Starting post secondary school is a big step many young people take once graduating high school. This step is fundamental to many aspects of life in Canada and internationally, especially if you wish to work in a skilled trade or academic field. However, this step in your life does not come without preparation.
The school you will be attending has probably sent you countless emails about how to prepare for classes, residence, student life and various other aspects of life as a student at their school. However, something that few universities, colleges and high schools prepare you for, is how to manage your money and finances while in their institution. This is why Plastk has compiled a list of the top 10 tips you can use to manage your money while in university or college!
One - Get a Secured Credit Card
Getting a secured credit card can help you manage your money in the most efficient way possible. Secured Credit Cards offer customers countless benefits including: the ability to set your own limit, instant or easy approval and a simple way to start on your credit journey. As we mentioned in countless other blogs, using a credit card is the easiest way to start your journey towards financial freedom. Starting your credit journey young is the best thing you can do for your long term finances. The earlier you start using a credit card, the sooner you will be able to start building your credit score. Having a good credit score can help you achieve many things including, getting better rates on car payments and an easier time when you are looking to apply to buy or rent a home.
While buying your first home or car may not be the first thing on your mind when you’re a new university student, you will be grateful you started building your credit young, when you graduate. If you’re curious about the difference between a secured and unsecured credit card, check out our blog post where we describe the differences in detail. We’ve also included a simple infographic if you’re interested in a more comprehensive look at the two types of credit cards.
If you’ve done any research into student life or money management, you’ve probably heard the phrase, ‘set a budget,’ but what does this mean? Setting a budget essentially means creating a spending plan that works for your income and lifestyle. While you’re in school, it is likely that your expenses and income will be relatively low. This makes your budget all the more important. You need to create a plan for spending that will ensure you are able to afford your needs, wants and have money left over for savings or emergencies.
Some savings tips you can follow are the 50-30-20 method or the ‘save the 10s method! However, these methods are best suited for those with steady incomes. If you aren’t working while in school, you can calculate this using a set amount of money from your bank account. However, you should also budget for having money left over.
For example, if you have $12,000 in your bank account for the school year, you should not plan to use all $12,000. When creating your budget, you can use 75-85% of the money in your account to help craft a spending plan.
So if you have $12,000 in your bank account, you should use $9,000-$10,200 for your school year spending budget. In this example, we are not budgeting for expenses like rent, tuition or school fees, as these change depending on the city you are going to school in, year of study you are in school, program of study and countless other factors we will look into later in this article. This budget is designed with the first year student in mind, as many schools offer entrance scholarships, residence living and free public transportation, for students who attend their institution.
Our mock budget is as follows:
Three - Apply for Grants and Scholarships
As we touched on before, students have countless opportunities to get ‘free money.’ Schools like Carleton University, Western University, Humber College and Ryerson, offer entrance scholarships for students. This amount is applied directly to your student account if you achieve a certain GPA while in secondary school. In addition to this, schools often have scholarship hubs that require short applications.
This includes writing essays, submitting creative work, statements of interest or submitting a letter of recommendation! These processes often take less than an hour and can mean receiving a substantial amount of money you can put towards your education. If your school doesn’t offer this, websites like the Student Life Network or Scholarships Canada, offer countless scholarships for students from all backgrounds.
Did you know: In Canada, Millions of Dollars of scholarship money goes unclaimed every year. This money could be used towards your education, investments or future! Another aspect to know is the difference between grants, scholarships and loans.
Grant: A set of money that is to be used towards education. This money can be sourced from the government, your school or a corporation. A grant almost always comes along with some kind of additional work, like a research paper, application, statement of interest or recommendation.
Most types of grants, unlike loans, are sources of free money that generally do not have to be repaid. Grants can come from the federal government, your state government, your college or career school, or a private or nonprofit organization.
Scholarships: Scholarships are typically based on merit, while grants and bursaries usually take financial need into consideration as well. Some scholarships, grants and bursaries are also based on academic achievement, athletic skill, extra-curricular involvement, or special abilities.
Grants tend to be based upon financial need while scholarships are usually based on merit.
Loan: A loan is a set of financial aid that NEEDS to be repaid and will incur interest.
Four - Sign Up for Discount Programs
Another perk of being a student means getting discounts just for attending classes. You should look into stores that offer discounts for students so you can save money on everyday purchases. Many grocery stores, coffee shops, bookstores, clothing stores and even subscription services offer discounts when you show your student ID or email. Looking into these brands can help you reduce your monthly expenses, so you can put more money towards your savings or wants.
Some Companies that offer this are listed below:
Grocery:
Eating Out: & Events:
Shopping:
Subscriptions:
Five - Start Preparing for School Now
Now that you’ve started reading this article, you’re already more prepared than your peers. You should be reading about financial literacy and budgeting before starting university or college, so you can be best prepared for everything that comes your way! This includes looking into how credit works, how student loans work and how your classes and life will change now that you are in university or college.
This means following the steps in this blog, saving money whenever possible and learning about credit and finance. By doing this, you are setting yourself up for success after you graduate and making your time at school much easier.
Six - Use Cash when Going Out with Friends
One of the biggest aspects of university life is the social side of your life. While this can be a great way to meet new people, learn more about yourself and your interests, it can hurt your finances. You may be tempted to go out with friends constantly, now that your schedule is more flexible, you may be living on your own for the first time or you may be ‘legal,’ in the city you live in. All these aspects contribute to wild spending. A way you can avoid overspending is by only taking cash when you go out.
At Plastk we often recommend you rarely use cash. However, it may be wise to do this, if you often go out for social events. This makes it easier to manage spending and ensures that you stay on track with your budget.
Seven - Buy in Bulk & Reduce Expenses
Most people will live with roommates while in post-secondary school. This is a great opportunity to save money on rent, utilities and everyday essentials. To save money as a student, you can look into getting a Costco membership with your roommates or buying your necessities in bulk when they are on sale. This not only saves you time, but can help you save a substantial amount in the long term.
Another aspect of saving and spending money is to cut down on things you do not need. For example, if you spent $40 every two weeks on getting your nails done in high school, it may be wise to cut this down to once a month. This can help you reallocate money towards more important expenses such as food, textbooks or your savings. Post-secondary school is expensive, this is why it is so important to spend mindfully and save wherever possible.
Eight - Make as Much Money as Possible in the Summer
When you’re in post-secondary school, you will likely have a summer vacation that lasts 2-4 months. This is a great time to work as much as you are able to, so you can have more money to spend during the school year. Working a lot during summer vacation not only keeps you busy but can help you have more financial stability when you’re in school.
Let’s face it: university and college is tough, if you have the ability to not work a full time job, you should take this opportunity. This will allow you to focus more on your studies and worry less about money.
Let’s put your summer job into perspective. The average minimum wage for students in Canada is between $14-$22, with the average student making $17.52 an hour. For this example, we will be using the average $15 to account for students from all backgrounds! So how much would a summer job help you make:
Nine - Buy Used Textbooks
Going to university means spending lots of money on books, school supplies and tuition. However, you can reduce costs by being smart with your spending. One way you can do this is by buying textbooks or school supplies from your school’s used book section or from other students who have taken the class. If you’re in a more hands-on program that requires equipment, you can research companies that offer student discounts or purchase your needs during back to school sales.
For example, if you’re in a journalism class that requires a camera, you can look at local camera stores to find deals or research large companies, like Costco, that sell electronics for less.
Ten - Look into on Campus Jobs
If you find yourself needing extra money while you’re at school, you should look into on campus jobs. Finding jobs on campus is ideal, because it will help you better balance your courses with your work schedule. Furthermore, your employer is more likely to understand your availability and help to craft your work hours around your classes. Many campus jobs also pay higher than the average minimum wage, which can help you even more. If you have good grades, you may be able to be a teaching assistant or work at a more academic job, that can help you make career connections. However, if you decide that this is not for you, campus jobs in the dining hall, book store or student services, can be just as convenient.
We are so excited that you are on route to post-secondary education! If you have any questions about this blog, check out our social media posts or DM us! We are happy to help with any questions or concerns you may have.
Disclaimer: The content provided on the Plastk Financial Inc. Blog is information to help Canadians become financially literate and learn about credit. Plastk is not responsible for building or ruining an individual's credit score or credit rating. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment, credit inquiries, and all other decisions should be made, as appropriate, only with guidance from a qualified professional.