For many students, the end of high school is the beginning of a whole new set of life lessons. It may be the first time they live away from home. It may be the first time they borrow money. There are also new saving and spending decisions, student loans, credit cards and more.
How do students -- and their parents – get ready?
You’ll find valuable tools and resources right here. We’ve got fun and informative videos, calculators, straight talk and more.
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Remember: if you’re a student, you are in a very different place than someone just starting out in the workforce. You have not yet started making real money. You are focused more on your studies. And, of course, you want to have fun.
However, it is important to take your money choices seriously. The mistakes you make in college or university can follow you throughout the rest of your life.
For students who want to achieve financial success, class is now in session.
Saving money for education
Tuition fees are just the tip of the iceberg when it comes to the full cost of higher education. Total costs include:
- Fees to apply
- Textbooks and supplies
Living costs – if the student lives away from home
- Other fees, such as campus sports.
Use this University Cost and Debt Calculator to better understand the financial commitment and resources needed to cover those costs. It will help you develop a plan to deal with this commitment.
If you still have a few years to save for education, watch this video to learn more about your options and how to create a plan that works for you.
Learn more now
Budgeting on a student salary
No matter who is paying the bills, every student needs to create a budget and stick to it. Of course that doesn't mean there’s no room for fun. Budget it in. Remember, most people will look back at college as the time when they were the poorest, but they had the most fun!
At the same time, students don’t need all the latest gadgets, computers, clothes and cars to have a good time. These things can come after they have their first real job. By setting limits on spending categories and sticking to them, students will start out on a great path and form good spending habits.
It takes about an hour to set up a budget. Use this worksheet to help you plan.
Watch this video to find out where you may be wasting your money and how you can save more by cutting out costs.
Learn more now about saving, spending and paying off debt.
Managing student debt
Each year, thousands of Canadian students turn to government loans to help pay the cost of education after high school. These loans offer certain advantages over other ways to borrow, such as bank loans and credit cards. For example:
Students don’t have to repay the loan as long as they are in school. Most student loan programs offer a grace period of several months after post secondary studies end before repayments begin.
Students also don’t pay interest on the money they borrow until after they graduate. Compare that to a credit card, which can charge interest over 20 percent a year or more!
Just remember: government loans are meant to give you a helping hand, not to pay the entire cost of post secondary education. Students and their families are still expected to contribute some money. And it can be a real challenge to repay the loan after students graduate and start working -- and have other bills to pay.
According to the Canadian Federation of Students, many are faced with a debt load of more than $20,000 when they finish school. And about one in every five students who graduated last June with a student loan are now unable to pay it back.
Are you looking for a plan to repay student loans? This calculator offers three different options. By filling in different information for each option, the calculator will show which scenario best fits your repayment goals.
Watch these videos to learn more about managing student debt:
Using a credit card
This is one of the areas where so many students get into trouble. Credit cards have the potential to mess up your life. You do not need a credit card to make it through college or university. You would be better to pay cash for most things. It will help you stick to your budget.
Also, never use a card to pay big bills, like tuition or housing. If you can’t pay back what you owe quickly, you’ll pay a huge amount of interest over time. The best plan is to pay off your card in full each month.
Remember: credit card companies work hard to sign up students. That’s because they know you are likely to stay with the same card once you sign up. Also, they know that many students will run up balances before they really understand how the card really works – and how much interest they will have to pay.
Watch this video for a fun look at how credit cards work.
Learn more now about how to lower your credit card costs.
Avoiding frauds and scams
Have you ever received an email telling you that you won a lottery – even though you never entered it? Have you ever been told about an amazing job opportunity that pays big bucks while you work at home – as long as you pay a fee for your job training? Students are often easy targets for scams like these.
Today’s scammers are clever and it’s not always easy even for seasoned consumers to spot the frauds. Just think of all the victims in the headlines recently who lost their money to investment scams. Some of these people lost most of their savings.
How can you protect yourself from fraud? Knowledge truly is power. Learn more now about common scams and how to avoid them.
Taking advantage of your tax deductions
Did you know you can turn some education costs into tax deductions? A big refund can help pay those tuition bills each year. But students have to file a tax return to get the benefit.
Even if you have little to no income in the year, filing a tax return has its advantages. For example:
If you are 19 or over, you are eligible for the GST/HST credit. To get this money, you have to file a tax return and fill out the GST/HST application section of your return. If you are turning 19 before April 1, 2011, make sure you apply for the credit on your 2009 tax return.
Some provinces offer tax credits to low-income taxpayers, which you will receive in the form of a tax refund. As a student, you probably qualify. You may be able to get a tax refund even if you never paid any tax!
Students who worked last summer likely had a tax deductions made from their paycheques. If so, they can probably recover most of the tax, and some of the CPP premiums. But they have to file a return.
What if a student’s net income is so low, they don’t need to claim all their deductions? They should still file a tax return. Then they have two options:
They can transfer the deduction for tuition fees, the education amount or the textbook tax credit to their parents.
Or, they can carry the deduction forward on their return. That means using it in a future year when their income is higher.
Remember: it pays to take advantage of as many deductions as you can, but do not waste them. Learn more now