Gavin_blog_September

4 Essential Tips for Students and Grads

If university students have one thing in common, it’s their bright-eyed ambition. They long for jobs in large, prestigious corporations, hospitals, law firms, and other high-profile fields. What they don’t talk about or think about enough, however, is how they’re going to pay for the privilege; meaning the thousands of dollars they would have to come up with in order to keep taking classes, and thus keep their dreams alive.

Similar to another recent Heritage blog contributor, Eddie Hong, my parents never bought me an RESP (Registered Education Savings Plan). It wasn’t something on their radar, and frankly it wasn’t a priority in comparison to some of their other expenses. So, off I went to university, packing a sizable student loan courtesy of OSAP (Ontario Student Assistance Program).

Now during the year, I never really saw the effect of this money going in and out of my account; I assumed it to be a normal part of the school process.. Looking back at it now, I feel I could have done much more to stretch out my funds. One particular habit I should have kicked right away was, spending like I had money all the time. Once you get an OSAP loan, you tend to feel invincible — suddenly there are thousands of dollars, seemingly, at your disposal. You’re more likely to go out for food, buy expensive toys, and spend money on things you don’t need. A Starbucks latte every day? Sure, why not?

So over the course of my months and years at university, I kept spending my money — the money I didn’t really have. OSAP had revealed a side of myself I didn’t know existed. It’s frightening, and even so, I really didn’t notice how bad it was until it was too late.

Then graduation happened.

And so did the collection calls — as I was required to pay back everything I owed.  Not all at once, of course, but it was a jarring realization. I was living on a cloud for four years, and all of a sudden it was like I was falling without a parachute. I thought back to how I began my academic career and realized that, had I had a savings plan, or at least some sort of payback plan, then perhaps I wouldn’t be in the hole I was in now.

I learned a few key things during that tumultuous time in my life:

1) Don’t feel like you’re entitled to anything but hard work, and even harder times.

Now don’t take this the wrong way — I’m not a pessimist by any stretch — but my experience in this new economy is that you’ve got to put yourself out there. Let’s not mince words: you need to be willing to do the work to get wherever you want to go. If you want that corner office, you have to be willing to put in the extra hours to get there. Expect it to be tough, and to get your hands dirty, which leads me to the next point:

2) Every job is a stepping stone for a student

Take whatever job you’re able to get (even if it’s cleaning bathrooms). University grads are especially bad at this. We pay so much money to go to school and we’re promised all this opportunity after we graduate. The crushing reality, however, is that this is not always the case; far from it. You may qualify for some higher-paying jobs, but that, in no way, gives you the job. Times are tough and jobs are few, so when you finally do get one, any one, you should make the best of it. Every job I’ve ever had, from waiting tables to riding a desk, has given me some new skills or experience. You’re a sum, or an accumulation — if you will — of all those skills and experiences. The more varied your base of experience, the better equipped you’ll be when your dream job eventually rolls around.

3) Spend only what you have, set a budget, and use money sparingly.

Now this seems like common sense, right? Not for everyone. In the digital world, it’s extremely easy to spend money. There is no tactile feel of it leaving your hands, merely the sight of numbers flying by on a web page. Without any self-imposed controls, you’re apt to spend hundreds (or even thousands) of dollars on goods you haven’t even seen or touched yet.

The worst offender in the category of “things you don’t really need to spend money on” is eating out. As a student, your life revolves around your next meal, and going out for something to eat can be the single biggest cost outside of tuition or books. The value of cooking on your own, or sticking to a meal plan, cannot be overstated.

4) Don’t bring your credit card with you everywhere you go — it’s a temptation you don’t need.

This is one of those “100% surety” rules you must adhere to. A credit card can be a dangerous and tempting thing, even more so if the card is with you all the time. There were days when I’d be walking around and I’d see the newest gadget or technology and want it then and there. Your thoughts immediately turn to: “could I afford this?” which leads you to your wallet, and lo and behold, there’s your credit card, peeking out at you with the “big” (at the time it was big enough for me, anyway) spending limit.

While I recognize these tips aren’t the be-all and end-all for students (both past and present), they certainly would have helped me a great deal. And they’re especially important for parents. As parents, you don’t want to nag your children, but you do want to set them up for success. Knowing what they’re going through in this current age is of paramount importance to being relevant in their lives. University students are largely protective of their privacy, especially from their parents, so making an effort to sit down with your child and share some real, hard truths about post-secondary life will do them a world of good — even if they don’t realize it at that very moment.

Having an RESP could have helped me avoid some of my financial struggles. The savings plan would have not only helped me financially, but it would have also taught me the value of thinking (and planning) ahead. To that end, Heritage offers a great calculator to help you plan a potential RESP.
Check out the Heritage Education Funds RESP Calculator today, and find out what the projected cost of education, and an RESP for your child could look like.