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Oakville Beaver | Thursday, September 15, 2022 | 12 3 STUDENTS — As post- secondary students head back to school, they have a lot on their mind: sorting out class schedules, signing up for school clubs, meeting new friends and for many it is living away from home, on their own for the first time. Most students also become concerned about Students continue to say one of the hardest transitions from high school to college, university or trade school is managing their personal finances. It is confusing to them. Our high schools do a good job of preparing students for success in their post-secondary studies, but don’t teach students enough about financial literacy and how to successfully manage their money. This causes stress for many students.. .: to say they’re running out of cash! and their parents when kids call We answer some common student questions, from setting a budget to the pros and cons of student credit cards. HOW CAN STUDENTS GET OFF TO A GOOD START FINANCIALLY? It’s no different than what adults should be doing: budgeting. Budgeting means understanding how much money an individual has coming in every month and how much (and where) that money has to go. We find that students do a better job of managing their finances if they budget in two separate buckets. One bucket is for the big expenses such as tuition, room/board and textbooks. For example, tuition, residence and textbooks are generally paid out in one lump sum each semester. If a student is living off campus the rent payments are generally paid with post-dated cheques or a monthly EFT transfer. The second bucket is for the student’s spending money for the year. This is more easily managed if it is in a separate bank account. ‘To make it easier to stick to the spending account budget, the student should take the total spending money they have for the year and divide it by the number of weeks during the school year. This will help come up with a weekly spending limit. For example, there are typically about 15 weeks in each semester, so 30 weeks combined for the fall and winter semesters. If the student has $2,000 in spending money for the school year, divide the $2,000 by 30 weeks, to show the weekly spending budget is $66 per week. By keeping this it in a separate bank account from the big-ticket items, it will be easier to stay on track. WHAT ARE SOME WAYS STUDENTS CAN MAKE SURE THEIR MONEY LASTS? If you’re short of cash, some students take on a part-time job while in school, but make sure it doesn’t take away from your studies. Credit Union FINANCE FRIDAY: BACK TO SCHOOL BUDGETING TIPS FOR Many bursaries and grants are available and it costs nothing to apply. Look for grant applications on high school and college websites, at your parents’ workplace and through other clubs, associations and community organizations where you live. Make sure you also take advantage of student discounts. Another tip is to identify the “must haves” versus the “nice to haves”. A $10 trip to your favorite coffee shop a few times a week adds up quickly. You can save money by making your own coffee and taking it with you. You should also consider buying used textbooks or even sharing them with a class mate in the same course. Look for cheap or free social activities on campus versus off campus as this can be expensive types of entertainment. If you have a meal plan at school, take advantage of it and don’t waste your limited weekly spending money at fast food or other restaurants or food delivery services. A recent Forbes study showed that eating out can cost five times more than making the same meal at home! SHOULD STUDENTS HAVE A CREDIT CARD OR DOES IT OFTEN GET THEM INTO FINANCIAL TROUBLE? Both! A credit card is great for a student to build their credit score, to get useful reward points and to pay for emergencies. Building a credit history is important for life after graduation, when you need to rent an apartment, buy a car, etc. But, use the credit card like it’s part of your weekly spending allowance. For example, if you have $66 per week in spending money and you charge $120 to your credit card for a purchase, you’ve just used up two weeks of your spending allowance! How will you make that up? When you do use your credit card make sure to pay off your bill in full when you get your monthly statement, otherwise you will end up creating debt and paying interest which costs you much more in the long run. Do you have questions about how to manage your finances as a post-secondary student? Email your questions to Dave at FinanceFriday@FirstOntario.com or find him on Twitter at Finance_Friday. The contents contained herein are for informational and educational purposes only and are subject to change without notice and should not be interpreed a“ Financial, tax, legal, investment, or any other type of advice. Nothing contained hereir solicitation, endorsement, or offer by FinsOntrt, You bear all risks associated ith the use Oy this content, including without Jimitation, any reliance on the accuracy, completeness, or usefulness ‘parties may be provided. FirstOntario ‘oes not endorse and is not responsible for the contents of these external sites. This content was funded and approved by the advertiser FINANCE 74FRIDAY POWERED BY FIRSTONTARIO CREDIT UNION You’re not alone. Finance Friday can help your money make sense. Watch for regular posts on effective money management. insidehalton.com 7