How to Budget for Post-Secondary Life

Financing Your Post-Secondary Education
by Lisa Van de Ven

Forget about the schoolwork. Don’t think about what it’s going to be like to live away from home, if that’s your plan. Instead, right now, when you think about that step towards your post-secondary education, think only of the money.
    It’s one of the biggest sources of stress for students making the transition from high school to university or college, yet it’s one that many students don’t want to think about. In fact, some aren’t even sure how they’re going to pay for it at all.
    “I’m shocked at the number of high schools I go into where I’ll ask, ‘How are you paying for your education?’ and students will answer, ‘I’m not sure, I think my parents are,’” says Patricia Lovett-Reid, senior vice president of TD Waterhouse. Last August her team launched The Money Lounge, a Facebook group devoted to post-secondary students’ financial concerns.
    Open communication is needed, says Lovett-Reid, in order to build a realistic expectation of how your college or university education will be paid for. If your parents can’t contribute – or can’t contribute enough – there are alternatives, she says. And while those other alternatives may mean accruing debt, it’s what Lovett-Reid calls “good debt.”
    “There is good debt and there is bad debt,” she says. “Borrowing to buy the newest electronic device or the most fashionable piece of clothing would be considered bad debt. But borrowing to invest in your education helps your human capital and is hugely good debt.”

Making Money Last
Government-sponsored student aid programs are often the first option when it comes to paying for your education, says John De Heus, student financial services officer for the University of Western Ontario. But, he says, they aren’t the only option. Student lines of credit and loans are available at commercial financial institutions, and scholarships from your school of choice may help supplement your expenses. Meanwhile, some institutions also have bursaries available—which don’t rely on high school marks the way scholarships generally do.
    New students should always start by checking out the financial pages on their university’s or college’s websites, De Heus says. “[Students] want to know exactly how much they have coming into the program,” he adds.
    From there, budgeting can begin. The first step, says De Heus, is figuring out your fixed costs: the things you need to pay for no matter what (tuition, books, meal plans, housing, etc.). “You basically take the total of your amount of resources, less those total fixed costs, and that leaves you what you have for your variable costs,” he says.
    Variable costs are everything else—from that new pair of jeans you just “have to” buy, to checking out a show with your friends. To figure out how much you should be spending on all of that, De Heus suggests dividing the money left over, after fixed costs are covered, by the number of weeks you’ll be in school—about 34 in a traditional university school year, depending on your program. Use that amount as your weekly allottment, tweaking it as you go. To make up for overspending one week, for instance, take the same amount out of the next week’s allotted amount. “It’s a lot easier to spend or budget yourself weekly than it is monthly,” De Heus says. “Focusing on a per-week basis is more manageable for students.”

Credit cards and part-time Jobs
Some students will turn to credit cards as an easy way to pay for those variable expenses, says Lovett-Reid. It’s a common mistake for young people learning financial responsibility for the first time, and one that can lead to bad credit that can last long after college or university ends.
    “Don’t be credit seekers . . . applying for too many credit cards, or too many student lines of credit,” she says. “You’ll start to get declined and you’ll damage your credit rating.”
    Finally, both Lovett-Reid and De Heus recognize the real reason you’re enrolled in post-secondary education in the first place, which has a lot more to do with earning an education than it does with earning enough money to keep up spa dates with your friends. With proper budgeting – and being able to separate your needs from your wants – your financial concerns shouldn’t overpass your educational ones. And, at least to begin with – until you figure out your new school schedule – that might mean going without the funds from the part-time job you’ve gotten used to having throughout high school.
    “I think you want to do it prudently,” Lovett-Reid says. “Because really, your [priority] is to get the best marks and to get the degree in the program that you’re after. That’s your job.”

POV: Words of Wisdom

What’s the biggest surprise for students making the transition from high school to college or university?

“My biggest surprise coming to university was how few assignments, tests and other evaluations were scheduled for each class. Most classes had only three evaluations, meaning each was worth 30 to 40 per cent of my final grade. I made the mistake of thinking this meant I didn’t have homework to do every night and that studying before each test would be sufficient. Was I ever wrong!” – Janine Sutherland, 2nd Year, Concurrent French and Education, University of Windsor

“In high school, most exam questions were straightforward and easier than questions on the tests. In university the exam questions were as, or more, difficult than those on the midterms and quizzes. This surprised me in first semester, and I didn’t put nearly enough time into preparing for exams as I should have. I had other things going on that could have easily been pushed back, but I decided to continue with them and my marks suffered for it.” – Colin Mascaro, 2nd Year, Chemistry, University of Windsor

And a few words from two recent grads looking back on the post-sec experience:

“One thing I saw as a huge change was motivation. In high school, your basic form of motivation is getting out and getting to college. But as college progresses, and you near graduation, you see yourself working for a goal that feels more life-altering.” – Matthew Smith, Brooklyn, N.Y.-based illustrator

“When I attended OCAD I had to work extremely hard over the summers to save enough money for tuition, rent, school supplies, etc. My advice regarding school and finance would be to save as much money as possible before attending school, work part-time throughout school and apply for any grant or bursary possible. Any extra money helps!” – Michelle Demeulenaere, Ontario College of Art & Design graduate and owner of Painted Love Interiors