Archives for March 2016

Should You Co-Sign a Loan For Your Children?

March 30, 2016 | Leave a Comment

When I started university the way federal loans were issued in Canada was much different from how it is today. Long story short, I didn’t qualify for any form of student loans because, on paper, my mom made too much money. They didn’t care that she was a single parent, they looked at her income and the fact that my father should have been paying child support. It didn’t take long for them to change the system but it didn’t help me at all for my undergraduate degree.

I wasn’t not going to university so my mom took me to the bank and got me a student line of credit. Given at a decent interest rate (prime plus 1%). Only real downside was that my mom had to co-sign the loan. Student lines of credit (for the most part) are issued with the collateral being, well, my mom.

Should You Co-Sign on a Loan for Your Children?

I have to be honest I’m not sure I would have done the same thing as my mom. I don’t know what I would have done giving the constraints we were under but I don’t think I would ever co-sign a loan for my child.

My mom has nothing to worry about, I’m a good responsible child and despite our differences I would never default on the loan, forcing her to make the payments. Though I very well could do that, I wouldn’t. I also make sure I have the co-signed loans insured so if, God forbid, I die my mom doesn’t become automatically responsible for their repayment.

My best friends parents did something a little different. Rather than taking out student lines of credit in their names (the children), they (the parents) opted to borrow from their home equity (paid off mortgage) in the form of a home equity line of credit. This way the loans were never in the kids names despite the use being for their education. The kids were asked to sign a repayment agreement in the (very) off-chance they decided to skip town and not pay off their responsibilities. Though my friend borrowed over $20,000 for her education, the day she graduated, according to the bank, she was debt free.

I’ve known people who have needed their parents to co-sign mortgages for them. I would NEVER do this. If the bank doesn’t think my child can afford a mortgage based on their own financial situation I am not mixing myself up in it.

Whether or not you should or should not co-sign a loan really depends on the situation and people involved. I have seen seemingly perfect families ripped apart over monetary issues and I’m sure it’s not the last time I will. You need to protect yourself and your assets.

Though I would hope your child (ren) would never deliberately screw you over with a co-signed loan, it happens for millions of different reasons. While my situation worked in the aspect that I’m diligently paying off my loans, some students are unfortunate when it comes to getting a job and it takes years to pay them off, this debt continuing to follow the parents around.

Though I hope I am never in a situation where I would need to consider this, would you or have you co-signed a loan for your kids?

Catherine

Catherine is a first time momma to a rambunctious toddler. When she isn’t soaking up all that motherhood has to offer, you can find her blogging over at Plunged in Debt where she chronicles her and her husbands journey out of debt. You can also follow her on Twitter.

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The Difference Between Being Cheap and Being Frugal

March 23, 2016 | Leave a Comment

The other day two of my patients were arguing in my room while I was treating their daughter. The parents were arguing about their upcoming house purchase and what they needed to finish up before closing. The conversation quickly turned from excitement to a full-blown argument about how cheap the wife was. The husband wanted to buy all new furniture for one of their rooms while she wanted to use what they had for a while longer. Her argument was that she wasn’t cheap, but rather frugal, and had the family’s best interest in mind.

This differentiation is one that many people confuse. Though they may seem like similar terms, they’re actually quite different in their meaning. To help clarify the issue here are a few instances concerning being cheap and being frugal.

Dining Out

A cheap person may eat out frequently but elect to never tip. If you can’t afford to properly tip when dining out, don’t bother going, it’s cheap to not tip service.

A frugal person may elect to not eat out at all, or much more infrequently, as they would rather spend their money elsewhere. When they do make the decision to eat out they pay for everything, proper sized tip and all.

Product Selection

If a cheap person needs a new mattress for example, they will go out and buy the first cheap mattress they find, the deciding factor being the dollar amount. Even if this mattress falls apart in a few months they see nothing beyond initial dollars spent.

A frugal person will elect to not buy the mattress until they have saved up a dollar amount that will allow them to buy a quality product that will last them years. While they are saving for their upcoming purchase, they may elect to forgo other activities they don’t feel are as important as buying the mattress they need.

* This was the argument the wife in my office was trying to make. She didn’t want to buy the cheap couch her husband wanted but wanted to wait until the new year and buy a better quality one even if it meant moving into a brand new house with ‘crappy old furniture’.

Socializing

When it comes to socializing with friends and family, a cheap person may elect to go to events where they know (or assume) someone else will pick up the tab, or avoid going out, ever, because they don’t want to spend the money. This eventually leads to alienation from friends and family.

Someone who is frugal will go out but will likely be pickier about when and where they go but they won’t avoid socializing all together. They will also likely come up with alternative social ideas like taking turns hosting a nice dinner in, rather than spending money at a restaurant.

Frugality is a way of life. It can be very advantageous when used wisely and lead to many more opportunities in your life. Being cheap however usually ends up in wasted money and missed experiences. Only one of these ways of life knows the true value of a dollar earned.

Catherine

plungedindebt.com

How to Prepare the Babysitter For Your Trip Away Without Kids!

March 16, 2016 | Leave a Comment

We love going away with our daughter. In the four years since she’s been born we haven’t been apart for more than a quick overnight. We’ve always found ways to have her be a part of what we’re doing and had fun with it. In a few weeks though we will be taking our first adults only trip and leaving her for an extended period of time with a babysitter (in this case her aunt) while we’re out of the country. For the first time, we need to be much more prepared when we leave her.

Important Medical Information

Since we’ll be out of the country, and a six hour minimum flight away, should there be a medical emergency our babysitter will need access to her health information. Before we leave we will make sure our babysitter has a copy of our daughters provincial health card, medical insurance card should something happen that would require a prescription and our family doctor contact information. I hope none of this information will be needed but if an emergency arises having this information readily available will be one less stress for her.

Meal Ideas

Though our daughter is four, and can talk quite easily, I like to leave a list of meal ideas for the sitter to make her life easier. If my daughter had it her way she’d eat crackers and cheese with hummus for every meal. Also a few things she may request are made up words she uses to describe actual food. While I know what ‘’bunny pasta’’ is, the babysitter will likely have no idea!

A Schedule

We’ve never left her for long enough that someone would need to know how we like to manage her day. From wakeup times, to naps to bedtime. The sitter will need an idea of what to expect, and when. When parents aren’t around kids can easily manipulate their own schedule if left alone and keeping a kid, especially young ones, on a schedule will make everyone’s life much easier.

Special Instructions

Over the weekend that we’re away, our babysitter will need to take our daughter to her dance class. We’ll need to make sure she has all the info necessary to make sure she gets there on time and details like where her dance outfit is. I also need to let the school know someone other than her parents will be there with her.

Emergency Contact Information

Because we’ll be out of town I want to make sure our babysitter has a few local contacts in case of emergency or even if she just needs help with something. We’ll also want to leave the contact information of us, where we’ll be staying, as well as our flight information so she has an idea of when and where we’ll be.

Skype

Most importantly before we leave town we’ll need to make sure our babysitter has a Skype account so we have a little facetime with kiddo while we travel!

As much fun as we have when our daughter is around, a little adult-only time is necessary and this trip doesn’t have child-friendly events anyway (many late night events). As much as I dislike leaving her, I know she’ll have a super fun time with her aunt and probably not even notice that we’re gone!

What tips do you have when planning an out-of-town trip without kids?

Catherine

plungedindebt.com

One Parenting Skill Every Parent Should Master

March 9, 2016 | Leave a Comment

Parents love to see their kids happy. Especially during the tumultuous times of toddlerhood when their world doesn’t quite make sense, we like to see them as happy as possible. Being a parent is about caring for, and raising, confident, happy and well-rounded kids. To do this sometimes we have hard battles to contend with. One of the hardest parenting skills we have to learn to master is learning to say ‘No’.

Learning to say No isn’t easy but it is one of the best things we can do for our kids. The world we live in is not a world of ‘’yes’’ all the time. In my life I have certainly had more No’s told to me then Yes’s but I’ve also learned so much more from the no’s then the yes’s. It can be hard to watch your kids grasp the understanding of why we say no but they need to learn the importance of it.

I practice my balance of yes and no as often as I can. For instance when my daughter and I make one of our trips to the local dollar store, she will inevitably ask for something, a ‘’treat’’. Sometimes I say yes and sometimes I say no. Almost four years in, and she now understands that for a multitude of reasons she won’t get a treat every time. Sometimes it’s based on behaviour, sometimes it’s because I didn’t bring enough money, and sometimes it’s because I want to practice saying ‘no, we’re not getting a treat today’’ so she understands it’s not an event that will happen all the time.

Why We Must Learn to Say No

When we don’t master this skill, and don’t start early, we set our kids up for failure. Just last week I had two siblings come in to see me at work, aged 10 and 8. They both presented with malformations in their teeth and oral development that were indicative of sever thumb sucking. I asked the girls to which they denied sucking their thumb, I asked a few other questions before mom finally told me both girls were still using pediatric pacifiers every day, all day when not in school. Needless to say I was a little shocked and told both mom and girls that it had to stop immediately since their development was being seriously hindered by the object in their mouth.

I don’t know what I was expecting but I certainly wasn’t expecting mom to outright refuse to do it because ‘’she didn’t want to upset them in anyway and it was just easier to let them have it’’. All this after I explained the serious consequences (like not having any function of 8 permanent teeth and needing serious orthodontic treatment if they didn’t stop ASAP). I looked at her and said ‘’you’re the mother you need to step in and say No’’, a word clearly NOT in her vocabulary.

I hear so many horror stories of parents delaying their retirement or getting into a financial horror story from helping their kids out financially. So many times it seems like such an easy situation to avoid- just say no. I’m not saying we as parents shouldn’t help our kids out but if it put you in a bad situation you’re not actually helping anyone.

Learning to say no is a crucial lesson to teach kids. It helps set boundaries and protects them (and you too sometimes) from dire situations. In my opinion there are too many ‘’yes parents’’ out there, looking to fill some sort of void (maybe they work a lot or feel they put their kid in a tough situation with a move or something) regardless, saying yes too often will only have detrimental effects on both you and your kids.

How do you practice setting boundaries?

Catherine

plungedindebt.com

Have You Ever Considered Having a Mommy Card Made?

March 2, 2016 | Leave a Comment

I remember a few years ago reading about this new trend in the parenting world dubbed ‘’Mommy Cards’’. It’s a business-type card which contains all your basic mommy (or daddy) information for another parent/teacher/coach /babysitter to contact you.

Your name and who’s parent you are
Phone number(s)
E-mail address
Some versions also contain photos of you and/of the kids, parent’s social media contact info and other pertinent info about your kid like allergies.
Never put your home address with all this above mentioned information because it could become a safety risk if card were to be placed in wrong hands. Also all social media accounts should always be on highest privacy setting.

I have to be honest, I thought it was a joke the first time I heard about them. I’m not sure whose idea it was, a parent or a printing company looking to make more money, but the whole idea seemed silly and like a colossal waste of money. In the last few months though my tune is starting to change and I’m seriously considering jumping on the Mommy Card train.

Why I’m Considering Getting a Mommy Card

As my daughter begins to get involved in her own extracurricular activities, I find myself engaging in conversations with other parents. This past weekend I talked to two other moms while our daughters were in ballet class for over an hour. We started talking about mutual contacts and birthday party ideas for our kids’ upcoming birthdays. Because our kids aren’t in school yet the relationships they make are coming from places like dance class and soccer. I have my daughter asking me to invite her new friends to her birthday and I don’t even know the moms names yet.

Many times already I find myself looking for scrap paper to jot down my contact info to give to another parent for similar reasons. I’ve had a few of my daughters friends parents find me on Facebook and reach out to me that way but without knowing our last name or my email address this isn’t always possible. I’m already envisioning in a few years dropping my daughter off to a birthday party or other event where we’re not present and how much easier it would be if I had something like one of these parental contact cards to carry with me.

Don’t get me wrong, it’s not a big deal (at all) to jot down the info on a scrap of paper when needed, but having one of these cards makes the info just seem a little more important or something. I know I personally would be more likely to take care of a business card than I would a crumpled up receipt with a note written on the back.

As my daughter gets more and more involved in things, and gains more and more contacts of her own, I feel like these cards could play a part in my role as her mom and keeping as many contacts as possible. Are they a necessity? No, but sometimes the silliest of things, in this case a ‘’Mommy Card’’ can solve an easy problem.

Have you heard of Mommy (or Daddy) Cards before? What do you think of the concept?

Photo Credit: summer78 / 123RF Stock Photo

Catherine

plungedindebt.com