For students, summer is a time to kick back, relax and enjoy the few months they don’t have to study.
But as the temperature rises so does the spending on social activities, which can eat away at money saved for the upcoming school year. So what can students do to help better balance their saving and spending this summer?
“When you get paid, divide your pay cheque into chunks. Still have fun, but save most of it because when the school year comes around you’ll regret your summer overspending.” —Jaynell Rosario, second year life sciences student, University of Waterloo
TD Canada Trust spokesperson Michelle Snow, Group Product Manager for Everyday Banking, says the biggest financial mistake she sees students make is a complete lack of planning.
“A lot of times it’s just a complete lack of money-management altogether,” she says. “They just live life as it goes by and don’t plan.”
Michelle recommends three steps students should follow when managing their money this summer:
Students should plan for their expected expenses (school, living costs and social life) and revenues (summer job, scholarships/bursaries, loans and parents). “Remember to pay yourself first,” says Michelle. “TD has a pre-authorized transfer service (PTS) that automatically moves a pre-set amount from your chequing to savings each time you’re paid.”
It’s important for students to keep track of how much and what they’re spending their money on, especially if you go over budget.
“Remember that life is fluid and full of changes,” says Michelle. “Extra expenses and/or extra revenue streams can pop up. It’s important to take this money into account and determine the best way to allocate it.”
Second-year University of Waterloo life science student Jaynell Rosario works part-time at a doctor’s office during the day and as a soccer referee at night. She says the best way she’s managed her money this summer is immediately separating her pay cheque into savings and spending the minute she’s paid.
“When you get paid, divide your pay cheque into chunks. Still have fun, but save most of it because when the school year comes around you’ll regret your summer overspending,” she says.
Michelle suggests students check out student bank accounts with no monthly fees, or automatic saving programs that allow a fixed amount to be transferred from your chequing account to savings every time a debit transaction or ATM withdrawal is made. She says these can be helpful proactive tools for students to keep on top of managing their money.
Making her summer budget planning a family affair is what second-year Ryerson University early childhood education student Patricia Alba found helpful in keeping on top of her spending.
“I sat down with my parents and laid out how much tuition, books and transportation would cost, plus spending money to hang out with friends,” she says. “It helped to have that discussion with them and get their feedback.”
Patricia advises students to keep an updated spreadsheet with a running total so spending can be easily tracked. There are also free online and mobile tools that allow you to track your spending, such as Spenz and Mint.
“Make a spreadsheet and remember to keep all of your receipts,” she says. “This will definitely keep you organized and on top of your spending.”
Jaynell’s advice to students who are finding it hard to strike a saving-spending balance when out with friends, is to suggest going out to places that are lighter on the wallet.
“Instead of going out to dinner every time, I suggest other things we can do, like going to the waterfront or grabbing a coffee,” she says.
But Patricia may have the most important rule of all: “Don’t spend what you can’t afford.”