Welcome back to school.
As you fret about the full-time slate of syllabi you just received and the huge word counts on those term papers that are due impossibly soon, let us help you address another fret many students have around this time of year: money.
Being broke and being a student often go hand-in-hand, but it doesn’t have to be that way. Here are some tips to see your personal finances through the school year.
1. Start by making a budget. Today.
To get started on a budget, you need to figure out how much money you have coming in and then determine how much you spend each month. Make a list of all the income you expect to receive in the form of student loans, money from your parents (don’t forget to say thanks) and employment income from a part-time job. Remember to account for any seasonal trends, like if you plan to pick up extra hours over the holidays or take time off during reading week.
Next, map out all the monthly expenses you’ll be incurring. The big ones for students are housing, tuition and expenses, and food. If there’s no money left over after paying for these, you’ll need to find a way to make a little extra money. If there’s a surplus, that’s your fun budget.
2. Choose the right financial products
Now is a great time to set yourself up for success by choosing the right financial products. There’s a good chance you’re still using the same bank account your parents signed you up for when you were six, and that’s not always a great idea.
Start by getting a chequing account that meets your needs. If you’re using an account with a monthly fee, you can save a lot of money by switching to a no-fee chequing account.
Next, get yourself a high-interest savings account. This is a great tool because it pays a much higher rate of interest than typical savings accounts. If your income comes in lump sums, like an annual student loan payment, you can use the savings account to earn interest on your money while it’s not being used.
Finally, look into getting a student credit card. It’s much easier to get approved for a credit card when you’re a student than it is after you graduate. Even if you don’t plan to use the card, sign up for one anyway to start building personal credit. If you don’t trust yourself with a credit card, give it to your parents to hang on to. Or freeze it in a block of ice so you’ll have to really work to get at it.
3. Make a strategy for saving
Even though you’re probably on full spend-mode while you’re at school, you still need a strategy for saving. Having some money saved will soften the blow of unreliable income, big expenses, and a high potential for expensive emergencies.
One strategy is to use two bank accounts to keep yourself from spending all your money when there’s a little more to be had. Have all of your income go into your high-interest savings account and set up a regular transfer to your no-fee chequing account. On the months when you make more, the extra will be safely stashed in your savings account. When you’re making less, you’ll have some savings to draw from. And if you stay disciplined and don’t withdraw extra money from your savings account, you might end the year with some cash leftover.
You could also choose to deposit any extra money into your savings account. That could be cash from a side hustle, gifts, tips, or your bottle returns. Even if it’s only a few dollars a month, it could add up to something significant over time that you’ll value a lot more than an extra slice of pizza today.
4. Study and save
Keep your finances under control this school year by following these simple tips. By making a budget, using the right financial products, and having a strategy for saving, you can take money off your mind and use that precious brainpower to study for midterms.