Summer jobs, student spending, and the Canadian Emergency Student Benefit (CESB)
Never Retire Profile of the Week
Jack Nicklaus
Having recently turned 80, Jack Nicklaus is a legend in the golf world known as much for his passion and relentless pursuit of excellence as his blonde locks and fluid swing. Since turning pro in 1961, the Columbus, Ohio native won a record 18 major championships, including the Masters in 1986—at age 46—to become the tournament’s oldest ever winner. Nicklaus also secured a total of 73 PGA Tour victories. As his professional career as a golfer was gearing down and he transitioned to playing on the Champions Tour, Nicklaus became head of what has become one of the largest golf course design companies in the world. He is also a bestselling author whose instructional book Golf My Way is widely viewed as one of the best of its kind. Fortunately for golf fans and players around the world, The Golden Bear never retired.
I’ve always felt that financial lessons are life lessons. That’s been a guiding belief of my career and my parenting. I view interactions with my children around money as opportunities to support their growth, share insights, and help them establish a solid foundation as they launch their own lives.
My two sons are already in the working world, but my daughter is still immersed in her journey as a student. As I did with my sons, I have an agreement with her about summer employment and how those earnings will be used during the school year.
For the last three years, she has worked as a counsellor at the Upper Canada College summer camp where she was also a camper. It’s an incredible camp. I wish I could go.
My daughter works in the hockey program for 10 to 14-year-old boys and girls. They spend half the day on the ice and the other half swimming and playing other sports like basketball and soccer.
She loves it and has made so many great friends there. It’s also right in our neighborhood, so she can walk or ride her bike to work. It’s a perfect arrangement.
The agreement she and I have related to her earnings is two-fold.
First, I am helping her learn the “pay yourself first” approach to savings by having her set aside 10% of her earnings up front. I’m also helping her learn the basics of investing. With my help, she picked a company she was interested in and invested in their stock. (She chose Alphabet, Google’s parent company.) Each fall, she takes 10% of her summer earnings and buys shares. She then monitors the progress of the stock during the year and sits through occasional conversations with Dad about how the markets are doing. (That’s what I call quality father-daughter time!)
Second, to help her learn to budget, she uses the rest of her summer earnings to cover personal expenses during the school year, such as Starbucks coffee, clothes, haircuts, parties, books and TTC fares.
I’ve been really pleased with how this approach has helped her learn some important financial lessons while also learning things about herself. Having to decide how to spend your money is also an important exercise in figuring out what really matters to you. Her experience is similar to what my sons went through. They both report that those early lessons with money helped them establish a solid base for their current financial knowhow.
As we are all acutely aware, summer 2020 has thrown a pandemic-sized wrinkle into my daughter’s financial life. Like most camps, UCC has decided that it is neither practical nor safe for them to operate this summer. It’s a decision being made at day and residential camps across Ontario.
While she processes the disappointment of her summer job disappearing, I am trying to think through how our financial arrangement will be structured this year.
She and I have already agreed that if she isn’t working, she will take at least one online course that helps her prepare for her upcoming first year at university. But what will we do about her ongoing financial education?
The Federal Government has created the Canadian Emergency Student Benefit (CESB) program. It applies to students from my daughter’s age up to recent graduates of a post-secondary program.
The benefit (explained in detail below) provides $1,250 for each four-week period between May and August 2020. In her case, because she is currently wrapping up high school, she will be eligible to receive the benefit for June, July and August.
She and I have already talked about her annual investment of 10%. But how will we approach her personal expenses at university? First of all, we don’t know exactly what her spending will look like. Also, this summer, she will bring in less than she would have earned as a counsellor.
If I make up the difference in her income, will I create a dynamic where she thinks I will always bail her out of financial challenges? Will I undermine her learning?
I also worry that the government grant will seem like free money. But I’m not sure what to do about that. Would there be benefit to talking with her about the larger economic issues at stake, or is that asking too much of a young person? For example, does it matter to her to understand what a government deficit is and to know how that impacts future taxes and spending? Or am I just whistling in the wind if I try to talk to her about the fact that this money is really more like a loan? (Talk about not-so-quality father-daughter time!)
These are issues I am grappling as she transitions from camp counsellor to CESB recipient.
For those of you in a similar situation, I’d love to hear how you are resolving these issues. It’s just one more in a long series of major challenges with the COVID-19 situation.
If your children or grandchildren are eligible for the CESB, here’s a summary of the nuts and bolts of the program.
Canadian Emergency Student Benefit (CESB) Overview
The benefit is available to post-secondary students, recent post-secondary graduates, and high school graduates who have been unable to find work due to COVID-19.
The benefit provides $1,250 for each four-week period between May and August 2020.
In order to qualify, a student must:
- Be enrolled in a post-secondary program; have completed a post-secondary program after December 2019; or expect to get a high school diploma in 2020 and have applied for a post-secondary program that starts no later than February 1, 2021.
- Be actively looking for work (if able to work).
- Not be receiving Employment Insurance or the Canada Emergency Response Benefit (CERB).
Some important things to keep in mind re the CESB:
- CRA will only verify if the student qualifies for the grant after the fact. (That means there is a possibility the student will be asked to return the funds to CRA if they are later deemed to be ineligible.)
- If CRA seeks to verify a student’s eligibility, they may be asked to provide supporting documentation later.
- Students must re-apply for each four-week period if they were unable to find work.
- The CESB is taxable. If a student is earning money during the year (as an intern or through a part-time job), they should determine if their income will be such that they will owe income taxes next spring.
A student can apply for the CESB by:
- Calling CRA’s toll free number at 1-800-959-2019. (They will need their Social Insurance Number (SIN) and postal code to verify their identity.)
- Accessing their CRA My Account if they have already signed up for one.
For additional information, visit the government’s website on the subject.
Did this article resonate with you? What did I miss? Send me a note and let’s start the conversation.
The process of finding an Advisor can be overwhelming. Our process is designed with you in mind. Its structured framework helps you make an informed decision about engaging an appropriate advisor.
Call me if you in want to map out how you can Never Retire. You can also subscribe to our Never Retire Newsletter, contact us to order a complimentary book, register for one of our events, and call us to meet with a Certified Financial Planner. We offer you a range of services from a financial plan to investment advice or helping you take advantage of our investment models. Call me at 416.355.6370 or email me at richard.dri@scotiawealth.com.