Having that university or college letter in-hand comes with a lot of excitement, and maybe a bit of relief. But it can also lead to worry and concern about how to pay for this long-anticipated post-secondary education. How do you figure out how much you need? What are the options if you aren’t eligible for or don’t want a government loan? How does having a part-time job affect how much you borrow? Should you have a chequing or savings account? Is having a credit card a good or bad idea? Having a better understanding of your finances and having a plan of action can alleviate the pressure that comes with having so many questions. Read on to feel secure and informed about your decisions.
How will you pay for it?
There are a lot of numbers to crunch when it comes to understanding your finances for school and making smart decisions. Start with calculating your school expenses for the upcoming year. This includes program tuition and also all other costs associated with attending school, such as books, cost of living, and transportation. Next, look at the amount of money you can contribute. This includes personal savings, parental contributions, and any money you’ll earn if you plan to work and earn a paycheque during the school year. Subtract the total of your income and savings from your calculated school expense to find how much more you need.
If you need to borrow to finance your education, as many students do, government loans are helpful but are not always enough. Also, not all students are eligible. Other options include a student line of credit or student loan. As long as you're a full-time student, you don’t need to pay the monthly interest and payments until six months after leaving your educational institution.
What else do I need?
- Make a budget and stick to it. This will help you manage your monthly expenses without over- spending and running out of money before the end of the school year.
- Have a chequing account… or two. You’ll need this for expenses and to pay your rent and utilities if living off campus. Some student chequing accounts often offer great benefits that regular chequing accounts lack. OMISTA’s Free & Easy chequing has no monthly fee and provides unlimited transactions of almost every type you’ll need. You can use the OMISTA banking app on your phone for all of you day-to-day banking, including depositing a cheque by taking a photo and email money transfers.
- If you decide on two chequing accounts, the first should contain all your savings and income for the year. This is from which your tuition and accommodation-related expenses should be paid. Use the second account for expenses that you have more control of, such as transportation, groceries, and fun money. You will have control of staying on budget if you overspend on fun by making different purchasing decisions for the rest of the month (read: lots of instant noodles for the rest of the month!).
- Apply for and have a student credit card if you use it only for emergency purposes or for major purchases of items you need. A credit card can help you establish credit while you’re attending school. If you keep you credit in good standing, this can help with your student loan approval next year, and other credit needs in the future. If you make your payments on time, you’ll never pay interest. If you’re worried about ending up with a credit card bill you can’t pay, apply for a low credit limit. Be sure to look for a credit card that offers the best rate and with no annual fee, before being enticed to take a higher interest card once you get to school. OMISTA’s Student Mastercard is a no-annual-fee card with one of the very lowest student interest rates at 11.9%.