By Sheryl Smolkin

You are still paying off the credit card bills from Christmas. Your SPP and RRSP contributions have to be in before the end of February. You don’t have time to go to the mall and even if you did, you don’t have any idea what to buy.

Four years ago I posted Thrifty ways to romance your valentine. Since then I’ve had lots more ideas. So even if you were planning to stick with the traditional flowers and chocolates, consider some of these ideas as an add-on.

1.  Sign up for a class he/she has suggested that both of you to take together. It could be for anything from cake decorating to ballroom dancing to couples’ yoga.
2. Volunteer together at a local homeless shelter, food bank or even the SPCA. Doing something for others will help deepen your own relationship.
3. Pack a lunch with all kinds of goodies including a beautiful cupcake for dessert. Add a personal, humorous, handwritten note.
4. Load phone apps that will make life easier and teach your partner how to use them. Also add a romantic picture of the two of you as the wallpaper on his/her phone.
5. Rerun romantic movies that one of you may never have seen or that you saw together at a special time. Classic examples are: When Harry Met Sally, Sleepless in Seattle, Love Actually and You’ve Got Mail.
6. Binge watch on Netflix a season or two of a romantic show on a cold winter weekend and plan snacks that fit the theme. Tea and scones with clotted cream and strawberry jam would be a perfect fit for Downton Abbey.
7. Clean the house, make the beds and do the laundry, all without having to be asked. Give your lover coupons that can be redeemed at a negotiated time for future cleaning services.
8. Pick a pet together and bring the puppy or kitten home on Valentine’s Day. This assumes you both want a pet and it was just a matter of time until you added one to your family. A red collar and leash would be in keeping with the day.
9. Plan an active adventure. Take a hike; go skating on an outdoor rink and drink hot chocolate. Snowshoe through the park or toboggan down a hill. Winter is much more bearable when you embrace it instead of constantly trying to avoid it.
10. Arrange an unexpected visit with a loved one, i.e. a housebound senior, a new grandbaby or your youngest child who is away at college for the first time. Helping to bring lonely people together on or around Valentine’s Day will create unforgettable memories.

With the RRSP deadline a mere three weeks away, we’re providing you with some information that will make this time of year easier for everyone.

If you aren’t big on reading this early in the morning here is a video highlighting the same information. Links are below.

Wednesday, March 1 is the final day to contribute to your RRSP for the 2016 tax year. SPP contributions must be received at the office in Kindersley on or before that day.

There’s several fast convenient ways to make your SPP contribution in order to meet the deadline:

• Use your credit card at saskpension.com;
• Use your online banking service; or
• Call our office (1-800-667-7153) during regular business hours.
• Cheques can be mailed to our office; please make sure you mail them no later than mid February.
• If you are in the Kindersley area come visit our office and make your contribution in person.

The SPP balanced fund returned 6.53% in 2016. The short-term fund return was 0.52% in 2016. You are can see returns from prior years here.

You can reach us at in**@sa*********.com or check out our website:  saskpension.com.  Our wealth calculator can help you determine how long your money will last in retirement.

Thanks for your continued support of SPP.

By Sheryl Smolkin

One issue on our radar this week of concern to many Canadians is the possible change to the deductibility of health and dental care insurance premiums for tax purposes in the upcoming 2017 budget. Currently these premiums are not a taxable benefit if they are paid for by your employer and they are a deductible medical expense for individuals purchasing private plans to supplement provincial medicare benefits.

On December 2, 2016 a National Post article noted that the Federal Liberals are eyeing a tax on private health and dental plans, a move that would take in about $2.9B. Journalist John Ivison reported that proponents of eliminating the credit argue that those with lower incomes but without private health plans are subsidizing those with employee-sponsored coverage. On the other hand, he said there is a strong economic case for encouraging employers to provide health coverage for employees.

Later in the same month, a coalition of health care service providers warned of the potential negative implications of taxing the premiums paid on employer-provided health and dental benefits. Ondina Love, CEO of the Canadian Dental Hygienists Association said, “When benefits were subject to provincial income tax in Quebec in 1993, almost 20% of employers dropped their coverage, including up to 50% of small employers. This loss of coverage can significantly impact the lowest-paid employees who will have trouble paying for drugs, dental and needed health care out of pocket.”

And now a Conference Board of Canada report commissioned by the Canadian Dental Association calculates that millions of Canadians will each pay at least $1,000 more if Ottawa taxes health and dental plans . And according to the National Post, the potential exists for a massive political backlash. The Canadian Dental Association reports that 50,000 protest emails have already been sent to local MPs and Bill Morneau, the finance minister, through its donttaxmyhealthbenefits.ca online petition.

Let’s hope that Prime Minister Trudeau’s comments on February 2nd suggesting that his government doesn’t plan to tax employee health and dental plans as reported in Benefits Canada will put this issue to bed once and for all for the benefit of all Canadians.

In another health-care related story this week, Marie Engen at Boomer and Echo makes The Case For A Universal Canadian Drug Program. She correctly says that prescription drug coverage in Canada varies widely depending on where you live, your health status, your income, and your age. Right now, each province has its own pharmacare program and there is no consistency. A universal prescription drug plan could not only reduce total spending. It would also cover everyone at an affordable price.

Finally, in a post on Retire Happy, Sean Cooper tackles the question  Should You Take a Deferred Pension or the Commuted Value? He says many people go to their investment advisors to seek assistance on deciding what to do with their pension. But there is a clear conflict of interest.  “Your advisor can be a good source of information for deciding which funds to invest the commuted value in should you decide to take it, but at the end of the day the decision should be yours and yours alone,” he concludes.

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

In the first two months of every year financial institutions across the country advertise heavily encouraging every Canadian to open a registered retirement savings plan and make a maximum contribution.

And if you haven’t made all of your permissible RRSP contributions in earlier years you are an even more attractive target because chances are you have thousands of dollars of additional unused RRSP contribution room.

But in spite of the fact that I have been preaching the retirement savings gospel for decades, I agree with other pundits that there may be some circumstances in which it doesn’t make sense for you to top up your RRSP. For example:

1. Low marginal tax rate: If you have a low marginal tax rate, you may be better off saving in a tax-free savings account or other non-registered savings and wait until you are earning more money to use up your RRSP savings room (which can be carried forward). Of course you could make the RRSP contribution in a year of low earnings and wait until a future year when you are more affluent to take the tax deduction.
   

2. High interest debt: If you are carrying high interest credit card or other debt, your priority should be to pay off that debt as soon as possible to avoid further interest compounding. Then put controls in place to avoid getting into further debt. Once you have retired the debt, the additional cash flow can be used to make tax deductible RRSP contributions.
   

3. Short -term goals: If you have high priority short-term objectives such as saving a down-payment for a house, funding your education or taking a family vacation, a TFSA is a more flexible savings vehicle. Your TFSA contributions accumulate tax-free. All or part of the balance can be withdrawn without tax consequences. And contribution room in the amount you withdraw will be restored the following year.

4. Higher retirement income: RRSP contributions are most tax effective if you make them at a time when you are in a higher tax bracket but you have a reasonable expectation that your income in retirement will be lower when you must convert your RRSP account into a RRIF and begin withdrawing funds. However, you may live frugally and build a business in your prime working years. As a result, by the time you retire your income from money in the business, registered and un-registered funds is higher than prior to age 65.
   

5. Great DB pension plan: Contrary to what you may have read, the defined benefit pension plan is not completely dead in Canada. For example, a small number of employees of private companies, federal public servants and some provincial employees will have generous monthly pensions when they retire. In these circumstances having a large taxable income in an RRSP maybe a great idea if RRIF withdrawals push your annual income over the threshold and as a result your Old Age Security is clawed back ($74,789 in 2017).
   

6. Business owner: Unlike employees, incorporated business owners can control their compensation. If corporate income is not needed for personal living expenses, for example, it can be retained in a corporation to defer income taxes. The tax cost of withdrawing dividends (in retirement) could be significantly lower than the tax cost of withdrawing RRSP or RRIF dollars, which are be fully taxable.

Nevertheless, for all but a small number of people who fall into the categories above, an RRSP is a splendid idea. And consider using some of your RRSP contribution room to contribute to the Saskatchewan Pension Plan (up to $2,500/year) or transferring in up to $10,000/year to the SPP from your RRSP. Your money will be professionally managed and at retirement you can purchase an annuity that will pay you for life.

By Sheryl Smolkin

The thing about January is that everyone is either trying to get physically, mentally or financially fit, although some people are closer to the end game than others. Here’s what some of our favourite bloggers wrote about saving money and reaching other goals in 2017.

In How to Save Money on Groceries: 10 Easy Ways to Cut Your Bill in Half Tom Drake gives the usual advice, such as make a list and stick to it, try private label brands and buy case lots of products you use regularly. But he says you can also kill two birds with one stone by eating less so your grocery bill goes down.

Stephan Weyman says one of the reasons he shops at Costco is the company’s “no questions asked, crazy return policy.” For example, the company took back a three year old recumbent bicycle that broke down two years before and he got a $500 refund. He has also successfully returned a bicycle purchased for his wife that turned into a garage ornament for $200; cushioned floor mats, and frying pans that were supposed to be professional quality and didn’t hold up.

On Give me back my five bucks, Krystal says her primary 2017 goals are to have a fun year full of travel and adventure. She plans to stay debt free and continue to save save at least $1,650/month in her RRSP/TFSA. She also resolves to curb impulse spending, continue to be active and keep in better touch with friends.

Cait Flanders (formerly Blonde on a Budget) who paid off her $28,000 of debt in two and a half years and in July 2014 completed a year- long shopping ban, plans to make 2017 the year of slow living.

Each month, she is going to experiment with slowing down in one area of her life. Some of the different things she will experiment with are: slow food, slow mornings, slow evenings, slow movement, slow technology and slow money. “The only thing I won’t do is make a list of what I’m going to work on each month. If I’ve learned anything over the past few years, it’s to trust my gut,” Flanders says.

And finally, Tim Stobbs has documented progress towards his early retirement goal on Canadian Dream: Free at 45 for several years. He hopes 2017 is the last year of his full-time working career. However, he is beginning to notice a new emotion in the people around him: fear. He gets the usual well-meaning queries like:

• Are you sure you have enough saved?
• What happens if you don’t get a part time job?
• What will you do with unexpected expenses?
• Maybe you should work just one more year?

But Stobbs figures the worse that can happen is that he will have to go back to work for a few years. “I fully admit I may not have enough saved to head into semi-retirement,” he says.  “But I don’t want to live a life based on fear of the unknown.  I’m willing to try out something new and see what happens. “

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

Making maximum annual available contributions to Saskatchewan Pension Plan plus your Registered Retirement Savings Plan and Tax-Free Savings Account will help to ensure that you have the retirement savings you need to support yourself once you leave the world of work.

However, there probably have been years when you have not been able to make the full available contributions. But fortunately, both RRSP and TFSA contribution room can be carried forward, so if your financial circumstances improve in future or you get a windfall like an inheritance or win a lottery, you can catch up.

Here is some information about 2016 and 2017 contribution limits plus how you can find out whether you have contribution room that has been carried forward.

1. SPP
   You can contribute up to $2,500 a year to SPP. In order to do so, you must have RRSP contribution room (see below). SPP contribution room cannot be carried forward if contributions are not maxed out each year. You can also transfer up to $10,000/year from your RRSP to SPP. Again, this transfer limit cannot be aggregated and carried forward to future years.
   

2. RRSP
   The RRSP deduction and contribution limit is 18% of your earned income to a maximum value each year. The maximum RRSP contribution limit for 2016 is $25,370 and for 2017 it will be $26,010. Unused contributions are carried forward each year, so if you didn’t maximize your RRSPs in previous years, you can add the unused amount to this year’s limit. RRSP contribution room is not restored in future years if you withdraw funds.

You can find out how much RRSP contribution room you have by going to:

• The “Available contribution room for 2016” amount found on the RRSP/PRPP Deduction Limit Statement, on your latest notice of assessment or notice of reassessment
• Form T1028, Your RRSP/PRPP Information for 2016. CRA may send you a Form T1028 if there are any changes to your RRSP/PRPP deduction limit since your last assessment.
• My Account
• MyCRA mobile app
• Tax information Phone Service (TIPS)
  

3. TFSA
   Since the Tax Free Savings Account (TFSA) was introduced in 2009, Canadian residents over the age of 18 with a social insurance number have been permitted to contribute on annual basis. Here are the contribution limits by year:
   • 2009-2012: $5,000
   • 2013-2014: $5,500
   • 2015: $10,000
   • 2016: $5,500
   • 2017: $5,500.

If you are setting up a TFSA for the first time in 2016 you can contribute up to $46,500 (or $52,000 if you want to also make 2017 contributions). Withdrawals are permitted and the amount you take out can be re-contributed in the following year in addition to the $5,500 allotted for the next year plus any other carry forward of TFSA contribution room you may have.

Keeping track of available TFSA contribution room is important because if you over contribute, anything over the allowed tax free contribution room is subject to a 1% penalty charged on a monthly basis on the highest excess tax free savings amount.

You can also obtain information about your TFSA contribution room using the My Account feature offered by the Canada Revenue Agency. Another option is to call the CRA Tax information Phone Service (TIPS).

By Sheryl Smolkin

Here we go with another series of video blogs that will help you to organize and manage your finances. Some of them are not recent, but they have definitely withstood the test of time.

In Budgeting Without Losing Your Mind, Young Guys Finance says budgeting doesn’t necessarily mean punishing yourself so you can’t spend any money. Instead he vues budgeting as an awareness tool that will help you to identify what you are spending money on and cut back on what you don’t really need.

Because Money, co-hosted by Financial Planner and opera singer Chris Enns, interviews Kyle Prevost from Young and Thrifty. Join them for a rousing trivia game that is impossible to win and find out how hard it really is to get financial literacy into the high school curriculum.

When you tune in to a Freckle Finance video for the first time, you will quickly understand why the presenter has adopted this unusual handle. In this episode she explains what a GIC is and how it compares to other investments.

At the end of the year, Rob Carrick from the Globe & Mail took a look at which financial institutions have the best deal on high interest savings accounts. However, be forewarned – it’s still slim pickings out there!

And finally, if you want to figure out how much you are really worth, tune in to How to calculate your net worth with Bridget Eastgaard from Money after graduation.

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

It’s registered retirement savings plan season again and media ads from financial institutions encouraging you to open a plan and invest in their products are running 24/7. But you are really not sure whether you should opt to save your hard-earned money in the Saskatchewan Pension Plan, an RRSP or a tax-free savings plan.

There is not a single answer that will meet the needs of every individual or their family. You may opt to split your savings among the three types of plans in order to meet different savings objectives. But the fact is that SPP is the ONLY one of these three types of registered plans that has a single purpose:

“To help you save money exclusively for retirement.“

You can withdraw money from your RRSP and pay the taxes in your year of withdrawal, but when you do take money out, that contribution room is totally lost to you. You can also take money out of your TFSA and your contribution room is restored the following year. However, every time you withdraw money you interrupt the tax-free growth of your contributions plus investment earnings.

SPP is a locked-in pension plan which means your account must stay with the Plan until you are at least 55 years old. In the event of your death, the money in your account will be paid to your beneficiary. Within six months of joining SPP, you can withdraw your contributions if you decide that you do not wish to participate in the Plan. After six months, the funds are locked in.

SPP follows the same income tax rules as an RRSP except that SPP is locked in. Under tax rules contributions to SPP can be used as repayments to the Home Buyers Plan (HBP) and the Lifelong Learning Plan (LLP). However SPP withdrawals are not permitted for this purpose. A taxpayer can designate all or part of the contribution as a repayment on Schedule 7 and file it with their tax return. SPP does not track repayments to the HBP.

The plan is designed to be very flexible and to accommodate your individual financial circumstances. Even contributing $10 per month will build your SPP account and provide you with additional pension at retirement. The maximum contribution is $2,500 per year subject to available RRSP room and there is no minimum contribution.

Transfers into SPP from RRSPs and unlocked RPPs of up to $10,000 a year are also allowed and spousal contributions are permitted. Contributions you make to a spouse or common-law partner’s account reduce your RRSP deduction limit. The total amount you can deduct for a given tax year cannot be more than your RRSP deduction limit. Contribution and PAC forms have a section to designate contributions for spousal deduction.

Between the ages of 55 and 71 when you opt to retire, one of the options available is to transfer to the amount in your SPP account to either a Prescribed Registered Retirement Income Fund (PRRIF) or a Locked-in Retirement account (LIRA) with another financial institution.

You can also select an annuity option. The amount of your monthly payment will depend on which annuity option you choose, your age at retirement, your account balance, and the interest and annuity rates in effect when you retire. SPP can provide a personal pension estimate for you if you call the toll-free line at 1-800-667-7153.

*****

It’s been six years since I started working with SPP and wrote my first article about the plan. I joined SPP and have transferred $10,000 in every year since. According to my June 2016 statement I had $80,140.74 in my account. By the time I am 71, I hope to have a total of about $150,000 in the plan. I like the low fees (1% a year or less) and that my money is professionally managed.

In five years I intend to purchase a joint and survivor annuity to provide a guaranteed monthly payment for my husband’s and my lifetime. This stream of income will provide further income security as we age in addition to our other pension income.

We also have other registered and unregistered savings which we can use for a variety of purposes including funding an estate for our children. But I’m pleased that that over a 30 year period the average SPP balanced fund return has been 8.10% and as of the end of November 2016, balanced fund YTD returns were 5.29%.

If you want to fund a pension that will be there when you need it most, check out SPP or top up your SPP savings. Then allocate the balance of your savings for next year to other available accounts.

You will be glad you did. After all, no one wants to put all their eggs in one basket!

By Sheryl Smolkin

With Brexit, the election of Donald Trump and the stock market’s long bull run in 2016, the big question everyone is asking is what is in store for the Canadian economy in 2017?

Well, it depends who you ask and on what day. Here are a few recent predictions in the mainstream media, which may or may not pan out. You be the judge.

Not surprisingly, there’s one risk that “Trumps” them all for Canada’s economy in 2017, said Royal Bank Chief Economist Craig Wright in early January at the Economic Outlook 2017 event in Toronto.

The impact of U.S. growth on Canada depends on the policies that are put in place across the border under President-elect Donald Trump, but at a minimum Wright noted the U.S. is headed in a more competitive direction, while Canada seems to be moving the other way. “So it’s not yet clear whether Canada will see a ‘Trump bump’ or perhaps a ‘Trump slump,'” he told iPolitic reporter Ainslie Cruickshank.

The Financial Post reports that the best loonie forecaster in the world believes the Canadian dollar will beat all its G10 peers this year. The loonie will nudge an additional 0.75 per cent higher to 75.75 US cents by the end of the year, according to Konrad Bialas, chief economist at Warsaw-based foreign-exchange broker Dom Maklerski TMS Brokers SA, who topped a Bloomberg ranking of Canadian dollar forecasters in the fourth quarter. That would extend the loonie’s three percent gain from last year, which made it the best performer among its Group-of-10 peers.

In the Globe and Mail economist Todd Hirsch makes a series of bold (and some not-so-bold) predictions for Canada’s economy in 2017 and beyond. For example:

1. Canada-U.S. trade disputes will intensify.
2. The Canadian dollar will dip below 70 cents early in the year, but finish 2017 at 78 cents.
3. The Keystone XL pipeline will get Washington’s approval.
4. And for sports fans, Montreal will win the Stanley Cup; University of Calgary Dinos will win the Vanier Cup; and, the Winnipeg Blue Bombers will win the Grey Cup.

On CBC News, Paul Evans offers the following  five reasons why Canada’s economy is looking up in 2017.

1. The job market is recovering.
2. Oil could be headed higher – finally.
3. Despite of predictions to the contrary, the loonie could be headed higher.
4. Trade is picking up.
5. The TSX is near an all-time high.

Nevertheless, analysis from the Centre for Economics and Business Research (a UK think tank), published in co-operation with Global Construction Perspectives says Canadawill have the world’s 10th largest economy in 2017, but will be overtaken in a few years by South Korea.

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

Today I’m interviewing Alexander Fung for savewithspp.com. In 2015 Alexander graduated from the Goodman School of Business at Brock University where he studied corporate and personal finance. He has worked as an analyst at Scotiabank and Fidelity Investments Canada. But first and foremost, he is an entrepreneur and app developer whose mission in life is to help parents raise money smart kids.

His app Dollarwise was awarded third place at the Canadian Personal Finance Conference and second place at the International Payment Conference, both held in Toronto.

Thanks for talking to me today Alexander.

Hi, Sheryl, thanks a lot for having me.

Q: You participated in The Founders Institute Program from January to June 2016. Can you tell me about the program and what you learned?
A: The Founder Institute is the world’s largest pre-seed accelerator in the world based in Silicon Valley. The purpose is to validate business ideas and then actually launch a product that helps provide some value to users. I was one of 17 people who graduated in the Toronto cohort out of about 65 companies that entered.

Q: Why do you think that parents often don’t teach their children good money habits?
A: Honestly, it’s a bit of a taboo topic. I know that as I was growing up my mom and dad hardly ever talked to me about money. Theythink kids should just be focused on school and that’s it, but in reality money is crucial in every person’s life – whether you’re saving for a wedding, saving for a vacation or buying presents for parents and family members. Money is such an essential subject to understand.

Q: Why did you decide to develop a tool to help parents and their children improve financial literacy?
A: When I was eight years old. I decided to use my cash allowances to buy myself a video game without my parents’ permission. When they found out, they were absolutely furious. What I learned from that experience was that I made an irrational decision and I should’ve talked to them about it before making the purchase. So, that event really motivated me to study finance and work in the industry.

Q: Let’s say traditionally parents give kids a cash allowance, and require that the money be used in a specific way, i.e. 25% for charity; 50% for expenses like bus fares and lunches; and 25% for fun. In your view, why isn’t this simple approach good enough?
A. The problem with a cash allowance is that it’s really hard to track. For example, a parent says, “Hey John you can’t spend more than $20 on transportation.” But the kid might not comply and parents can’t keep them accountable.

Also, when you use cash allowance sometimes kids lose the money and it’s gone. When it’s misplaced, it’s gone forever really. Whereas if you use a debit card and you lose it, you can call your bank and they can lock it and your money is safe. So it’s that accountability and keeping track of kids’ behaviors that money can’t really provide.

Q: Tell me about Dollarwise and how exactly it works.
A: Dollarwise helps parents to teach their kids good money habits using a debit card and a mobile app. But unlike a traditional bank we want to make it fun and educational. We’re in discussions right now with institutions that have parents and families as clients and/or members, and we want to help them to provide more value to their clients.

Q: But how does Dollarwise itself work? What does it do?
A: It’s an application where parents are able to set up their assigned list of chores for kids to complete, and they can assign dollar values. When the kids open the app they see the list, they can complete tasks, and when their parents verify that the job’s well done, the money can be transferred into the child’s account. The application also allows children to set saving and spending goals for themselves, see where their money goes and see rules established by their parents.

Q: What’s the value proposition for families?
A: Parents are able to save time, build better relationships, and avoid costly mistakes that the kids may make. When I was growing up I got a cash allowance at infrequent intervals and I usually spent it right away.

Q: So let me get this straight then. The parents can enter data about how much they are going to pay for tasks assigned to the child and  how money can be spent. Then the child can go into the same app, and see what their parents want them to do and check off a task once they have done it. Is that correct?
A: Yes. And when the task has been properly completed the real money actually goes into the child’s bank account from the parents’ account.

Q: What’s the value proposition for financial institutions here?
A: We believe Dollarwise will help institutions attract and retain clients at a lower cost.

Q: How does the program help both children and their parents set goals and track how the child spends money?
A:  Let’s say John sees a pair of shoes that he wants at Footlocker, but he doesn’t have enough money. Typically what he would do is keep nagging his parents until they give him money to buy his shoes. Or he can set a goal using the Dollarwise application that records what he is saving for, how much it will cost and how much he is planning to save each week. And his parents are able to open the application to see his goals and monitor how he is doing.

Q: You’ve noted on the website that the children are recognized for having good and consistent behavior with your unique badge and star system. How does that work?
A: Parents can customize some of the badges the app will award based on their children’s individual goals and achievements.

Q: What kind of tools does each child require to use the app?
A: Actually all they need is a debit card. They don’t necessarily need a phone. When they get home they can always log on to the computer or their iPad to see their progress. But parents  usually have phones so they can set the goals, set restrictions and send money to their kids’ accounts.

Q: What kind of debit card are they going to get? Will they get a debit card from a specific financial institution?
A: Absolutely. The original plan was to issue our own debit card, but we learned it is too expensive and doesn’t make economic sense. Institutions will just issue their own debit cards to the kids and to the parents.

Q: Have you tested the program with parents and kids? How do they react?
A: Within six months we’ve tested our app on over 300 parents and kids. After our fourth revision feedback has been a lot more positive. They absolutely love it. Some parents told me that their kids have  asked them if they could do additional chores around the house so they can earn more money to save and buy something they actually want instead of begging their parents for more money  to buy stuff.

Q: If a parent wanted to purchase a program today where could they buy it?
A: Right now we are in the testing phase. If they wanted to sign up they could go to our website at Dollarwise.co and just hit the “subscribe button,” give us their name and email, and someone on our team will follow-up with them.

Q: But if you don’t actually have a relationship with a financial institution yet, how can you issue debit cards?
A: Right now we’re testing the prototype. So they can’t use the application right now, but they get the prototype and they can see how it looks and how it feels.

Q: How much are you going to charge parents?
A: It will be free for parents and kids. Financial institutions will pay us for a white label version of the app to which their own branding can be added.

Well, that sounds really interesting. I wish you luck. Thanks for talking to me today, Andrew.

Thank you so much Sheryl.
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This is an edited transcript of a podcast interview recorded in December 2016.