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Handling your finances as a student can be crazy stressful, and we wanted to help make it easier. Here are some words of advice to help you crush your finances this school year.
Weigh your income against your expenses
Everyone is always yelling at students to save money. After awhile, it stops registering. So try this instead: Calculate the difference between your income and your expenses. Are you spending as much or more than you earn? What do you think you should do about it? The answer is different for everyone, but if you really want to master your finances, you have to understand your personal financial situation and draw your own conclusions.
Quick Tip: There are lots of online calculators, like this one from Smart Asset, that you can use to help you compare your income and expenses.
Let’s get digital
Leverage the power that technology will give you over your finances. Budgeting and saving are the bread and butter of financial literacy, and now there are many tools you can use to help craft your first budget (like Mint) and automatically save the suggested 10-15% of your income (like Mylo). If you can afford to save more, do it.
Quick Tip: Set up a recurring deposit with Mylo. This will ensure you’re putting money aside every week.
Give yourself some credit
Many students have misconceptions about the use of credit: They think credit is just a card you use to make large financial purchases. It’s true you can use a credit card to buy things, but your personal credit rating is something different. It’s a standing score that lenders use to decide what rate they will give you when you borrow money. If you have a bad credit rating, you probably have a history of not paying your bills on time, and banks will likely charge you a higher interest rate when you want to borrow money. This can be really costly over time. Paying your bills on time (and not buying things that you don’t have the money for) in university will help you in future.
Quick Tip: Check your credit score for free with Mogo. Contrary to popular opinion, when you check your own credit rating, it won’t have a negative impact on your score.
Apply. For. Scholarships.
Fifteen million dollars of scholarship money goes unclaimed every year in Canada. To be clear: that’s not individuals who win a scholarship and then don’t claim the money. That’s money that no one even applies for. That money could be your money. Apply for as many scholarships and bursaries as you possibly can.
Quick Tip: Scholarships Canada is a hub where you can find $200 million in awards. The Government of Canada also shares merit-based scholarships for post-secondary students.
Find a mentor
Have some frank conversations about finances with your parents, if that’s an option for you. If it isn’t, find someone else that you trust who can give you some unbiased advice (i.e. not someone who is trying to sell you something.) A financial planner may be trying to push a product you don’t need, like a loan or credit line. And no, you don’t have to find a financial expert to mentor you. The point is to start talking about your finances so that you can start building your awareness and figuring out what you don’t know!