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  • Common Mistakes that College/University Students Make with Money

    Common Mistakes that College/University Students Make with Money

    Your post-graduation life will largely be about paying off the debts you accumulated while in school. Avoid these very common financial mistakes to make your life in the ‘real world’ less of a strain:

    The credit card hole…

    Sometimes credit can seem like an easy way to fix your problems or get what you want quickly. But the truth is that adding to the already massive student loan debt you are accumulating will weigh down your ability for success, your credit rating and your freedom. That is a lot of stress and debt to have on your back before you land a real job. Credit cards are a good thing if you are able to pay off the balance and create a strong credit history. But do not allow yourself to fall into the minimum payment cycle and subsequent interest hole.

    Not budgeting your student loan funds…

    Never forget that your student loan is for the essentials: tuition, books, transit and living expenses. Make sure that upon receiving the loan you take the time to hash out how much your year is going to cost and how much you have to spend on the different facets of your life. Many people get over excited when a large sum suddenly appears in their bank account. But university is extremely expensive, and the money is never as much as you think it is. Be careful and keep your receipts and a list of your expenses at all times. Be in control of your debt.

    Failure to meet with academic advisors…

    Academic advisors are detrimental to your success in post-secondary. It is important to see them regularly from before you actually begin school to your very last weeks as a student. It is their job to help you sign up for the correct courses, ensuring that you do not take any courses that will not count towards your degree or ones that will slow down the graduating process. Oftentimes, failing to meet with an academic advisor can result in the loss of thousands of dollars and time. For instance, if you miss a required class, it can entirely throw you off the correct track to graduate at the time you wish.

    Playing around with ‘drop dates’…

    Do not forget about the deadlines for dropping classes. If you wait until after the drop date you are waving goodbye to hundreds of dollars rather than receiving a full reimbursement. Remember that taking classes seriously means taking your money seriously. Without commitment you may receive a grade that will not count towards your degree and that is simply a huge waste of time and money.

    Ignoring scholarship opportunities…

    There is SO much free money out there. Apply for as many scholarships as possible and chances are you will get at least a few small ones. Set time aside to write letters of intent and have your resume ready and you could easily have a semester paid off. Speak to academic advisors about this, actively use university search engines and speak to your family and about work and organizations they may be involved with that provide scholarships.

  • Relying on Others for Money

    Relying on Others for Money

    Saving for school is one of the hardest things to do- even if you have worked a part-time job and achieved scholarships; it is still hard to meet financial goals for post-secondary. You may find yourself doing something you really do not want to do; asking other people for money:

    If you ask family members …

    Some people who are in need often think of family members first when it comes to borrowing money. This is advisable if you have a close relationship with your family members as they will most likely not even ask you to pay the money back. However, for solidarity, even if you are close to your family members and they do agree to lend you a hand, try to make an effort to pay them back over time. If they refuse the notion of you paying them back, do something special for them like taking them out to dinner at their favorite restaurant or a concert of their choice.

    This situation is tricky if you are not exactly close to your family members. You might be reluctant to go to them in their first place. If you don’t feel comfortable asking them at all, find other sources. Otherwise, you will end up feeling uneasy until you have managed to pay them back.

    If you ask friends …

    This is similar to asking your family members for financial help. If you have a familiar relationship with your friends, it should not be a trouble for them if they are in a stable financial situation and is willing to help out a friend in need. As with close family members, some of them may not even ask you to pay it back at all. If that is the case, don’t abuse the privilege and continue to be responsible for what was lent to you and find a way to return the favour.

    In some cases, some people actually find it easier to ask for financial help from not-so-close friends than close friends as there is a saying, “Don’t mix business with pleasure.”  The choice is yours, but be careful not to jeopardize any friendships due to money.

    Looking into organizations/foundations…

    All organizations and foundations that award scholarships and bursaries work on a budget, and there are times when the funds provided are not the amount promised- or funds fall through. This is at no fault of the organization or foundation at all. As such, it is still best if you keep working on your own to earn the money for school and the funds from these organizations and foundations are simply a complimentary aid—not the main source.

    Being self-sufficient is of course every student’s goal as they work to better themselves and prepare themselves for full-fledged independence. However, there are times when you may still have to rely on other people for your education. When this happens, don’t fall into self-pity. Instead, be thankful you have people in your life you can ask for help and always be responsible for what you are given.

    SOURCES:

    https://enlightenme.com/top-10-borrowing-money/

    http://www.askamanager.org/2009/02/asking-boss-for-loan.html

    http://www.huffingtonpost.ca/2013/03/13/asking-for-money_n_2838926.html

    http://www.aspiringmind.com/5-reasons-stop-depending-on-others/

  • Creating a Working Budget – 5 Tips to Remember

    Creating a Working Budget – 5 Tips to Remember

    Being a college or university student is a learning experience through and through. Not only do you learn the necessary skills to flourish in your future career, but you also learn how to survive in the real world. Among the long list of real-life survival skills you get to test out as a student, is being finance- savvy.

    Being free of financial troubles while in college or university is not as much a Herculean task as many believe, but it is indeed a challenging one, especially in these times when the Canadian dollar has hit its lowest rate in 13 years.  However, if you are completely aware of your finances from the start, it would mean smooth sailing for you. Below are some suggestions on creating a working budget.

    Note all your assets.

    The first step in establishing a working budget is to know how much you have. Students like you have a variety of sources of income, and you should note them down. Such sources include income from part-time jobs, scholarships, grants, or bursaries, and financial support from family. Include everything you have accumulated since you started your post-secondary education—even that cash gift you got from your grandparents last Christmas.

    Note all your expenses.

    Now this is the part where it gets a bit tricky. This is because expenses are never actually constant for any college or university students. There are some fixed expenses like credit card bills or phone bills, but there will always be times where you have to spend extra on school projects or supplies and other school-related stuff. Of course, college and university life also equals honing your social skills and bonding with fellow students, and you would most likely find yourself allocating your budget for entertainment expenses such as concert or movie tickets. Remember, however, that when it comes to expenses, it’s always better to overestimate than underestimate.

    Plan your emergency money.

    As a kid, you were always reminded by your parents that it is wise to save money for a rainy day; over time, you would come to realize how valuable that piece of advice was. Having a set budget for school-related costs is one thing, but what will you do for emergencies? For instance, suppose your car breaks down, and you need a new battery. Or your computer finally gives out and is beyond repair and you have to buy a new one. A true finance-savvy student is one who sets aside money for emergencies.

    Do a monthly budget review.

    Businesses and corporations make it a point to do a monthly review so they know where they stand. They know when to cut operating costs, when to hire additional staff, and when to give bonuses. You can follow their example by reviewing your budget on a monthly basis. This way, you’ll know if you have to cut down on your expenses or give yourself a treat.

    Be on the lookout for opportunities to save.

    Be open-minded and resourceful when it comes to money-saving opportunities. For instance, you probably know how textbooks can run your wallet empty, so look into options of renting books or buying used books instead. When it comes to clothing, on the other hand, keep in mind there are stores that specifically offer student discounts, so it is good to take advantage of that as well.

    Sources:

    http://www.cbc.ca/news/business/markets-dollar-oil-1.3405067http://www.concordia.ca/cunews/main/stories/2013/11/14/the-6-best-budgettipsforstudents.html

    http://www.cicmoney101.org/Articles/Paying-For-College-How-To-Make-A-Budget.aspx

    https://studentaid.ed.gov/sa/prepare-for-college/budgeting/creating-your-budget

    http://www.styledemocracy.com/student-discounts-in-canada/

    https://www.ucas.com/ucas/undergraduate/finance-and-support/managing-money/student-budgeting-tips

    http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/addicted-to-student-discounts/article590866/

  • The State of the Canadian Economy- How Will It Affect My Financial Future?

    The State of the Canadian Economy- How Will It Affect My Financial Future?

    If you watch the financial news these days, you might be very confused. It might seem as if the state of Canada’s economy changes every day, and whether it is doing well or badly can vary with media news reports and people’s own opinions. The Canadian economy might improve or get worse, but whatever happens, you can always prepare yourself for the future.

    Have you ever thought of how much the economy affects you? Every time that you eat food from a store or go out shopping, you are contributing to the Canadian economy- if you are a consumer, you are a big part of Canada’s Capitalist society. You might also have a part-time job or already be in a training program for a special type of career.

    Almost all of the people in Canada participate in the economy in some way- some may say you start “participating” as soon as you are born.  If you buy supplies from stores, use electricity from the power system, or send your children to schools, you are participating in the economy. Most people are very closely connected to the economy through their jobs, homes, and almost everything that they do.

    In recent years, the economy has shown signs of trouble, especially since wages and job opportunities have not kept up with costs-especially housing. In 2008, a large number of people in the United States were unable to pay for the houses that they had bought. It is widely suggested that the crisis started “because banks were able to create too much money, too quickly, and used it to push up house prices and speculate on financial markets” (http://positivemoney.org/issues/recessions-crisis/ ).  The problem started a worldwide economic crash which is still affecting people today. In 1929, also, the stock market crashed because the prices no longer reflected what people were able to buy.

    Our Canadian dollar has been at an all-time low. The unemployment rate has been climbing, especially in Alberta, but also elsewhere in Canada. People in the United States are not buying much from Canada because their economy is also struggling. Meanwhile, the amount of money that people owe for their education, homes, or other purchases has grown to over 163% of their annual income. Unless they can find better jobs or reduce their spending, people could find themselves in a really bad position. Because of the oil crisis happening in Alberta (and echoing across the country), it has the highest debt ratio amongst residents, more than any province in Canada.

    What does all of this mean for the future, especially for young people? The economy might eventually recover enough to provide good jobs and homes to everyone, but young people should be prepared to live more frugally than their parents. They also might need to be very flexible about the kinds of work they do, although it is still useful to train for a particular job. Avoiding risky investments and learning new skills might also be good ways to prepare for the future. The most important thing for the youth of today to realize is that debt and unnecessary spending will hold you back and may put you in a really bad position, financially.

    Predicting the future of the Canadian economy is very difficult, and no one really knows what will happen next. However, you can help prepare yourself by learning new skills, being flexible, and learning as much as you can. That way, you will still be able to manage and even thrive, whether the economy recovers or fails.

    Bibliography:

    Conference Board of Canada. Canadian Outlook Long-Term Economic Forecast: 2016. http://www.conferenceboard.ca/e-library/abstract.aspx?did=7514.

    Economy Watch. “Canada Economy.” http://www.economywatch.com/world_economy/canada/.

    Freeman, Sunny. “The Biggest Risks to Canada’s Economy in 2015, And Beyond.” http://www.huffingtonpost.ca/2014/12/30/canada-economy-2015-risks_n_6392052.html.

    History.com. “Stock Market Crash of 1929.” http://www.history.com/topics/1929-stock-market-crash.

    Huffington Post. “OECD Slashes Canadian, Global Outlook, Calls for ‘Urgent Policy Response’.”  http://www.huffingtonpost.ca/2016/02/18/canada-u-s-other-g7-countries-drag-down-oecd-s-forecast-for-economic-growth_n_9261762.html.

    Isfeld, Gordon. “Canada’s economy grows more than expected, lifting loonie higher.” http://business.financialpost.com/news/economy/canadas-economy-grows-more-than-expected-3.

    Marr, Garry. “Canada household debt ratio hits new record of 163.3%.” http://business.financialpost.com/personal-finance/debt/canada-household-debt-ratio-hits-new-record-of-163-3.

    Sorensen, Chris. “Assume the crash position: How far will the stock market fall?” http://www.macleans.ca/economy/economicanalysis/assume-the-crash-position-how-much-worse-will-the-stock-market-get/

    Tencer, Daniel. “Canada’s Unemployment Rate Rises to 7.2% — Largest Gap with U.S. Rate in 14 Years.” http://www.huffingtonpost.ca/2016/02/05/unemployment-canada-january-2016_n_9166884.html.

     

     

     

  • Creating a Working Budget – 5 Tips to Remember

    Creating a Working Budget – 5 Tips to Remember

    Being a college or university student is a learning experience through and through. Not only do you learn the necessary skills to flourish in your future career, but you also learn how to survive in the real world. Among the long list of real-life survival skills you get to test out as a student, is being finance- savvy.

    Being free of financial troubles while in college or university is not as much a Herculean task as many believe, but it is indeed a challenging one, especially in these times when the Canadian dollar has hit its lowest rate in 13 years. However, if you are completely aware of your finances from the start, it would mean smooth sailing for you. Below are some suggestions on creating a working budget.

    1) Note all your assets.

    The first step in establishing a working budget is to know how much you have. Students like you have a variety of sources of income, and you should note them down. Such sources include income from part-time jobs, scholarships, grants, or bursaries, and financial support from family. Include everything you have accumulated since you started your post-secondary education—even that cash gift you got from your grandparents last Christmas.

    2) Note all your expenses.

    Now this is the part where it gets a bit tricky. This is because expenses are never actually constant for any college or university students. There are some fixed expenses like credit card bills or phone bills, but there will always be times where you have to spend extra on school projects or supplies and other school-related stuff. Of course, college and university life also equals honing your social skills and bonding with fellow students, and you would most likely find yourself allocating your budget for entertainment expenses such as concert or movie tickets. Remember, however, that when it comes to expenses, it’s always better to overestimate than underestimate.

    3) Plan your emergency money.

    As a kid, you were always reminded by your parents that it is wise to save money for a rainy day; over time, you would come to realize how valuable that piece of advice was. Having a set budget for school-related costs is one thing, but what will you do for emergencies? For instance, suppose your car breaks down, and you need a new battery. Or your computer finally gives out and is beyond repair and you have to buy a new one. A true finance-savvy student is one who sets aside money for emergencies.

    4) Do a monthly budget review.

    Businesses and corporations make it a point to do a monthly review so they know where they stand. They know when to cut operating costs, when to hire additional staff, and when to give bonuses. You can follow their example by reviewing your budget on a monthly basis. This way, you’ll know if you have to cut down on your expenses or give yourself a treat.

    5) Be on the lookout for opportunities to save.
    Be open-minded and resourceful when it comes to money-saving opportunities. For instance, you probably know how textbooks can run your wallet empty, so look into options of renting books or buying used books instead. When it comes to clothing, on the other hand, keep in mind there are stores that specifically offer student discounts, so it is good to take advantage of that as well.

    Sources:
    http://www.cbc.ca/news/business/markets-dollar-oil-1.3405067
    http://www.concordia.ca/cunews/main/stories/2013/11/14/the-6-best-budgettipsforstudents.html
    http://www.cicmoney101.org/Articles/Paying-For-College-How-To-Make-A-Budget.aspx
    https://studentaid.ed.gov/sa/prepare-for-college/budgeting/creating-your-budget
    http://www.styledemocracy.com/student-discounts-in-canada/
    https://www.ucas.com/ucas/undergraduate/finance-and-support/managing-money/student-budgeting-tips
    http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/addicted-to-student-discounts/article590866/

  • Managing Your Money Wisely

    Managing Your Money Wisely

    It’s not fun being broke and it’s definitely not fun living paycheque to paycheque! Learning how to manage money wisely is a skill that should be taught in school. Unfortunately, most students aren’t taught this skill in school or at home and, as a result, rack up a lot of debt by the time they enter adulthood. If you want to learn how to manage your money wisely and avoid getting into debt, here are some simple rules to keep in mind:

    1) Don’t spend more than what you have – It sounds so simple, but you’d be surprised at how many people don’t follow this logic. So I’ll repeat it again – don’t spend more than what you have. Or, more accurately, only spend what you can afford. For example, if you only have $100 in your bank account, don’t go out and buy the latest iPhone for $800. If you really want to get a brand new iPhone, then save up $800 for it. It may sound painful, and it may feel like it will take you an eternity to do so, but doing this will actually save you money in the long run!

    2) Use cash – Why? Because when you use cash you can only spend what you have (see rule #1). So if you only have $100 in your bank account, you are only going to have $100. Using cash keeps you in check. It’s a good idea, too, to keep your receipts and write down what you spent your cash on so you know where the money went.

    3) Avoid credit cards – Some people cannot handle credit cards. The act of swiping or tapping a card to pay for purchases means that some people use their credit card to pay for things they can’t afford (thereby breaking rule #1). This means that when the credit card statement arrives a few weeks later, they are only able to pay the minimum payment required and end up incurring interest charges; interest charges which are ridiculously high — 19.5% and higher! Paying interest on credit cards actually costs you more in the long run. You end up paying much more than the original cost of the item you bought. For these reasons, stay away from credit cards! If, however, you do insist on having a credit card, then at least make sure you can pay off your statement in full (i.e. don’t spend more than what you have)!

    4) Put aside money into a savings account/emergency fund/rainy day fund – Life is unpredictable. You never know when you will need to have some extra money in your account for expenses you didn’t foresee. For example, let’s say your car badly needs a $200 repair job. Do you have some money saved up to pay for the repair and still pay the rent? What if you fall sick and can’t go to work for a few weeks – do you have some money in your bank account to tide you over until then? Put a little money aside from your paycheque each month into a savings account or other emergency fund. Do not use the money in this account unless you have to! The best part is that if you keep putting money into this account and don’t touch it for a while, your savings will actually grow thanks to interest! Your money can earn you money without you having to do anything. (In this same way, a credit card statement not paid in full can incur interest charges that will cost you more in the long run.)

    Following these 4 simple rules will allow you to manage your money wisely and avoid getting into debt. Good luck!