Student Debt is Still No Joke

Money management has never been my forte, and this has been evident throughout my life. Growing up in an area outside Toronto, I was  possessed of that “small city” mentality. My parents weren’t the typical “tiger parents” you normally hear about; they didn’t push me to become a doctor, a lawyer, or an accountant – honestly, they just wanted me to do the best at whatever I set out to do. Perhaps it was this attitude that made me want to work harder. Perhaps it was me trying to prove something to myself. We weren’t very well-off when it came to finances and it was a daily struggle to make ends meet, but my parents never let it bother them; they shouldered the burden and all they asked of me in return was that I please just study hard and study well.

Once I enrolled at university, I realized I would have to take on student debt and work hard to stave off taking on any additional debt. I got a job at a local restaurant and worked there for the remainder of university career. It wasn’t the best job, and my performance at school suffered because of it. During my tenure there, I learned a great deal about time management and they were hard lessons to learn. I would work every hour I wasn’t sleeping or in class. All this because I was the first of my family to attend university and I was taking on government debt to pay for part of my schooling. Now obviously, had my parents had the foresight to open a Registered Education Savings Plan (RESP) or put any money away, it would have helped me a great deal with my student debt issue. It wasn’t just the money that was being lost though, but also the time to study and really master the discipline I was learning.

I’m of the mindset that university doesn’t just teach you “book knowledge”; it also helps you develop your work ethic and your general attitude towards work. Now, this isn’t to say you only learn these things in school; I had to learn them the hard way. it was the time management factor in my not-as-uncommon-as-you-think situation that taught me those values. It was a hard time, but I never lost sight of my end goal of securing a job after graduation, making a lot of money and “saving” my family from poverty.

Fast forward five years and I’m now a proud graduate with a degree and a postgraduate certificate  to my name. I secured a job at a large company after a couple of unpaid internships around the city. I moved up to Toronto and was swept up in “big city” life. My parents refused to talk about money and trusted me implicitly (this would come into play later as I was also renting at the time). My first pay cheques came rolling in quickly, but my student debt held me back from being able to save up for anything big – like a condo. I had a lot of trouble getting out of the mire of student debt it seemed that half of every pay cheque (which wasn’t much to begin with), was being used to pay down these loans. I did the math, and it would have taken me over three years to pay back the loans in full at the current rate I was paying them.

Now I don’t blame my parents for not talking to me about finances early and often; it wasn’t their fault. A lot of parents, I find, have difficulty talking about money with their children. The general idea is that they want to shield their kids from the stress of having to count every dime that’s coming in and out of their account. But you should. The concept of money is becoming more and more vague in the minds of millennials. Everything moves so fast this day and age, and everything is digital. Money, as far as they’re concerned, is a number on a screen and isn’t really tied to anything substantial or tactile. This blog article in Target Marketing Magazine explains this further.

The bottom line was that, although I was a success story in terms of getting out of a poverty-stricken family to earn a good  job in the big city, I lived on a legacy of student debt. Student debt is no joke. With The Globe and Mail predicting the cost of education increasing to over $120,000 by 2033, the prospect of getting a loan for that amount is terrifying. As someone who’s still paying back his student loans, I can attest to the fact that it doesn’t get any easier; there’s no break from the debt collectors.

When it comes to finances and your children, planning early and having real conversations about the value of money can and will pay off in the long-run.

Cost of Education & RESP Calculator

Check out this great RESP calculator that helps you evaluate estimated tuition costs in Canada for a post-secondary education. The RESP calculator will also suggest how much you need to set aside each month or year to reach your goal, and how much you will be saving by contributing to an RESP instead of borrowing.

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