How to Prepare Your New University Student for DebtAug 01, 2018
The introduction of tuition grants from the Government of Ontario will certainly help a large number of post-secondary students avoid significant student loan debt. That doesn’t mean students heading off to university or college in September are immune from taking on debt though.
Back-to-school shopping season can be expensive; even more so if your child is moving away from home for the first time. What steps can parents take to help prepare children heading off to university or college to deal with the financial challenges they’ll face on their own?
From ways to make school shopping a little less expensive to advice on how to avoid credit card debt, the following tips can help minimize your university or college-bound child’s debt load during school.
Have a conversation about money and debt management
The reality is credit cards can be a very useful tool. Used wisely, a credit card can help a new student begin to build their own credit history. But, it can also be very tempting to run up charges when money is tight. Consider setting aside some time for a back-and-forth open conversation with your child on the subject of credit cards. You can discuss topics such as:
- How to use a budget to help track credit card charges to avoid overspending.
- The impact of interest charges – how a small purchase can end up costing a lot more if it’s not paid off right away. Online debt calculators like this one are a great way to demonstrate how this works.
Parents and kids should feel free to extend these discussions to other relevant topics. For example…how much financial support will parents be able to provide their kids during university or college? It’s always a good idea to make sure everyone is on the same page, and that guidelines are clear. Set aside time for questions, and research topics together if you’re unsure of answers.
Look for ways to cut down on back-to-school spending
Last year, parent of school-age kids expected to spend over $800 on back-to-school supplies — that amount could easily be higher if your child is going away for university. There are lots of great ways to help them get the supplies they need for less.
Need to furnish an off-campus house or apartment? Check sites like Kijiji. You can often find bigger-ticket items in great condition at a fraction of the price of buying new. If necessary, make sure to coordinate with roommates to ensure that you’re not buying duplicate items.
Opting to buy used textbooks can also save hundreds of dollars. It’s a win-win investment, because your child can turn around and sell those textbooks to another student when the course is finished.
Here’s a list of some other online resources that can help your child keep school spending in check all year:
- Budgeting: Samples and Tips – FuturFund
- How to save thousands of dollars at university – Macleans.ca
- 15 Ways to Save Money in College – TeensGotCents.com
- Printable Dorm Room Essentials Checklist – Squawkfox.com
Share resources with them to help strengthen their financial literacy
Moving out on your own can be intimidating and even overwhelming. Taking on credit card debt may not seem like a big deal in the beginning, but it can bring unnecessary stress. Provide your child with some resources to help them learn how to manage their finances and deal with debt.
From the Financial Consumer Agency of Canada to personal finance bloggers there’s a ton of useful information out there. Here are a few that are definitely worth checking out:
Prepare your child with the basic knowledge they’ll need to deal with debt and manage their own finances before they head off to university or college. That doesn’t mean they won’t run into a few bumps or challenges along the way — that’s why it’s important to keep the conversation going and the lines of communication open.
Is your child is heading off to college or university in the fall? Have you talked to them about debt and budgeting? #BacktoSchool #CollegeBound #DebtSolutions