School Finances 101
Aug 29, 2010 
Calgary Herald | By Mario Toneguzzi
Budgeting and financial planning are probably the last things students want to think about as they head back to school.
After all, they're really not fun and exciting topics for the 17-to 25-year-old crowd.
But it's something they need to seriously pay attention to so they don't fall into financial pitfalls they will end up paying for beyond their school days.
"Probably one of the biggest troubles we face is the fact that we love instant gratification. We love spending money. Impulse buying. And that's something that I believe we really need to control," says Kelsey MacDonald, a 20-year-old University of Alberta student in her fourth year studying human ecology while majoring in fashion.
The Calgarian is also spokesperson for Servus Credit Union's Young & Free program, which is creating a dialogue about financial issues and management among the 17-to-25 set.
"It's really important to have a plan. If you have a plan then it's way easier to stay on top of your finances and you can plan ahead. Will your summer job cover all your expenses for the year or will you need to get a part-time job part way through the year?" says MacDonald, who figures it will cost her roughly $10,000 to attend school in Edmonton this year.
"You just have to plan ahead and know what your expenses will be -- whether that will be tuition, rent, utilities, transportation, food -- and you can't forget the unexpected expenses because that always happens and that tends to be what will mess you up."
But planning and budgeting isn't an easy topic. MacDonald says it's "scary" for those in her generation.
They've tried it before but they don't stick to it. Through a daily blog and videos, MacDonald is hoping to reach her peers and make financial planning and budgeting and other financial issues fun -- or at least interesting.
"You have to look for any way that you can to save money and keep track of your receipts," adds MacDonald.
"If you keep track of your receipts, then you can look at them on a weekly basis and realize that you might be spending a little too much on lattes or things that might not be significant enough that you should be spending your money on. So it's not only a good habit to get into budgeting wise for now but also for the rest of your life."
A recent poll for RBC indicated the majority of post-secondary students (57 per cent) said they plan to work during the school year to help pay the bills.
Three-quarters of students (77 per cent) believe working part-time during school will impact their grades, while six in 10 expect to graduate with debt and 74 per cent don't use a budget. The survey found debt management and budgeting are challenging for students, with just half regularly monitoring where their money is going (52 per cent).
"The student experience brings new-found responsibilities like keeping good grades, living on your own and balancing a budget, which can be very stressful," says Kavita Joshi, director of student banking for RBC.
"Proper saving habits can lead to working fewer hours, thereby freeing up more time for studying and enjoying the university or college experience."
A TD Canada Trust Education and Finances Survey says students in Alberta are the most likely in Canada to stress about being able to afford the basics like rent, tuition and food.
It found that 28 per cent of students are stressed and another 31 per cent are anxious that it will be a challenge for them to manage.
The survey also revealed that 41 per cent of Alberta students are spending more money than they save.
Sixty-eight per cent project they will graduate with some debt and 20 per cent predict they will owe more than $25,000.
"Amassing enough money for post-secondary education can be a challenge, but it is much more economical to save ahead than to borrow at the last minute," says Carrie Russell, senior vice-president at TD Canada Trust. "That said, if students are heading to school in the near future and have not put away enough, they should pursue all potential avenues available, such as a part-time job, scholarships, bursaries and assistantships."
Kelsey McColgan, 21, is going into her third year at Mount Royal University's Bachelor of Communications program, majoring in information design. For this semester, she is spending $3,100 for a full-course load.
"Probably one of the biggest tips I think, especially for first-year students, is to pack your lunch every day. You'll save tons of money if you don't have to buy a lunch at school every day," she says.
"Take the bus because you have to pay for it anyway (through student fees). Or carpool.
"Budget your time wisely. I've held down a full-time job at Staples while going to school full time. So it is possible. Sometimes you have to make sacrifices in different areas of your life, but it is possible if you budget your time well enough. I always have a plan of my whole week before I start the week of when my homework time is, when I have to work and that's how I'm able to pay for school because I wouldn't be able to if I wasn't working. I would have a ton of student loans. I don't have any. It's all paid for."
McColgan's friend Amanda Howard, 23, is also in her third year in the same program. For the first two years, she had student loans.
"I found it was just enough money . . . It's just enough money to get you by and it seems it goes really fast. But for the next two years I've been saving and I'll be paying for them myself," she says.
"I'm a hardcore saver and also I work quite a bit. It's sacrifices and finding time for work and friends in school is really hard."
McColgan says she doesn't really make up a budget. She's just very, very frugal.
What it all comes down to is spending money wisely in a number of different areas and seeking deals wherever they can be found.
"Don't be stupid. That's one of the main things. A lot of people spend their whole year partying . . . and that can be expensive, like $100 a night. Just be wise," says Howard.
mtoneguzzi@theherald.canwest.com
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