Tips to help manage student finances

Your young adult’s first financial education lessons

Soon enough, your teenager's primary financial institution will no longer be the BMD (the Bank of Mom and Dad).
Whether it’s for trade school or university, student life will quickly teach them how to be more independent and to fend for themselves. Well, that's the plan, anyway.
Before they head out to classes, here are a few things you can do to help them get their financial house – or dorm room – in order.

With high school behind them and new roads ahead, this is an exciting time for your child. Sure, you may be a bit melancholy – your baby’s all grown up! – but you’ve done a fantastic job raising a learner and they are going to do just great.

Of course, there is one more very serious thing you have to do – see to it that they’ve learned the value of a dollar and are ready to tackle the financial responsibilities (and challenges) of student life.

Get the right bank accounts and credit cards

Be sure your student has the right account to meet their needs. Most financial institutions have a low-fee student package but be wary; some "no fee" accounts only let you do a very small number of transactions free. Figure out how much will be done online, through a mobile phone, at an ATM, or in branch.

A credit card is useful because it can help your child establish a credit history and can come in handy, especially in an emergency. Advise them to shop carefully. Some feature no annual fee; others offer reward points.

Once they have the card, you can support them with reminders that they need to try to pay their bill in full on time every month. Too many students have been caught up in the novelty of a brand new credit limit, and the consequences of late payments generally haven’t yet been clearly understood in terms of long-term impact on credit ratings.

Make a budget and a plan to track spending

The most important thing for anyone with limited funds is to prepare a budget. And the best way to stick to it is to track spending.

If your child uses Online Banking, they can easily see where the money goes every week. Alerts for larger withdrawals (or deposits) help prompt good spending behavior. Recommend they set a limit for casual-expense money. Hitting an ATM or tapping that debit card is easy – and guaranteed to drain their account.

Be sure to warn them about ATM fees. They need to use their financial institution's ATMs or they will get dinged every time. One advantage of being a credit union member is that they can use THE EXCHANGE® network of thousands of ATMs across the country ding-free. 

Computerize communications

Make their laptop a communications hub. Instead of running up phone and data plan bills, use a computer-based phone system such as Zoom, MS Teams, Google Meet, or other tools to connect – complete with audio and video – virtually anywhere for free.

Smartphones are standard these days, but if they don't already pay for their bill, it may make sense for them to pay for a few months. This will give them a sense of what those few extra downloads or turning off wifi might be costing them.

There are a number of student data plans, but they're all different, so be sure to find the one that matches how your child uses their phone.

Shop cheap and get student discounts

It's amazing what's out there for students. Take advantage of the perks and if a discount isn't posted, just ask. Get them familiar with re-seller sites like Craigslist, Kijiji, and Facebook Marketplace or cruise second-hand stores to find household items on the cheap.

Buy used textbooks. Many schools have buyback programs that connect buyers and sellers. Textbooks go fast, so one trick is to get in touch with students a year ahead and arrange to buy their texts at the end of term. Most post-secondary institutions also issue transit passes, so there's less need to hand over the car keys.

Share costs with other students

One of the best financial strategies is having roommates to help keep housing costs down. Sharing items such as rent, food, furniture, utilities, and more is a great way to economize. If friends have a car and prefer the flexibility it gives, great – car pool and share expenses.

Skip the takeout

Even if they’re on a school meal plan, they can give their health and wallet a break by skipping overpriced convenience foods. Learning how to cook healthy food not only saves money, but also prevents the problems that go with a steady diet of high-fat, high-starch meals. Homemade curries, stir-fries, salads, and soups will help give them the power to resist ordering a pizza.

Get a part-time job

A familiar refrain. Many universities and colleges have work-study programs and employment centres designed to help out students.

Summer work is a necessity for many, but don't overlook co-op programs or internships – they're a good way to network and get a taste of what may become a career choice. If only minimum wage jobs are available, look for one with opportunities for tips, such as waiting tables, parking cars, or food delivery.

Before heading out to school, encourage your soon-to-be student to meet with a BlueShore Financial advisor. Financial advice can help at every life stage.