Stephanie Millette, a second year advertising student, has just enough OSAP left to last until the end of the year. As we near the end of the school year, she’s not alone: many student’s bank accounts are dwindling. Students need to know that budgeting is the key to financial success.
That’s what Pamela George, Algonquin’s former financial literacy officer told students who sought her out for financial help. George explained that there is a simple budget for students to live by that should keep them financially safe throughout the school year.
Whatever a student’s monthly income may be, OSAP or part-time job for example, they should only be spending a certain percentage of that on different aspects of their lives.
In general, students should put 30 to 35 per cent of their monthly income towards housing costs, 15 per cent towards transportation, 15 per cent towards debt repayment, and 10 per cent towards savings. That leaves 25 per cent for life, meaning everything else from phone bills to movies.
Other tips George had to offer students is to do their banking with companies who don’t charge monthly fees. As well, credit cards should only be used for emergencies and never make only the minimal monthly payment.
“Here’s a concept: when the money is finished, it’s finished,” George said.
Students should keep track of what they spend their money on every month and they will continuously get better at budgeting themselves.
In Millette’s case, she uses what she receives from OSAP for all of her expenses. First semester she had a part-time job at a McDonald’s but had to quit due to her demanding program.
“I try to stay on budget as much as I can, but I can’t always,” Millette said.