You have made the decision to go to school to set yourself up for a career you will love. Many careers are not only rewarding from a self interest level but also can be financially gratifying. Before you go planning your whole life, here’s a myth many people believe to be true. Making lots of money = financial success. This isn’t true. It’s not even close to true. It’s so easy to make financial mistakes. It’s so easy to spend more than we earn, regardless of income. Don’t wait until you are making money to figure out what you should be doing with it. See this list of household finances for students:
Basic Budgeting
Try to come up with a basic budget while you are studying. It doesn’t have to have you finish your school year with money in hand, just have a plan to make the money you have access to last through each year. This way it will limit the debts you end your schooling with.
Beware of instant credit
Beware of Instant Credit: Now that you are over 18, banks and other companies will start to offer you credit cards. Getting a student loan to fund your future is one thing, going on a shopping spree with a high-interest credit card is something else entirely. Choose a no-fee credit card, keep the limit low, and avoid using it regularly and pay off any balance monthly
Make use of Savings
Even if you have debts you can still use savings. OSAP and some student loans don’t require you to pay interest until you are finished studying. If you don’t need all of the money offered to you, or you are working throughout the year, you can set money aside in a TFSA. It can earn money tax free for you, which will give you a taste of investing. Once it comes time to pay it back, some of the gains can be used to pay even more of the debts off or be used for other goals.
Plan for Emergencies
Day to day finance almost never goes perfectly to plan. You can budget all day long but unknowns arise and they cost money. Try to plan for unknowns – you will have to do this the rest of your life anyway.
Educate yourself about money
Schooling might be the biggest financial investment in your life. Learn everything you can about money while you are there. Learning about money and developing good habits with it may set you up for financial success even more than a great career can.
Learning about money is a lifelong journey. But these tips for household finances for students is a great way to start that journey!
This information has been prepared by Raymer Financial who is an Investment Advisor for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this document comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces in which they are registered.
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