Being accepted into university, college or grad school is a major milestone in your child’s life. Before they head off to campus in the next couple of weeks be sure to advise them on how to attend post-secondary without racking up unnecessary debt.

A study conducted by BDO Canada found that 77 percent of Canadian graduates have regrets on how they spent their money while in school. When asked, they said they wished they would have spent less on nights out with their friends, electronic gadgets, and coffee.

Here are a few pointers to share with your kids as they get ready to head back to school.

Plan. Help your student create a budget where he lists out what he needs versus what he wants for school. If your kids are living away from home for the first time, help them figure out how much they can afford to spend each month.

Pay bills on time. It can be challenging to juggle studies, extracurricular activities and social engagements while keeping track of financial obligations, but it is important to pay their bills on time. A missed payment could have a negative impact on their credit rating, affecting their ability to borrow after graduation; for something substantial like a car or a home.

Don’t treat a credit card like a debit card. Nearly one-third of students wished they had used their credit cards more wisely while they were in school. Remind your kids to only use their credit cards if they can pay off the balance in full at the end of the month. Furthermore, taking cash advances from their card is not advisable as the interest starts accumulating the moment the transaction is complete.

Apply for scholarships, grants, and bursaries. Most post-secondary institutions offer a range of scholarships and bursaries to students with financial needs, not just academic or athletic achievements.

Consider loan options. It is important to consider how long it will take your student to pay back their student loan, and in what increments. Make sure they consider the interest rate; any repayment grace periods and the loan terms and conditions.

It is important to teach our kids to use credit wisely and build a positive credit history. Lead by example; show them your own Cash Flow Plan; if you still don’t have one; give me a call.

Have a great weekend,

Tracey and Paige 

Sources: 

https://www.advisor.ca/news/industry-news/4-tips-to-send-kids-back-to-school-without-debt/

https://globalnews.ca/news/3755628/canadian-student-loans-regrets/

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