might get serious illnesses, but not serious enough to be restrained from using the computer.

Dear Munnybagz
What are your thoughts on critical illness insurance? I'm pondering whether or not to buy some, having witnessed friends and families go through serious illnesses that have drastically altered their finances. Sure, I have enough $$ in my RRSPs that I could liquidate if I needed extra $$ in case of a serious illness, but I wonder if it's worth $50 a month for a specific insurance plan that would pay out a lump sum ($50,000) upon diagnosis of a serious illness rather than touching my nest egg.

Well, Leanne, what harm could 50 dollars a month do? Maybe you won't get to see that movie in the theaters, but you can just rent it. If you go to the movies with a friend and you pay for both of you (not recommended), it could cost just as much as a month's worth of illness insurance! So basically, you would have to go 84 years before you've paid more than full coverage would get you. That should give you plenty of time to catch illnesses...
But anyways, insurances in general normally don't take too much away from your lifestyle, so they're definitely worth it even if you only get coverage one time in your life. Because, like they say, it's better to be safe than sorry. If you don't have insurance and your house gets burnt down, you still have to pay the mortgage for nothing! And 50 dollars for that much peace of mind? That's better than the insurance!
Until next time,


I Am a Millionaire!

I have 7,275,382 dollars! I am sooooo rich! But unfortunately, that's only in a Zambian Kwacha. In Canadian dollars that would be 2,000... But who wants to be able to say they have millions of dollars! EVERYONE! So check out this Currency Calculator and see how much money you can muster! Here is a link!
Just Click Here!
Become a millionaire at the click of a button ( you have to click it a few times though) and impress your friends with some amazing moniness!


Frugal vs Friendship Necklaces

Sorry I have not been able to post lately. I have been on the verge of death ( just kidding) and could not lift the laptop without needing to lie down, but I am feeling better now. So without further ado, I will type the rest!

Dear Mr. Munnybagz,

My wife and I have always talked about money with our two kids. Our son, 13, is quite good at managing his money. He chooses to bank everything he gets. Our 10-year-old daughter, however, tends to spend whatever she has on things like extra milk, pencil grips, and friendship necklaces. Do you have any tips for us? How can we teach our daughter to be more frugal?
Sincere regards,
A Concerned Father

Dear A.C.F,
How many pencil grips does one need? Anyways, this is a very easy problem to solve. If she's going to continue to waste money like that, you can put her allowance somewhere safe so she can't spend it. And explain to her that if she continues to spend money like that, she'll have tough times later in life. Also, give her more milk at dinner so she's not as thirsty... And one final piece of advice: if she really wants to buy those things, let her. After all, she's only 10. Not many kids have any money sense at all at that age. So she will learn when the time is right.
So until next time, wait until next time!


Guest Post: Credit Card Report Card

Hi. Munnybagz has been really sick for the last two days and he is sorry he has not been able to update his blog. He asked me to add a post for him. Seeing as how he was asked about credit cards on his radio interview with 1410 CFUN, I thought I would blog about credit cards.

Just like you need a good report card history to get into university, you need a good credit card history to be able to get money loans from the bank. But the only way to get a good "credit rating," as it is called, is to borrow money. So how do you borrow money without having a good credit history that lets you borrow money? You get a credit card.

Credit cards are given to students who don't have any history of having credit. These cards often have low limits. For example, someone who has over 10 years of a good credit rating may be able to have credit cards with $10,000 limits AND be able to get a $200,000 mortgage AND be able to get a $15,000 car loan... all at the same time. A student might only be able to get a credit card with a $2,000 spending limit on it.

Once you get a credit card, use it wisely, and pay it off every month, you will start to develop a good credit rating. Then the bank will know you are safe to lend more money or credit too. Eventually, your credit card limit will increase and you will be able to qualify for other loans, like a mortgage, a car loan, or a business loan. If you don't ever start your credit history the bank won't lend you the money when you are ready to buy your first home - just like the university won't let you in if you don't have your high school report cards.

BUT credit cards have very high interest rates and can end up costing a lot of extra money and stress if not used properly. Never put more on your credit card than you can pay off when the bill comes. You don't want a D- on your credit card report card. For more on Credit Cards from Munnybagz see Hey Kids - Do You Still Want a Credit Card?


F.F - F.F.F.A.F! - The Good Samaritan Salesperson!

Part Two in a Series: Free Fundraisers - Fun for Friends and Family!

We're back in action with F.F-F.F.F.A.F! This episode will not only be easy and profitable for charity, you... I can't think of a witty pun to put here... What I mean by helping out charities by being a salesperson is that you can sell products for someone else while helping out charity. The one thing you'll need? Someone you know who enjoys making crafts. Let's take what I did last summer for example. My mom's friend likes to make those really fancy cards with stamps and pop-outs and stuff, and then she sells them at a craft fair. But there was going to be a fair at a nearby park, and she heard I was selling pens at a table there, ( F.F - F.F.F.A.F! - Pennies for Pens!) so she asked me to sell her cards for her. 40 percent of the money I made went back to her, and 50 percent went to charity. The other ten percent? I gotta make a living somehow! But anyways, within a few hours, I had made 35 dollars for charity! As you can see, it's very easy if you have the connections. The best part about selling cards as your item is that people tend to buy lots of cards at once. If you don't know anyone who makes cards, there's always other things you can sell. And, like I said previously, always announce that most of the money goes to charity and that you are a volunteer.
So until next time, wait until next time!


F.F - F.F.F.A.F! - Pennies for Pens!

Part One in a Series: Free Fundraisers - Fun For Friends and Family!

If you know any white-collar workers (people who work in offices), ask them to take a box to their work, and put a sign on it saying, "Help our fund raiser for (your cause here)! Donate your pens!" Once you have quite a few pens, go to a big event (school fairs, Canada day fairs, anything), and ask if you can set up your pen sale on one of the tables. If you get accepted, put a sign with your pens. Make sure it's clear that ALL of the proceeds go to charity. Another great place to sell your pens to would be your classroom. People ALWAYS need pens or pencils there. Or even set up a stand during recess or lunch and make an announcement over the P.A. system announcing your sale. A good charity to send your pen money to would be a charity that supplies third-world countries with school supplies. For example, Red Cross, Unicef, World Vision, Save the Children Fund, etc. etc.

Stay tuned next week (or maybe tomorrow) for the next edition of F.F - F.F.F.A.F!

Free Fundraisers - Fun For Friends And Family!

It's always good when kids make money, like I've said before, to give back some of what you make. But it's even better to fund raise for a cause. That way, other people will be willing to donate to your charity through you. But sometimes you might have to deduct hundreds, or even thousands, of dollars from the money you raised to pay for starting cost! To prevent that from happening, here are some great fund raising ideas that don't cost a cent! Because each idea takes me so long to explain, I'm going to have multiples posts.


Kids Can Do It Too!

Did you know that people normally don't pay off their mortgages until they're almost retired? Eww! So what if you started earlier? Like, when you're a kid! I'm already saving for my first house, and have been for a few years! It's easier than you think...
Here are some steps to take to help you achieve a house by the time you're 15! (maybe later...)

  • Save at least 50 percent of what you earn! You really don't need that newest skateboard if your old one is a month old. Toys can usually wait until birthdays and christmas.
  • Babysit! Don't have enough time? Take your homework with you and do it while you babysit. Make sure you charge appropriate rates to keep the customers coming back!
  • Once you turn 14 and are legally able to get a job, do it! You don't really need 2 months to relax. Put all of that money towards your Big Purchase and use your allowance to spend.
  • In the end, if you can't afford to buy a house, then co-buy one with someone else. That way, it'll be a lot easier to pay off the house faster, but you'll still be a proud owner!

There you have it. Some people earn-to-own a house, and have it by the time they're 17! Just try really hard, save a lot, spend little, and you'll be an owner before your parents!


Finally - A Question has Come on Insurance!

Well, after quite a long delay I have received a question. So now... I write!

Dear Munnybagz,
My partner and I both work and we own a house. Since we are both well off, do we need life insurance? I just think it would be a waste of money.
Please respond!
Insurancely Challenged...

Dear Challenged,
Yes! Let's say one of you did indeed die. Sure, you would be able to survive off of what you make, but you wouldn't be able to pay for your mortgage all by yourself. All the things that took a joint effort to pay off like a car, a house, bills, all that taken out of one salary really hurts, and you wouldn't be able to maintain your standard of living. So let's say one of you got life insurance. But the other person died. Then you would still get nothing, plus you would have wasted money on insurance. So the best thing to do is get one life insurance plan that you can both put into, and it would cover both of you. That's the best way to ensure a painless-after-death situation.

P.S. I need more questions, because I can't write as much if I only can talk about non question-answering things...


Mortgage Magic II

We were asked yet another question about mortgages that I'm sure would really help anyone who knew the answers. Now let's get ready to rumble!

Dear Munnybagz,
I was just wondering if you could tell me how to negotiate a better mortgage, because I am sick of always having to pay off interest instead of the base mortgage. Please help me!
Mad at Mortgage

Dear Mad,
Although you may hate your mortgage rate, you have to realize that mortgages have the lowest interest in comparison to all the other loans. But there are a few tricks and tips that can help you get the best deals.
  • hunt around for mortgages at different banks or go to websites that compare mortgages.(such as mortgageshark.com)
  • when you're talking to a bank about a mortgage and you're not sure whether or not you're getting the best rate, ask them what they're best rate is, because you found a bank that gives a very good mortgage rate.
  • remember, banks always make money off your mortgage, no matter how little they charge. But the higher mortgage rate, the more they make, so if you tell them that another bank has 4.5 %, they will try to go better than that to get your business.

That should help you a little bit, Mad, and anyone else who wants a better rate. Stay tuned for our next episode, and send in your questions!