This article was originally featured on the RBC Discover Blog Series and has been adapted for the Arrive Hub.
Student life is busy. That’s why before the school year begins, it’s worth investing time in financial planning for the year and making sure you’ve covered the basics. We know budgeting can be time-consuming and not exactly the most fun activity, but it’s an exercise that can make all the difference once school starts.
Use Arrive’s monthly expenses calculator to simplify your budgeting process and get started on the right foot.
To avoid running around last minute trying to set things up, make sure your needs are covered before the school year begins.
Here are four tips to help you plan:
1. Start by figuring out all potential expenses
Think beyond bigger items like tuition, accommodation, and books and include expenses for little things like morning coffee, public transportation, clothing, and entertainment — such costs can add up fast if you aren’t prepared for it.
2. Outline all sources of income
Include money from your savings, loans/monetary gifts from parents or relatives, income from any jobs, scholarships, or student loans. When estimating future income, it’s a good idea to be conservative and underestimate it.
3. Factor in adjustments, if any
After considering your income and expenses, if you manage to save some money, it’s worthwhile to set up a savings account and keep the difference as reserve funds for emergencies or unforeseen expenses. If you are short on funds, it’s time to evaluate your “needs” versus “wants” and see what cuts you can make. Or you can also look at potential ways to make up the shortfall on the income side — for instance, by taking up a part-time job.
4. Address all your banking needs
- Ensure you’re equipped with a chequing account (for everyday banking). Look at student account options — fixed number of free debit transactions versus unlimited debit transactions for a nominal monthly fee — pick an option that best matches your needs.
- Consider a separate savings account (or a high interest savings account). It’s a great way to separate your savings from your spending money and to save for things you don’t need to pay for right away, while earning interest.
- Get a credit card. If you are over the age of majority in your province, you can apply for a credit card online. They can be very handy for managing unexpected purchases and emergencies and can be very convenient for online purchases. If you aren’t yet old enough, note that many banks offer Virtual Visa Debit as a convenient alternative for using your bank account to make purchases online. Credit card statements are also an excellent tool to track all expenses and map them against your planned budget at the end of each month.
- Go digital. Set up online/mobile banking; it’s an easy way to monitor your accounts, transfer money, and pay your bills.
These tips will help you start the school year with complete control of your finances, helping you to focus on other academic priorities, and thus making the most out of your school experience!