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Student budgeting 101: Saving for your post-secondary school year

Student budgeting 101: Saving for your post-secondary school year6 expenses every student needs to budget & save for today.


Rising tuition rates are making all the headlines when it comes to the cost of attending university in Canada. But for today’s Canadian students and their families, budgeting for tuition alone is just your first step. By planning ahead and saving for expected and unexpected costs, you can have a smoother journey toward a debt-free education.

 

Consider these six key expenses that every student will face during their post-secondary year:

 

Tuition and fees: $7,000

In 2017/2018, the average tuition for full-time undergraduate programs across Canada was $6,571. That number doesn’t take into account the additional compulsory fees that almost every student across Canada sees tacked onto their university bill at the beginning of a school year.

Fees for services such as athletics, health, student associations, and off-campus class trips are often charged around the same time as tuition, so you’ll need to have the funds ready at the start of the year. On average, these compulsory fees add another $880 for Canadian undergrad students.

Once you cover tuition and additional fees, make sure you consider all the additional costs throughout the year.

student budgeting

Living expenses: $2,000 – $16,000

Whether you’re going to be attending school in Manitoba or moving further away from home, you’ll need to plan ahead for living expenses — and those aren’t cheap.

If you want to live on-campus (and there are many excellent reasons to do so), you’ll likely need somewhere in the neighbourhood of $8,000 to $16,000 for your rent and a mandatory meal plan. These costs vary substantially between schools, but generally are “all-in” figures that include Internet, some modest furniture and electricity for the duration of your eight-month stay. Travel and moving costs can also add up depending on how far away your education takes you.

Some students manage to cut costs by living off campus (while some could actually spend more, depending on if the accommodations). Either way, you’ll also need to add in many more costs when living in your own rental unit. Not only does your budget have to include rent (which can be shared with several roommates), but remember to factor in the cost of groceries, tenant’s insurance, furnishings, utilities (gas/electricity, water), Internet, TV and any other items not mentioned in your rental agreement.

It’s also worth considering that many rental properties operate exclusively on 12-month contracts. If you plan to move home during summer, there’s no guarantee that you’ll find someone else to sublet your apartment. In some cases, tenants aren’t even allowed to sublet their units, so check your rental contract first.

Other living expenses can add up fast. Many students who live away from home for the first time will experience sticker shock when they have to pay for everyday items such as laundry detergent, cleaning supplies or bathroom products out of their own wallet. It’s definitely worth adding these “hidden” costs into the equation when making a decision about whether or not to live at home during your school years.

Supplies: $1,000 – $2,000

Student costs don’t end after you pay your tuition and put a roof over your head.

You’ll also need to have the right classroom supplies throughout the year, such as a personal computer, photocopying credits and a trip to the campus bookstore. That’s going to cost somewhere in the range of $1,000 to $2,000 (at the very least).

Transportation: Included or an additional expense?

One major decision is whether to embrace public transit or purchase your own vehicle. While the freedom of having your own car is a nice luxury, make sure you budget for maintenance, insurance, gas and parking when weighing the affordability of getting behind the wheel.

Since many schools are now automatically charging students for public transportation as part of their compulsory fees, driving your own vehicle is one area where you may choose to cut back to keep your budget in check.

Entertainment: $500 – $1,500

Sooner or later most students want to take a break from their studies. While colleges and universities offer a ton of free entertainment options, it’s important to budget in any costs associated with the odd night out or moderate luxury purchases.

Small costs such as a daily double-double, or even birthday presents for your friends and family can be easy to forget about as you plan for your school year.

student budget

Your total: $17,000 – $27,000

To recap, consider all your expenses throughout the year to determine how much money you’ll need to save. You might fall in a low, moderate or high budget, depending on your anticipated expenses.

Be realistic with your costs as you review your own personal financial situation — it’s better to face the reality of your budget than to be surprised later in the year.

Lower budget Moderate budget Higher budget
Example: Living at home with parents Example: Living in the dorms or living off-campus with roommates Example: Living in your own place off-campus and driving a car
Tuition $6,571 $6,571 $6,571
Compulsory fees $880 $880 $880
Living expenses $2,000 $8,000 $16,000
Supplies $1,000 $1,000 2,000
Transportation $0 $500 $5,000
Entertainment $500 $500 $1,500
TOTAL $10,951 $16,951 $26,951

If you’re still able to live at home and parents are helping out by splitting grocery, rent and utility bills, then you might be able to reduce costs and have a yearly budget in the $11,000 range.

On the other hand, if you move out to attend college or university, you’ll need a little more savings — at least $17,000 per year.

On the higher end of the budget, if you’re adding the extra expense of living solo off-campus while also driving a vehicle, you might need to save up to $27,000 per year.

Students and parents need a game plan 

The days of being able to pay for your full school year just by working a summer job are gone for most students. For parents who’ve seen the cost of a post-secondary education rise at roughly triple the rate of general inflation for the past two decades, that can be a tough reality to face. Preparing well in advance and saving for the true costs should be the name of the game.

Whatever mix of student savings, scholarships, RESPs, student loans, and part-time work you decide to go with, having a budget and a plan for how you will cover post-secondary costs is essential to long-term success. Budgeting and saving in advance will help you manage your stress, be prepared for your studies and get more out of the university year ahead.

Planning to save money is one thing. But without the proper knowledge and advice, you may find that your journey takes longer, has a few bumps along the way and in the end, you may find yourself in a different place than where you intended to go.

 

Come in and talk to one of our advisors. We’re ready to help you make a plan that works for you, and help you get where you want to go.

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