Toronto ON – Everyone should have access to a university or college education. However, the cost of post-secondary education in Canada continues to increase. According to a 2010 StatsCan report, 57 per cent of the 2005 graduating class had student loans and 27 per cent graduated with a debt load of at least $25,000.
If the class of 2012 is anything like the class of 2005, they too will be graduating with huge debt. After graduation, and if they are fortunate enough to find employment, they must learn how to responsibly manage their money and repay their debts. Some graduates may have a six-month, interest-free grace period to repay their loan; after that interest accrues on the outstanding balance and will be calculated as part of their monthly payment.
“Many of these graduates have gone to the school of “hard knocks,” learning about money management through trial and error while attending university – some might have had to skimp on food because they didn’t have enough money,” says Jeffrey Schwartz, executive director, Consolidated Credit Counseling Services of Canada, Inc. “Once they graduate, we need to provide them with the tools to manage their money, repay their loans and start saving for their future.”
Daniel (not his real name) held a steady part-time job all through high school and college. However, he will be graduating with more than $20,000 in student loans. Although the prospects for employment look good, he has little knowledge of how to manage money. “I wish I was smarter when it came to money,” says Daniel. “I never saved a penny and am now going to pay for it, plus interest, for many years.”
Consolidated Credit wants to help graduates like Daniel and offers the following lessons on good money management:
- Create a budget outlining your income and expenses on a monthly basis.
- Include savings and repaying student loans as expenses.
- Scrutinize your spending habits; determine what you can reduce or eliminate.
- Make saving invisible through automatic deductions from your biweekly pay and “rounding up” purchases made with your debit card; whichever you choose, make sure to put at least 10 per cent of your earnings into savings
- STOP eating at restaurants and ordering takeout! Buying groceries and making your own meals will not only lead to healthier eating, you will be spending much less.
- Before you spend your hard-earned dollars ask yourself if you need it or if you just want it.