VG Career

This fall, university freshmen will experience a kind of freedom that high school couldn’t give them: their very own personal credit card. At first, life will seem easy. Loving those shoes? Swipe. Craving a venti mocha latte? Swipe. Long-distance calls to friends? Swipe. After all, the ‘I can afford it now, deal with it later’ philosophy is the best way to show mum and dad you’re independent.

But for Andrea Baxter and Angela Self of The Smart Cookies, achieving financial independence isn’t that simple. In reality, the credit card party always ends up the same: a hangover in the form of big, bad debt. During university, both had ignored the biggest elephant in the room. Only after graduating did they find themselves snowed under piles of credit card bills and stuck in jobs that could barely pay rent. “A lot of students are going into university with little knowledge of finance,” Baxter says. “It’s easy to get into debt because students are bombarded by credit card companies, but they don’t know how to use it.”

Taking Control

Three years ago, Baxter and Self decided to get smart with their money. Inspired by an episode on Oprah, Baxter, Self and three other women formed The Smart Cookies to help young debtors confront a topic they love to avoid. “For us, money wasn’t a popular topic,” says Self, who, as a teenager, had always spent her paychecks the day she got them. “We’d rather talk about relationships, work or sex. Money never came up, unless it was where you got those shoes.”

It’s natural to want that sleek new cell phone. But can you really afford the plan? Do you really need Internet? These are the types of questions Baxter and Self say students forget to ask themselves. Tempted by the seemingly attractive deals, they whip out their credit card even before planning a budget.

This doesn’t mean you should stuff cash under your dorm mattress or begin a no-spending ritual either. But remember, the credit card isn’t as “priceless” as it looks on television. Students often forget that after they swipe the card, they owe the original amount spent, plus interest if they miss the deadline. It’s like a delayed debit card that punishes irresponsibility.

But don’t fear the credit card altogether. If you want to use it, then do so wisely. Learn to build your credit, because ten years down the road, your ability to pay the bills on time will determine whether the bank gives you a loan (for a car or house). And don’t feel sheepish if you can’t define “credit score.” It’s better to learn now than wait until you’re on the brink of bankruptcy. If you do find yourself behind on payments – take a deep breath – and jot down all of the possible solutions.

The Recipe for Smart Money Management:

•    Know your numbers: Keep track of what you are bringing in and what is going out.
•    Set long-term goals: Do you want to study overseas? Start your own business?
•    The Rather Factor: Would you rather buy an expensive purse or save up for a flat in the city?
•    Imagine your perfect day and compare your living conditions to that: Does it match? “For me, this was life-changing,” Self says.
•    Talk openly about money: If you’re unsure about what to do, don’t feel guilty talking about it.
•    Find mentors: “Even if it means going out for coffee with this person,”
•    Be creative about part-time jobs: Get discounts at your favourite store by working there.


Credit card: A card issued by a financial institution, such as a bank, that lends you money. You will receive a credit card statement in the mail that requires you to pay back the amount spent by a certain day. You will be charged interest if you miss your deadline and the amount you owe will increase so long as you delay the payment. 

Credit score: A number determined by lenders or banks that determines your worthiness as a borrower. The higher your score, the likelier it is that lenders will increase your credit limit.

Debt: An amount borrowed by someone with the intention of paying it back later, plus interest.

Interest: The amount banks and lenders charge you for borrowing money.

Interest rate: The amount banks and lenders charge you for borrowing money, expressed as a percentage.

– By Denise Law