Q: Our oldest is starting college this fall and her mom and I struggled financially as post-secondary students. We’d like our kids’ experiences to be different than ours, so we have money saved to help them with their education. But post-secondary programs are so much more expensive than we ever imagined. The savings we have won’t carry all three kids through until the end of their education, so we’ll have to figure it out somehow. Are there any tips to make it easier for all of us? ~Marcus
A: Embarking on post-secondary education is a big step, not just for the student, but for the whole family as well. With tuition costs for college, university, trades and technical programs at an all-time high, finding savings and additional cash to fund the program without incurring major debt, has become as much a priority as achieving good grades. To help your son or daughter find their way financially, here are practical tips that will help any student avoid the financial pitfalls.
Avoid the biggest financial mistake
Starting an educational program after high school prompts many students to look at opportunities away from home. However, housing costs can easily add $1,500 or more, to a student’s monthly expenses. For families that can accommodate it, encouraging their kids to stay living at home while attending school adds up to significant savings.
Kids often look forward to moving out and resist staying at home while going to school, so you might need to have a family discussion about how things may need to shift to accommodate both your child’s new independence and your own expectations. For example, if you can’t afford to fully subsidize their living costs, work out how much they’d need to contribute toward the household bills. Let them know and help them budget and plan accordingly.
If the educational program of choice isn’t available close to home, ask family and friends if they can help. Grandparents could be willing to convert a guest or recreation room, or a cousin might be willing to look for shared accommodation in the city where they both need to be located. Saving on housing costs now will allow for more financial freedom once school is done.
Pay for College or University Without Getting Into Major Debt
Watch what you swipe
When the busyness of the semester kicks in, it’s easy to get carried away with your spending if you have access to a credit card or debit card linked to a lump sum of money. From tapping a meal plan card, to stopping at the pub or coffee kiosk, taking a study break by gaming or shopping for electronics, clothing, or shoes — it all adds up faster than most students realize.
To stay on track financially, outline a realistic student budget so that you know how much you can afford to spend each week. If you are relying on student loan funds, scholarship money, and savings, divide how much you have by the number of weeks it needs to last and pay yourself that amount every two weeks, as if it’s a paycheque.
Think of a budget as a fallback plan to keep your spending on track when you don’t have time to think about it. Because you’ve determined ahead of time how much you’ll spend on the things you need and want, you can spend guilt-free knowing that as long as you stick to your plan, you won’t leave yourself short. It’s the financial equivalent of set it and forget it.
Practical Money Management Tips for Post-Secondary Students
Stay in school longer to boost your bank account
Most students have a goal of getting through their education as quickly as possible, but that isn’t always the wisest course of action, both for your grades as well as your finances. Taking a full course load can mean extra pressure to work as much as possible during your summer break to account for school months when there is less flexibility to work. Not only does this make year-round budgeting more challenging, it can also mean an increased reliance on student loans to cover any shortfall.
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Decrease the pressure on yourself, academically as well as financially, by taking a slightly lighter course load so that you have time to work while attending school. The boost to your resume could be just what you need to secure a spot in a co-op program or with a work-study opportunity. In addition, don’t lose sight of the fact that many college and university students graduate without much career-related work experience. Employers with otherwise equally qualified applicants will typically choose the person who also has some work experience. Working part-time doesn’t just help your bank account, it’s important for your resume and long-term goals.
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Look for non-repayable sources of funding
There are millions of dollars available to students each year through scholarships, grants, and bursaries. Much of the money goes unclaimed because students fail to apply for it, especially in later years. Contact the financial aid and awards office at your post-secondary institution each year for information about how to apply. These funds are especially valuable because they don’t need to be repaid, where borrowed funds can saddle you with debt for years after graduation. Spending a few hours to net a series of smaller scholarships could be as lucrative for your bank account as working for several weeks.
Financially Speaking, What Type of Post-Secondary Education is Best?
The bottom line on money management tips for post-secondary students
Post-secondary education is an important part of preparing for a future career, and so too are the life lessons learned from finding ways to budget and finance the costs associated with deepening one’s education. It takes a lot of diligent effort and financial discipline to achieve an educational goal, but when these remain a priority, the desired opportunities are certain to follow.
How to Avoid Student Debt and Big Student Loans
Take Control of Your Finances While Attending Post-Secondary
Is Getting a Student Loan Worth It or Not?
Peta Wales is President and CEO of the Credit Counselling Society, a non-profit organization. For more information about managing your money or debt, contact Peta by email, check nomoredebts.org or call 1-888-527-8999.