College and University should be a great experience. It is also a very expensive experience.
Budgeting and managing your money is a reality for many students, whether by choice or otherwise. University life doesn’t have to be eating mac & cheese every night or working during all of your free time. These are some suggestions for managing your funds that work.
Find a good summer job.
Budgeting only works if you have something to budget.
One area that many students overlook is the importance of finding a good summer job early. If you already have summer employment, ask about returning while you are still working. August is a good time to ask about coming back next year. September through November is next best, as by December there is more competition. By March, everyone is looking. Starting early ensures less competition for good summer jobs and the opportunity to find something interesting and rewarding is that much greater
There are advantages for your employer as well. It reduces the stress of having to find and interview someone new, and if you’ve worked with them before, you’ve already done the training.
A full-time job is better than multiple part-time jobs. Finding summer jobs that tie back to your field of study can pay dividends after you graduate, and are especially helpful in making working connections. At the same time, it also pays to branch out; consider jobs in the trades, like a carpenter’s assistant, that will give you practical skills to help throughout your life.
If possible, try to avoid working during the academic year. If you have to, look at employment opportunities offered through your school. Colleges and universities tend to be more understanding about the demands of your program than other employers would be.
75/25 rule.
From each pay cheque, save 75% of your after-tax amount for school. The other 25% can be spent on whatever is important to you while you are working. Keep in mind that, in most jurisdictions, the bank should not make any deductions from your pay while you are a student.
Expenses to avoid.
The problem with money is that there are so many things that it can be used for. If money is tight, consider what things are necessary and what things are just “nice to have”.
Having a car is an expense that is hard to justify if public transit is available. Many colleges and universities will have negotiated public transit pass for their students at rates below the standard fares and some even offer free ridership.
Grocery shop at a discount retailer rather than a premium grocery store; in addition, use points cards and coupons to help lower costs dramatically. Ask if your grocery store has discounts for students, many do on certain nights. Take a “scraps” cooking class online and/or learn to cook to use all of the fruits and vegetables you purchase. Learn the difference between “best before dates” and “expiry dates,” as good food is often discounted because grocery stores cannot sell anything that is approaching these dates.
Shopping at a second-hand store can help with certain clothing items, as can looking for sales on the remaining items that are needed.
Living in residence may be cheaper than living off-campus. Housing in Canada is very expensive, though some will argue that it is still cheaper than a residence. Remember, you only pay for residence when you are there, not in the summer. Many off-campus apartments require an annual lease and unless you can find someone to sublet, the summer expense if it is empty offsets any savings.
Financial Notes.
Using a credit card is a great way to save money. As long as the balance is fully paid each month, it is an easy way to track spending, earn points, and help build your credit rating.
Track your expenses and compare them to your budget. Adjust the budget according to each passing semester to save money and ensure that you have allowed yourself enough money to live.
Watch your bank account. Many banks and credit unions don’t charge service fees to students. If your bank does, make sure you switch to one that doesn’t.
Understand that if you happen to have extra money, you do not need to use it to repay student loans. Student loans typically are interest-free until after you graduate, so there is no incentive to repay them early.
Check with your school and community service organizations to see if they offer scholarships or bursaries, then apply for them.
Expenses.
Realistically look at your expenses and try to estimate what you think that you will spend per semester. Always pay bills on time – set reminders if necessary – to avoid late fees. Remember, just because you haven’t seen a bill from a utility company doesn’t mean that you can avoid paying it. Keep all of your receipts and keep them organized.
Rent – Living in residence is simple, the school will bill you and issue you your receipts. If you are living off-campus, have a lease, get receipts, and understand your rights.
Hydro & other utilities (water, internet) – Not an issue on campus, but if you are living with roommates make sure, however, the bills are divided, that they are paid on time.
Food – Budget enough and overspend if necessary. Food is one area to make sure you have enough. If you are off-campus and have roommates, try to work out an equitable cost-sharing plan; not everyone eats the same amount of food.
Contents insurance – Many leases will have this as a condition of signing an off campus contract. The property owners insurance does not cover your things.
Dentist, medical expenses, health expenses – Many post-secondary schools have medical plans and many of your parents may have benefits that will cover college students until they are 25, ensure that you have coverage. University/college plans are not usually expensive and can be part of your budget.
Clothes – As mentioned, create a budget for essentials. Using second-hand stores items and sales for the rest can really stretch your funds.
Entertainment – Part of the experience is the social interaction with other people. Budgeting money for coffee, drinks, and other things should be a part of your budget (within reason).
Tuition, books, supplies – Since so many of the resources required for class are online now, the days of $500 textbooks are (mostly) over; however, money should be allocated to ensure that you can acquire the most current texts, online or otherwise.
Travel home, public transit – Many post-secondary schools have special rates with public transit companies and can save students significantly. If “home” is an airplane ride away, budget for travel, plan in advance and take advantage of seat sales.
Physical fitness – For most colleges and universities, part of the student fees pay for the use of gym facilities and exercise equipment. Since you are paying for it, make use of it.
Furniture – With the exception of mattresses and bedding, try to purchase any furniture you require at auctions and second-hand stores.
Government rebates/tax credits – File your taxes early, ensure that your employer does the correct paperwork, and make sure that you apply for any and all government tax breaks for students.
Credit card bills – Always pay your credit cards in full before the due date and avoid the daily interest that comes from taking cash advances.
Rainy day fund – Build up a reserve for $300 to $500 if possible to keep for unexpected emergencies.
Budgeting and watching your finances depends on the money coming in and going out. Everybody makes mistakes, I did, and you likely will. Learn as you go and try to avoid the obvious things. Keep these lessons in mind and make sure that you enjoy your college/university experience.
Good luck,
Paul.