How to Be Smart When it Comes to Student DebtAug 01, 2018
Whether you’re heading to college or university this September, post-secondary education is a great opportunity to expand your mind and learn new skills. Not all of the things you learn will come from your textbooks and lectures, however. In fact, one of the most important skills that you’ll learn is how to manage your money and avoid adding unnecessarily to your debt load.
Student debt is a necessary part of attending university or college student for many Canadians. Statistics Canada reports that the average Canadian university grad leaves university with over $26,000 in student debt.
Whether you’re funding your education with government or private loans, it’s so important to be smart when it comes to student debt. Here are a few student debt dos and don’ts to keep in mind before you head off to school in the fall.
Do use a budget to manage and track your expenses
In order to avoid spending more than you planned (or should), a budget is key. It’s also really easy to create one. You don’t need any fancy tools or tricks to create a simple budget to keep you on track. A budget worksheet will help you determine your fixed and variable expenses and plan your spending accordingly.
Personal finance writer Desirae Odjick offers a free one-minute budget template (what could be easier than that!) along with some common sense budget advice on her website Half Banked.
Do use technology to help you stick to your budget
While creating a budget is relatively low-tech, staying on top of your spending doesn’t have to be. Money management and budgeting apps allow you to keep track of your spending using your smartphone. These apps even let you create financial goals and track your progress as you work to achieve them.
Do look for a part-time job to offset your education costs
One of the best ways to reduce the amount of student debt you’ll owe after graduation is by working part-time to offset the costs of going to school. According to our 2017 poll about student debt, working a part-time job was something that many college and university grads wish they had done during their study period.
Don’t forget you need to pay it back
Finally, when you’re focused on your studies, meeting new friends and experiencing new things, it can be really easy to forget all about your student loans – especially the fact that you’ll need to pay them back someday. It’s important to the bigger picture in mind – it will motivate you to stick to your budget, spend within your means and keep your overall debt load as low as possible. When graduation rolls around you’ll be happy you were smart about your student debt.
Need some inspiration? Personal finance writer Steven Van Sluytman shares his tips and strategies for graduating from university debt free.