Information for Parents

Inspiring Financial Responsibility

Students & Financial Planning image of parents with their children

Many students leaving high school have not yet acquired the skills required to balance a checkbook. Most have no insight into the basic survival principles involved with earning, spending, saving and investing.
Planning for the cost of postsecondary education is extremely important and should include developing a financial plan. This CANNOT be left to the student’s last year of secondary school or, worse, to the summer months immediately before the start of postsecondary studies.
Well before applying to a program of postsecondary studies, it is crucial to discuss & plan how to pay for it. Tuition fees, books and supplies, as well as transportation and living costs are some of the expenses post-secondary students have. Students must realize that their educational goals require a large investment of both money & time.

Financial Planning for Post-Secondary Studies

We all know that education is a key factor in shaping your child’s future. Despite this knowledge, investing for college/university may be the furthest thing from the minds of even the most well-intentioned parents. When children are young, there are so many other expenses to take care of. It is hard to make it a priority to plan for something that seems so far away.

Time will fly by!

With the rising cost of education, it is imperative to your child’s long term educational success to start planning early. You CANNOT wait until university or college is starting or is just around the corner to begin thinking about how you are going to pay for it.

The primary responsibility for meeting the cost of postsecondary education rests with the student & family. The best way to save for your child’s postsecondary education is to start early. Enrol in a RESP (Registered Education Savings Plan) as early in your child’s life as possible. There are currently government grants that can increase the value of your RESP contribution and the money invested in RESPs will earn compound interest...tax free...until the student withdraws funds from the plan. When the student withdraws their RESP funds, they will most likely be in a low tax bracket where the interest earned has very little (if any) impact on their total tax payable.

In addition to your son/daughter’s own savings and parental/family contributions, it may be necessary to access loan funding from either the government (OSAP) or a private financial institution (bank). It is also important to research a variety of other funding sources such as scholarships, bursaries and work-study opportunities.

Parents Can Help Prepare Students for the Financial Obligations of Attending Postsecondary Studies!

Students should be taught strategies for spending & budgeting money at a very young age. If a student is old enough to receive an allowance, they are old enough to be taught the basic principles of spending or borrowing and the value of saving or investing.

Teach young people the difference between ‘wants’ & ‘needs’ and develop strategies to make the right choices to obtain both without relying on credit to get either. Prioritize ‘needs’ so that they come first. (eg. You may want that new CD or outfit at the mall but you need to eat. Food comes first!. Eat sensibly & within budget or below budget to save for that special purchase that can wait.)

Explain how CREDIT really works. Even at a young age, discourage your child from borrowing from friends to pay back later. Believe it or not…this can be the start of the take now/pay later cycle! Reinforce the fact that items purchased using credit will significantly increase in cost…through interest payments. Is the item really worth that much more? Is it absolutely necessary that the purchase be made today or could it be something to save toward? Immediately giving in to every ‘want’ takes away from that special feeling of receiving that sought after gift at ‘gift’ time.

Influence your student’s personal habits & behaviors as much as possible through discussion and by example. Demonstrate good spending behaviors yourself. Avoid pulling out that credit card in front of young eyes who are watching everything you do. Young eyes are taking in all that is around them and can easily be influenced by something that looks so easy…especially when they really ‘want’ for something! Demonstrate to your children how financial planning & responsible investing creates growth.

Assistance for Students with Special Needs

There are OSAP grants and/or bursaries specifically intended to assist students with permanent disabilities. Students with special needs should meet with a coordinator in Student Accessibility Services (MUSC B107) to discuss exceptional needs & determine the extent of assistance required.

Click here for answers to Frequently Asked Questions: for Students with Disabilities.

BEWARE!!! CREDIT CARDS...

Signing up for a credit card is a MAJOR decision. Students must be informed prior to making this decision. Talk to your children and caution them regarding credit cards and the idea of purchasing items or services on credit.

Be sure to explain the cost of paying back with interest and help them to realize that CREDIT CARDS REPRESENT ADDITIONAL DEBT...NOT AN EXTRA INCOME SOURCE.

Improper use of credit will have major consequences and will impact an individual's future financial status.

CREDIT CARDS
PROS	CONS
MAY help to establish a GOOD credit rating.	Can easily establish a BAD credit rating if not used wisely!
Useful in an emergency situation.	High interest payments.
Often required to reserve an item or service (tickets, hotels, etc.) or to make online purchases.	Pay more $ for items if full balance not paid by due date.
	May have hidden fees attached (annual usage fees, insurance premiums, late fees etc.)
	Increased debt load.
	Added worry & responsibility if stolen.
	Promotes the urge to impulse buy, overspend and spend money that you really don't have.
	Too much available credit looks bad on your credit report! (You appear to be CREDIT HUNGRY if you apply for multiple credit cards.)

As you can see from the above chart, there are far more cons than pros when it comes to CREDIT cards.

Once a student makes the decision to apply for a credit card, follow these important tips...

Apply only for ONE nationally recognized card. This is all that is needed. Independent cards offered by many major department stores usually bear much higher interest rates!
Read and understand the cardholder agreement for which you are signing. Understand all obligations and meet all of the responsibilities.
Shop around. Don't jump at the first card you see. Even with major credit cards, there are many different lenders out there! Look for cards offering the lowest interest rates, low or NO annual fees, increased grace period, or other benefits (such as points programs or warranties).
Carefully track all monthly expenditures and payments. Reconcile statements to ensure all charges are legitimate and payments are properly reflected. Report discrepancies immediately.
Minimize or eliminate interest charges by paying bills in full on or before due date.
Avoid impulse buying. If you don't absolutely need the item, DON'T use credit to get it.

Click here to use the Interactive Credit Card Tool available from the Financial Consumer Agency of Canada. Understand your Rights and Responsibilities.

Budget Wisely

Try our Budget Game!

Budget BONANZA!

or interactive Budget Builder.

CanLearn Electronic Budget Planner

Typical Budget Form for students

When developing a financial plan, a student & their parents should...

Research all costs associated with attending & completing postsecondary studies.
List all known resources (savings, investments etc.)
Research & assess all possible assistance options.
Examine personal habits & spending behaviors.
Prepare a realistic budget that can be maintained.