(Special) - As the school year moves into full swing the issues of the cost of post-secondary education and student debt again take on a high degree of importance in the lives and minds of parents and students alike.
The average total cost of a four-year undergraduate degree today is estimated at about $84,000. Saving enough to pay for a child's education can be very challenging for parents, particularly if they have more than one child, and as a result students are taking on an average of more than $27,000 of debt to get their degrees.
"University is full of tempting opportunities to spend money, which is why it is important for students to create a budget and learn when and how to say 'no' to things they cannot afford," says Raymond Chun, a senior vice president at TD Canada Trust. "With the cost of an undergraduate degree it is imperative that students do their homework on how to manage everyday finances, stretch their student dollars and avoid excessive debt."
Students can quickly and easily rack up debt in a number of ways from using a credit card, taking trips on spring break that they can't afford, evenings out with friends, buying electronic gadgets and even spending money on coffee.
Recent research from TD Canada Trust has found that a majority of undergraduate students admit they would have managed their finances differently if they could go back and do it all over again.
For example, 38 per cent of undergraduates wish they had stuck to a budget during school and 43 per cent with they had curbed spending on discretionary items like evenings out with friends, gadgets and coffee. Thirty-eight per cent wished they had stuck to a budget, 38 per cent wished they had worked while at school, 38 per cent wished they had applied for more scholarships, grants and bursaries, 35 per cent wish they had looked for more ways to save money, and 31 per cent wish they had used credit cards more responsibly.
That's a pretty big financial wish list for young people who haven't even started their careers yet.
TD and Chun have a few suggestions to help post-secondary students make the grade in money management and avoid a few financial hazards on their way through school.
Calculate your total income and then subtract your expenses. If it's a negative balance then rethink your spending and if it's positive talk to your bank about smart savings strategies.
Hold yourself to a weekly allowance. If you're tempted to spend beyond this transfer your funds to a separate savings account.
Always pay your bills on time because a missed payment can have a negative impact on your credit rating and could impact your ability to borrow money to buy a car or a home in the future.
"Always pay bills on time and in full and consider setting up automatic bill payments online for regular expenses," says Chun. "Even if a cell phone provider gives you an extension on a bill your credit rating may still show that it was paid late."
Treat your credit card like a debit card and leave it at home on evenings out with friends. A credit card is a practical tool to use to buy books and supplies and can offer additional benefits such as rewards and insurance coverage.
"Credit cards offer on interest-free loan on new purchases for 21 days but only if the balance is paid in full by the payment due date," Chun says. "If payment on the full amount is made even one day later the cardholder will be charged interest on those purchases from the day they were posted to the account."
Your school's career centre can be a great resource for finding opportunities to help supplement your budget by finding a part-time job. If you already have one see if you can get more hours without impacting you studies.
Don't forget to check out possibilities for bursaries, scholarships and grants. You never know what you can get until you try.
And get your financial house in order.
"One of the easiest ways to avoid over-spending is to organize your finances," Chun says. "Take advantage of past statements to assess current spending habits. That history can help identify potential saving opportunities and build a realistic budget you can stick to."
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.
Copyright 2013 Talbot Boggs
© Copyright 2013