Valley First

Student Tips to Avoid Debt

Advice to help post-secondary students stay out of the debt trap

The initial excitement of life on campus is also met with several challenges to face, including paying for all the costs associated with you post-secondary education. Tuition, books, equipment, student fees, computer programs, lab fees, living expenses—the list can be overwhelming and students who aren't prepared can quickly find themselves running out of money.

So what can students do make sure they finish their education without excessive debt?

People thinking about post-secondary education need to take time to prepare and educate themselves on the total cost of their education. Although most will come out of post-secondary with some level of debt, there are ways to make sure it doesn't get out of control.

Have a full picture of what you're getting into

Make an assessment of your financial situation and understand what it really costs to be a student. Many students tend to underestimate what their costs will be. Although the large expenses are usually budgeted for, small purchases and unexpected costs add up quickly. Make sure you have a full understanding of exactly what you will be paying for and how you will pay for it, otherwise you're setting yourself up for trouble later on. Most schools have a financial aid office—they can provide you with a realistic estimate of your costs.

Budget and plan a year in advance

A budget is a valuable tool, but saving money and applying for financial assistance and scholarships takes time. Ideally, students should look for funding opportunities as early as Grade 10 or 11. Too often they wait until the last minute to apply for financial support, leaving them with fewer options. Start saving and planning for how you will pay for school at least a year in advance. Most scholarships have application deadlines far in advance of the school year, so be aware of when they are so you don't miss your opportunity to apply.

Budgeting well in advance and keeping track of your savings gives you a good picture of when you're on track and when you're not. That way you can take steps to increase your savings, like finding a second job during the summer or applying for a part-time job on campus during the school year, so you aren't surprised with an unexpected budget shortfall.

Don't take the bait

It's no secret that credit card companies target university students. It may seem like a great idea to have a few thousand extra dollars at your disposal to spend in emergencies, but once you have the card and are feeling a bit stretched, it can be easy to start spending. A few quick purchases can quickly turn into a large amount that takes years to pay off and costs you a lot in interest. If you absolutely need a card, make sure you get one with a small limit to lower your potential risk.

If you have the funds, don't waste them

Students who are fortunate enough to have the money to cover their costs need to make sure they are spending it wisely. It can be overwhelming to suddenly have thousands of dollars at your disposal and managing that money to make sure it lasts the whole year can be a challenge.

To make sure you don't run out of money halfway through the semester, allow yourself a set amount each week based on your available funds to spend as you like. Take it out in cash at the beginning of each week and then once you've spent it, you're done until the next week. And remember, the convenience of student loans and lines of credit must be weighed against the reality that at some point, it all needs to be paid back.

There's no doubt that paying for post-secondary education is a challenging. But with some careful planning and wise decisions, you can graduate with a lower level of debt, putting you on the path to a brighter financial future.

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We encourage you to contact us or visit one of our branches for more information on how Valley First can make your financial life simple!