5 financial tips for high school grads as they head to post-secondary
By ATB Financial 25 October 2018 4 min read
The months before starting university may be the most fun of your life, full of graduation parties and summer celebrations. But those months are also a good time to take a good look at your finances and figure out what you'll need and how you'll make it happen. Money troubles are behind most dropouts, and the last thing you want is a lack of planning now to derail your plans for the future.
Set a budget
Start by figuring out how much money you have coming in—from parents, scholarships, grants, previously established savings, part-time or summer jobs and loans. Then do the math and figure out how much will be going out to cover fixed expenses such as tuition, rent, insurance, car payments, and utility bills. You know, all that fun stuff that goes along with college and university. Whatever is left should be divided to cover food, books, entertainment, activity fees, gas, bus fare, clothing, personal care products, and other miscellaneous expenses. Ask your parents or older friends and relatives if you aren't sure how much to budget for unfamiliar expenses.
There a lots of online money management tools that can help you create (and monitor) your budget.
Decide if you will be able to work
Loans must be paid back, and parents can't always cover all the costs of university, so it may be worthwhile to line up a part-time or seasonal job. Depending on how much assistance you have from other sources, your job may cover anything from tuition expenses, to books, to groceries, to a fabulous spring break.
Working during the school term while keeping your grades up can be challenging, but many students are able to make it work. And most students find summer jobs essential to covering their costs. In addition to beefing up your budget, you will learn the ins and outs of the working world. You may even build networks that will help with your post-university job search.
If your university is within commuting distance to your parents' home, you may be able to cut your living expenses in half by waiting until after graduation to move out.
If living at home won’t work, carefully calculate the costs of the various housing options available. These may include on-campus housing and apartment living – either on your own or with roommates. In addition to the cost of rent, be sure to consider gas and commuting, maintenance fees, utilities, parking and discounted meal plans tied to university housing.
Plan to save
Money is often tight for university students, and you may find yourself figuring every available dime into your budget. This is dangerous, because minor calculating errors or emergencies could be enough to seriously threaten your education. Don’t let yourself get into the habit of spending everything you have. Instead, establish a savings plan in case money runs out and to give you a buffer for once classes are over and bills start coming due. Start your savings with graduation and holiday gifts, and try to commit to adding a specified amount each month.
Control your debt
It may seem like your university years will last a lifetime, but in actuality, they will be over before you know it and you'll be left with the pressure of finding a job, paying your living expenses and (in most cases) tackling a mountain of debt. According to the Canadian University Survey Consortium, the average Canadian graduates university nearly $27,000 in debt. Keep yourself at the lower end of the statistics by avoiding debt if you can help it. If you can't help it, remember that not all debt is created equally. Student loans are a popular choice, and while the rate can be low while you're in school, it may climb a lot higher after you graduate. A line of credit is another option if you don't qualify for a student loan or can't get a co-signer. Credit cards are a notorious form of "bad debt," so you should never rely on them to fund things you don't need, such as meals out, designer clothing, or vacations—unless you can pay your card off every month. Creating good credit card habits can help you build a good credit rating, which will be important when you get older.
Calculate the amount of debt you'll need to get through school, and then budget those funds to avoid needing more loans before your degree is in your hands. Also, determine what your monthly principal and interest payments will be after graduation. This will help put your borrowing in perspective, and you'll have a figure to work with when you start negotiating salary for your first full-time job.
Having a solid financial plan before setting foot on campus can help you feel more confident in your ability to support yourself, freeing up more of your energy to focus on coursework and having fun.