Saving money: Tips for students
Post-secondary students are typically responsible for their own financial wellbeing, including paying for textbooks and school supplies, renting a place to live, and putting food on their table.
Francisco Muñoz Arguello, Fanshawe Student Union (FSU) Financial Coordinator, said awareness of income and expenditures is paramount to students’ financial success. Here are five tips he recommended for increasing that awareness and saving money as a student.
1. Make a budget
A budget is the first step towards financial responsibility and financial wellbeing. A budget will help you know how much money you have coming in and going out for a given period and allow you to plan for your financial future.
A detailed budget that includes long term financial goals is preferred, but your first budget doesn’t have to be complicated in detail nor in scope.
The first step to creating a simple budget is to make three lists. The first list should contain a breakdown of all sources of income you expect to receive for the budget period. The second should contain a breakdown of all expenditures you expect to pay for the budget period, including a dollar amount you would like to put away as savings. The third list should contain item categories that you would like to have money for during the budget period.
Try to be realistic in the amounts you allot to optional expenses so that you will have as accurate a financial picture as possible. All items on each list should be specific in name and exact in dollar amount.
2. Keep track of your spending
When you make your first budget, it might not pan out perfectly. Keeping track of the money you spend throughout your budgetary period is a necessary part of your financial well-being because it allows you to revisit your budget and adjust as necessary based on your spending trends.
If you find it hard to spend within your budget, it is a good idea to look at bank statements and identify extraneous spending. If there are items where you consistently spend more than you allot, then you can either budget a higher allowance for these items or try to curb spending where appropriate.
3. Be frugal
There are many ways students can lower their costs. Examples include minimizing fast food and restaurant purchases, purchasing groceries when and where students receive a discount, and shopping at second-hand stores for clothing and housewares.
Minimize the amount of money you spend on fast food and restaurants because these food options add up — and they add up quickly.
A purchase from a beverage vending machine or coffee from Tim Horton’s or Starbucks is deceivingly expensive. These purchases can seem less impactful than they are because the amount spent in each instance is relatively small.
Consider investing in an easy-to-clean packable thermos and small snack containers to make bringing items from home more convenient.
Food delivery services like Uber Eats, DoorDash, or SkipTheDishes, although more transparently expensive, can wreak havoc on your finances. Instead of fast-food delivery or dining, consider getting grocery store items you might not normally buy because of their upfront cost.
If you need a convenient meal, money spent on prepared items at the grocery store or even at more expensive locations such as Sunripe, Remark, or the Convent Garden Market, is almost always going to be cheaper than fast-food delivery.
Consider including snacks, drinks, and meals-to-go in your grocery budget rather than allotting large amounts of money for non-grocery store items.
For clothes and housewares, there is a lot of money to be saved if you buy second hand and ‘new to you’ items. Use free services like Kijiji or Facebook Marketplace if you need to make purchases for your home. Also, take time to check some of the many thrift stores in London, including Goodwill, Value Village, and the Salvation Army Store. Your money will go a lot farther if you buy your housewares and clothing from these stores.
4. Avoid payday loans
Businesses like Cash Money and others that offer cash advances should never be used.
The Cash Money website lists in their fine print the following example for Ontario residents who take their payday loan: “the maximum allowable cost of borrowing per $100 borrowed in Ontario is $15. We charge $15 per $100 borrowed. On a $500 loan for 14 days, the cost of borrowing is $75, with a total repayment amount of $575 and an APR of 391.07 per cent.”
Muñoz Arguello advised students to consider a bank loan or student line-of-credit if they need more money. Banks have an average annual percentage rate (APR) of approximately 15 per cent on a person’s principal balance compared to Cash Money’s 26 times higher APR.
If you do get a bank loan or line of credit, do not just make minimum payments because paying only the minimum means, “it will take about 20 something years to pay it off,” according to Muñoz Arguello.
5. Supplement your income
Eligible students can take advantage of services such as The Sharing Shop.
“Domestic and international students can access the Sharing Shop for a $50 gift card three times per semester. Ukrainian and Russian students can access it once per semester for $300,” Muñoz Arguello said.
Visit fsu.ca/the-sharing-shop to access the Intake Form and find out if you are eligible for support.
There are also funding opportunities offered by Fanshawe’s Financial Aid office including needs-based scholarships, awards, and bursaries that can help bolster the income of a student in financial need. International students need to be aware of eligibility requirements for assistance which require the applicant to be a domestic rather than international student.