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Student savings are easier then you think

Take it from a recent university grad (that’d be me) finding yourself in an uncertain post-recession job market, saddled with a five-figure student debt load, is just about the worst introduction to the “real” world imaginable. Unfortunately, it’s also extremely common.

University or college is the first place that many young Canadians will learn to be financially independent, dealing for the first time with their own money, and in large quantities. Unfortunately, university is really a terrible place for fiscally nave 18-year-olds: tuition is higher than ever, campuses are filled with predatory marketers handing our flyers and coupons to lure students out of classrooms and libraries and into bars and malls, and the whole experience has taken on the appearance of a vast, money-sucking, debt-creation machine. (According to the Canadian Federation of Students, the national student loan debt load stands at nearly $14 billion, and its safe to assume there are more than a few pints of beer and pairs of $200 jeans accounted for in there.)

But precisely because our university and college campuses are such a nest of vipers, financially speaking, its a sink-or-swim moment for students, and a terrific learning opportunity. Below, some of our first-time tips for students, and parents.

Plan in advance–way in advance

This June, the Canadian Alliance of Student Associations released the results of a financial literacy survey of 20,000 undergraduate students from across. 75% of the polled students failed.
It seems very, very basic, but if someone has never dealt with their own finances before, even the simplest transactions and financial concepts, from bill payments to interest accumulation, can be flummoxing. It happens every year with incoming students, says Janet Peddigrew, a BMO district vice-president for Midwestern Ontario (and mother of a soon-to-be university student.) There are a significant number of those who are simply financially unprepared, and who dont take advantage of the financial planning available at their local bank. Speak with a family financial advisor about budgeting and making the most of your money.

If your children are a few years away from university, induct them into the world of personal finance now. If they dont have a bank account, open one. If they dont have a debit card, get them one. Help them plan for what they want to purchase, balancing their income with their expenses. Not every teenager is ready for a credit card but they should at least understand credit, especially those wholl be leaning heavily on loans for their education.

Make bill payments, credit card payments, and loan payments on time
Yes, you can miss a payment and your phone wont be cut off. But your burgeoning, unproven credit rating will suffer mightily after repeat offences. And youre just going to end up paying a small fortune in penalties and accumulated interest.

Budget for the semester, not the year
Im going to say from experience, Ive seen a lot of people spend their money too fast, says Peddigrew. Suddenly its winter semester and you dont have enough money to make it to spring.
Its easy to budget a certain amount of money for the entire academic year, only to spend 75% of it in semester one. Especially for students un-used to working within budgets, a shorter time frame helps to keep everything accounted for, and provides less time to hemorrhage money. For that matter, you may want to budget by the month or week.

Most importantly, says Peddigrew, Every student is different. Not all kids come from middle-class families and can run to mom and dad when the money gets tight, some are in more expensive cities (and) some students work and others don’t, maybe because their course-load might be more demanding. Theres a great deal of variation so theres no one approach that works for everyone.

Get a room
It depends on the school and city in question, but residence is not always or even usually a more cost-effective option. It has its benefits, including meal plans and ease of access to school, but any large university will have plenty of off-campus housing options nearby.

For example: at the University of Toronto, first-year students in rez can expect to rent a single room which may or may not be shared with a roommate. The room will be in an apartment with five other bedrooms or in a large, dormitory-style hall. Students will share bathroom and kitchen facilities. A shared room in the large Chestnut residence building will go for $11,900 for an eight-month academic term. This breaks down to 1,487.50 per month (this figure seems astonishingly high, but a full meal plan is included.)

A cursory scan of Craigslist roommate listings for the popular Annex neighbourhood within walking distance of the school turns bedrooms in student apartment shares (in which a student can have at last one room all to themselves) for as low as $450 a month, up to $600 or $700. If a student is a savvy grocery shopper, savings could be a huge.

A single room at most of McGills large residence halls goes $777.25 a month, without a meal plan. A decent single room in a nearby student rooming house can be had in the $500 range, or less if youre lucky. In fact, you could take that $777.25 and get an entire studio or one-bedroom apartment with it.
We could continue detailing the disproportionately high costs of residences in cities and schools across Canada, but suffice to say: do your homework and comparison shop.

Comparison shop mobile plans
Yes, mobile companies offer student rates, but in my own experience at least, a combination of high-pressure sales tactics and/or ignorance on the part of salespeople make it hard to get straight answers about exactly what plan will be most cost-effective. The best thing to do on is comparison shop for yourself on the web, perusing each wireless providers website.

And don’t be afraid to bargain if a sales rep tells you that evenings and weekends are unlimited, but evenings dont start until 9 p.m., dont be afraid to stare them down and pull out the My friend/brother/cousin is with Company X, and his/her evenings start at 7. They want your business, and there’s a very good chance you can bargain yourself into a better deal.

Most importantly, whether you’re with a big player (Rogers, Bell, Telus) or one of the big player-operated discount brands (Telus Koodo, or Bells Solo), look at your bill every month, and not just the total charges. Examine each and every charge and see if you’re being charged fees. Your bill provides a snapshot of how you use your phone how much time you spend talking, how many texts you send and receive, and when. Once you know how you use your phone, you can call up your provider and re-jig your plan to better suit your needs and hopefully save money.

Take advantage of student discounts
Peddigrew is big on the Student Price Card, which her bank offers free to students opening a new account. Dont overspend, she says, but there are a lot of student staples that participate with the SPC.
These include popular clothing stores and take-out restaurants. (A full list is available here.) Of course, theres always the danger that the SPC will just encourage more spending, given the clothes and food bent of the cards participating retailers. Discount or no discount, students living on loans might be better of avoiding the Armani Exchange. (And its hard to imagine most 18 year-old freshmen perusing the racks at Tip Top Tailors.)

Beyond the SPC, student discounts are widely available but also widely under-used. From public transit to major clothing retailers to software to mobile phone companies, the discounts and special pricing available to students are too numerous to mention.

There are doubtlessly many, many, many more in your community. Just ask. Especially at mom-and-pop shops, management may be willing to give students a break, even if there are no official student discounts.

Take advantage of student banking discounts
Every bank big and small, offers some kind of student banking program. They all provide a similar no-fee chequing account (usually with limited monthly transactions), similar credit and loan programs, and no-fee credit cards. (Peddigrew points out that BMO goes a bit further than most, offering a free Student Price Card with a new student account, as well as an SPC MasterCard, to which SPC discounts apply. They’ve also launched a new program called SmartSteps, a series of online planning tools.)

Check out the Big Fives student banking plans for yourself:
BMO RBC TD CIBC Scotiabank