5 tips for managing money as a student
We asked 10 grads from across Canada what financial obstacles they overcame at school, and what financial advice they have for current and future students:
1. Overestimate what you need and leave room in your budget for unexpected expenses
School is expensive, and it’s real life. And in real life, the unexpected happens. On top of anticipated expenses like tuition and rent, many of our grads faced expenses they weren’t prepared for, like rising tuition costs, broken laptops, car repairs and travelling for school projects. It’s always a good idea to put aside some money into an emergency fund, for expenses that come up during the school year.
2. Decide how you’ll spend your student loan before school starts
Our grads said they (or their friends) made the mistake of taking a lump sum student loan and adding it to their regular spending account, where they ended up spending too much of it on entertainment or eating out. Decide in advance how you’ll spend the money on your student loan by prioritizing expenses, and ensuring you can stretch out your loan over the course of the entire year. You may even want to put it into a separate account that you only use for those pre-determined costs.
3. Take advantage of scholarships and bursaries
The advice we heard the most? Apply for scholarships and bursaries. Unlike a student loan, scholarships and bursaries don’t need to be paid back, so they’re a great way to get ahead on school and living expenses. Remember, you might have to apply for several scholarships before you’re successful, so try not to be discouraged if you don’t receive the first one you apply for.
Tip: Regularly check your school’s scholarship portal and write down the scholarship’s deadlines (so you don’t miss any). Make a plan to apply to a few scholarships each week.
4. Create an income stream – work part-time, find a summer job, freelance etc.
Most of our recipients had a job at some point during school. Some worked over the summer to save for school-year expenses, while others worked part time during school to create an additional income stream year-round.
Having a part-time job during school is ideal, but if your program is too demanding and you’re only able to work during summer, make sure you calculate school-year expenses ahead of time so you know how much money to put aside from each paycheque. Consider something flexible like freelance work, or maybe find a job in your field to gain work experience before graduation.
5. Establish a budget
A common theme we heard is that failing to make a budget made students more likely to spend their savings or student loans on unnecessary expenses. Making a budget can help ensure you have enough money to cover priority expenses like tuition, books, rent, internet and groceries. Then, any money you have leftover can go to entertainment or other activities. Creating a budget could also help you can see where you might be able to cut costs. A few of our grads suggested living with parents or sacrificing a car to cut back on expenses.
Not sure how to get started? There are tons of free resources and templates available to help you create a student budget. The Government of Canada’s website offers a free student budget worksheet and information about resources available to help you pay for education.
Remember, post-secondary is not only a time to learn about your career, but also a time to learn about money management. The habits you develop as student will help you long after you graduate. Looking for tips to stay financially savvy? Find more tips on our blog.
Who are the grads we interviewed?
In May we kicked off our first-ever Next Step Financial Award program. Through this program, we awarded 10 Canadian grads with $4,000 to help them get a head start on life after college. Learn more about our recipients and their stories here. And, if you’re a student going into your graduating year, we encourage you to submit a video for Fairstone’s Next Step Financial Award program this spring. Visit our Next Step webpage for more information.