Special to the Financial Independence Hub
When it comes to education, there are important financial lessons to be learned by post-secondary students outside of class.
According to Statistics Canada, there are currently more than two million full and part-time students at Canadian universities and colleges, and for those who leave home to study, a four-year university education could cost as much as $90,000. The road to responsible money management is a lifelong journey and many post-secondary students would benefit from ongoing practice: no matter their financial situation.
As a millennial financial advisor with freedom to provide impartial advice to helps young adults and parents prepare for life on campus, here are my top five tips and tricks to help students save money and put themselves on a solid financial footing throughout the school year.
1.) Look for scholarships and bursaries
There are many different scholarships out there available to students based on factors such as their choice of major, financial need, academic performance and community involvement. Surprisingly, however, many scholarships and bursaries go unclaimed each year. Although it may be time-consuming to find all the options available to you, contacting your school to get a directory is a great start and may be well worth the effort. You can also access Canada.ca’s student financial assistance section to learn what is available to you and how to apply for help to pay for your post-secondary education.
2.) Hone your cooking skills and save big
Buying food at restaurants every day can quickly add up and put a damper on a limited student budget. Shopping at a local market or on student discount days at a grocery store is a smarter route. For example, Zehrs – a Loblaws brand grocery store – offer 10 per cent discounts off students’ groceries on Tuesdays if they present their student cards in Waterloo. You can also order a basket of ugly but delicious produce via second-life.ca or browse through your local grocery store for discounted fruits and vegetables nearing expiry. Certain supermarkets, such as Loblaws, Sobeys or Metro, now offer a range of “imperfect” fresh products at affordable prices.
3.) Pay down highest interest rate debt first
If you have credit card or line of credit debts, making sure you pay down the highest interest rate debt first is key. High interest debt – such as those on credit cards – can compound a student’s thin finances over time so instead of investing, paying off the high interest debt has to be a priority. Students should sit down with someone they consider financially responsible, such as a parent, a sibling, or mentor, and develop a budget of cash inflow versus outflow. After all the necessities are paid for, they can use the extra money to pay down their debt. Creating and following a budget may be an area of managing your finances where you may have some difficulty at first, but if you have one, it’s important to revise it semi-annually.
4.) Spend smart with a credit card
Credit cards are a good idea to start building your credit card history if used wisely. If we are not taught how to use our first credit card, it can become easy to just tap and rapidly build up debt. Keeping a sticky note wrapped around your debit or credit card, and writing down the negative number as soon as you make a purchase can help curb excess spending and reminds you that this is money being spent, not just a piece of plastic.
5.) Open A TFSA for extra savings
If you managed to save some money and are 18 or older, opening a Tax-Free Savings Account (TFSA) is a great first step in building a successful financial future. All interest, dividends, and growth in a TFSA accumulates tax free, so the investor has the potential to enjoy growth on their savings and pay absolutely no tax on it. There are many investment choices in a TFSA ranging from a simple savings account to Guaranteed Investment Certificates (GICs) and mutual funds. Starting to learn about these investment vehicles by speaking with an advisor from a respectable industry leader will increase your financial literacy which will give you great financial advantages over your peers later in life.
Brandon Silbermann is a 20-something financial advisor with Manulife Securities Investment Services Inc. Manulife Securities has more than 1,200 advisors across Canada — both IIROC and MFDA registrants — and more than C$35 billion in assets under administration.