CESB explained

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Until last week, very little financial relief was available to students. In March, the federal government announced a 6-month moratorium on federal student loans. Anyone with such loan is not required to make any payments until October. Interests won’t accrue during that period either.

That was about it. The majority of students doesn’t qualify for CERB or EI benefits. Last Friday a $9 billion student aid package was approved by the Senate, including funding for the Canada Emergency Student Benefit or CESB.

Let’s take a look at this new benefit.

General info

The benefit amount is $ 1 250.00 per month or $ 2 000 for students with a disability or dependents. It will be paid from May to August.

The program is administered by Canada Revenue Agency and applications will need to be made on their website.

At this stage, it’s unknown whether this benefit is taxable or not.


To receive the benefit you need to:

  • be enrolled in a post-secondary education program leading to a degree, diploma, or certificate; OR
  • be a graduate in December 2019 or after; OR
  • be a high-school graduate who will be joining a post-secondary program in the coming months; AND
  • Not receiving any income of any kind. If you’re working, you’re not eligible. If you lost your job due to Covid-19, apply for CERB instead; AND
  • Be looking for a job. This was a requirement from opposition to pass the bill.

Please note the words “or” as well as “and”. They’re crucial.

Other measures

In addition to CESB, the federal government has also announced the following:

  • doubling the Canada Student Grants for F/T students to $ 6 000/year; P/T students: $ 3 600/year.
  • increasing the maximum amount on federal loans to $ 11 900/year
  • suspending the fixed student contribution amount for 2020/2021- $ 1 500 to $ 3 000-
  • creating the Canada Student Service Grant for students who volunteer in specific sectors this Summer. Amount from $ 1 000 to $ 5 000, depending on number of hours.

Final word

All the details for this aid package are not available just yet. We’ll update this post when we know more.

It’s a good thing some help is on the way for students. Unlike Europe, tuition fees in Canada are sky-high. The average student loan debt for a graduate student is $ 28 000….

Opportunity cost

Image result for heriot watt malaysia

If you are a reader of the blog, you know I decided to obtain an MBA. I have been studying for almost a year now.

Last September, an opportunity came across to study for a semester on the Malaysian campus of my university. After careful budgeting, I decided to accept it.

I have been in Malaysia since January, and it has been a bliss! To get the financials out of the way, the semester is all paid for. It was paid by my personal savings as well as an insurance settlement. I would also like to add that I don’t have any consumer debt, which made it easier as well.

In total, I spent a little over $22K. Since becoming consumer-debt free, retirement has been front and center on my mind.

I had been thinking about transferring $ 20K to my RRSP. Well, it is not going to happen. At least not yet. Why? Because I chose to go to Malaysia instead.


This post is totally related to a concept that I am currently studying in Economics: opportunity cost. It is defined as ” the benefit that is missed or given up when an investor, individual or business chooses one alternative over another”.

In my case, the opportunity cost is the benefits foregone by not contributing to my RRSP. These are: big contribution that would most likely have triggered a bigger tax refund; tax refund that I could have put back in my RRSP; additional dividends and interests; long-term compounding on the latter.


Being a PF blogger, I obviously had to talk about the monetary side. But there are other aspects to opportunity cost, such as time, pleasure or usage.

To go back to my own example, the benefits of going to Malaysia outweigh the opportunity cost of not contributing to my RRSP, including in the long-term.

The truth is that I hadn’t been doing well or feeling well for some time. Last year was difficult. It was the culmination of a few years of growing dissatisfaction with my life. I felt very stuck with no idea of how to unstuck. I was also plagued with health issues.

I needed a substantial change, but not necessarily a drastic one either.  I needed to step-out of my comfort zone for an extended period of time. Being in Malaysia definitely brought me that and much more. My health issues are gone, primarily because my lifestyle here is very different from my lifestyle Canada. I intend to bring it  back with me, as much as possible.

I have a totally different perspective on my life, on Canada and on myself. Contributing to my RRSP would not have given me any of the above…..


Opportunity cost happens to all of us on a daily basis. Most of us are probably unaware of it. We all make choices. There is always an opportunity cost behind our decisions, no matter how trivial these decisions are.






How to take free classes via MOOC

One of my plans for 2016 is to figure out my next career move. I have been thinking about it for a year or so. I have explored different fields such as Education, Financial Planning and Project Management. I took a few classes, but none of these options really appealed to me, as a career.

Recently, I finally figured out what I wanted to do….sorry I won’t share further info for the time being. This project is only at very early stages and nothing is done yet.

In order to be successful, I need to further my education. I have been thinking -and researching- about getting an MBA. MBA’s in North America are very expensive. In Canada, it costs anything between 25K to 100K for Executive MBA’s.

Needless to say, I don’t have that kind of money lying around. I was considering getting into debt again to finance an MBA. I have done it in the past when I got my Accounting Diploma, and it was worth it, as my career took a new turn and my earning power drastically increased.

Then, I took a much needed vacation to France and it really put things into perspective. I realized that I don’t necessarily need an MBA, but also, that, after doing further research, I can take free classes via MOOC.

MOOC is the acronym of Massive Open Online Courses. The concept aims to make education very affordable and accessible. Because classes are free and online, anyone can register, regardless of background.

Subjects are infinite, from science to business, philosophy and foreign languages. Classes are taught by top universities such as Harvard.

You can create your own curriculum that mirrors the degree you would like to obtain. The downside is that you don’t actually obtain a degree, but it doesn’t mean you won’t be employable.

I have decided to tailor my classes to what I want to do and to only take the courses I will actually need.

I am really excited about this and can’t wait to get started!

RESP basics

As I mentioned in previous entries, the cost of post-secondary education keeps increasing and can really be a huge financial burden for a lot of students and their parents.

As a parent, the best way to help your child is to open a Registered Education Savings Plan or RESP. Opening an RESP is actually not just limited to parents. Other relatives can open an account, such as grand-parents.

The account is registered with Canada Revenue Agency. Any interest earned is tax-free, until the money is withdrawn by the student. Since students usually don’t pay income tax, it is pretty much at no cost.

The contributions are not eligible for tax deduction purposes but they give access to the Canada Education Savings Grant -CESG-, and if you qualify, to the Canada Learning Bond -CLB-. The contribution limit is $ 50 000 per beneficiary. There is no annual limit. An account can stay open for 36 years.

The CESG is based on 20% of the contributed amount, for a maximum of $ 500 per year, until the child turns 17. Let’s say you contribute $ 1 000 to the account. The CEGS will be $ 200. If you contribute $ 5 000, it will be $ 500. The CESG amount is capped at $ 7 200.

Depending on your income, you could qualify for the additional CESG, i.e. $ 50 or $ 100 per year, based on a $ 500 contribution. It is also possible to carry forward unused CESG amounts.

Families receiving the National Child Benefit Supplement -known as Family Allowance-are eligible for the Canada Learning Bond. The CLB is $ 500, as well as an additional $ 100 per year for as long as the family receives the Allowance, and until the child turns 15. The maximum CLB amount is $ 2 000. Not all RESP providers offer accounts allowing the CLB.

Provinces such as Alberta and Quebec also offer grants.

If your child decides not to pursue post-secondary education, you will have to repay the grant amount and its earned interest back. If you have another child, you can transfer the CESG amount to her, provided she has grant room available. The CLB is not transferrable. As for the contributions, you can transfer them to another sibling as well, provided the child is under 21 years old.

You can also transfer them to an RRSP –retirement savings plan- if you have contribution room available. There are, however, a couple of conditions to do so. The RESP needs to be open for at least 10 years, and the child needs to be over the age of 21.

Since an RESP can be kept for 36 years, you can also wait and see if your child decides to go to university or college later on. If you decide to close the account altogether, you will have to pay income tax on the interest earned and a 20% penalty.

An RESP is basically free money from the Federal Government. If you start early, between the contributions, the grants-even partial amounts- and the earned interest, you can more than cover for the costs of your child’s education.

5 saving tips on back-to school shopping

Image result for back to school shopping

With “back to school” a mere couple of weeks away, lots of parents are scrambling to get what their children need for the school year.

Here are a few tips to avoid breaking the bank.

  • Go through your house before going to the mall. There are probably many items that you already have and that can be used. Your kids don’t need “brand-new everything”, whether it is clothes, laptops or school supplies.


  • Shop online. Prices can be lower than in stores.


  • Buy generic brands instead of “designer” ones.


  • Stick to the list of supplies sent by the school.


  • Avoid “peer pressure”. This one is difficult. You may have to leave your children home to avoid spending hundreds of extra dollars on items that look “cool” or that “everybody else has”. You can also help your children by explaining and emphasizing the difference between “want” and “need”.


As a parent, remember the decision is ultimately yours when it comes to both your children and your money.