Avoid the student-debt trap by following this simple guide

Why is planning for post-secondary so important right now?

With the rising cost of tuition and soaring rates of student debt in Canada, planning for post-secondary education is more important than ever. Students need to make sure that they are considering all aspects of the educational journey (before, during and after) during their planning process.

Before Post-Secondary

Who is going to pay? This is a really important question to ask well in advance of attending post-secondary. Open communication with family about how schooling is going to be funded is a conversation that needs to happen early on rather than two months before graduating high-school.

Here are a few possible sources of funding.

• RESPS

• Student loans

• Part-time job

• Scholarships/Bursaries

Another important discussion is education planning and discussing with your parents your goals and what you want to do. What do you want to study? Where will you go to school? What are the job prospects after? We live in a rapidly changing world, so it’s important to do a little bit of research on your chosen path of study to make sure it will be a viable career path in four years.

During Post-Secondary

Having a realistic budget in place is a really important step when starting post-secondary. Walk through an average week of spending and make a list of all of the expenses that will occur. Will you need a bus pass? What will you eat? What supplies do you need? This is also a great way to think about the impact of your spending. If making a ham and cheese sandwich for lunch is going to save you $50 throughout the week that could be your “fun” money for the weekend.

Knowing how to manage credit is another important consideration. If you have a credit card ensure that you are using it for small purchases and paying it off in full each month. A credit card can be a very effective tool in building credit, but if used improperly it can impact your credit for many years to come.

After Post-Secondary

Sometimes the first reaction after school is to pay down your student debt as quick as possible, however, it’s important to look at your overall budget to ensure that you are making realistic payments and saving appropriately at the same time. A financial advisor can assist you with putting together a loan repayment plan while still focusing on other life goals moving forward such as saving a home or vehicle. Maybe you didn’t get the job you envisioned, or are going back to school? Working with an advisor allows you to have those important life conversations.

One last thing

Master the skill of budgeting- this can’t be stressed enough. Budgeting is one of the most important financial skills throughout your life and it’s a skill that sets you up for success long-term. Many online banking platforms now have digital tools to assist with this so take advantage of them.

Happy studying!

Dustin Read is a Branch Manager with Valley First, a division of First West Credit Union. Connect with Dustin at dread@valleyfirst.com or 250-860-1900.