A Student’s Guide to Money Management

Written by Chinazom Chidolue

As a student, you have very limited funds which is unfortunate because college is very expensive. From the $300 textbooks, to the expensive housing, and let’s not get started on student loans!



As a student, your primary goal is to gain an education. However, more and more students find themselves walking across the stage on convocation day with a diploma as well as a huge debt. In Canada, the average student debt is just over $25,000 and it doesn’t help that it’s even harder for students to secure jobs after graduating. If you do not effectively manage your finances you will not only risk graduating with debt, but you might find yourself unable to partake in a lot of social activities in university.

Lucky for you here are a few pointers that will help you to effectively manage your money as a student:

1. Create a budget that works

The first step to effectively managing your finances is to build a budget that works for you! By this I mean creating a budget that takes your needs and values into consideration and one that you can actually stick with.

You can create an effective budget by:

  • Finding out what you spend money on: Write down all your bills (including monthly debt payments) and monthly expenses. Since spending can be mindless, it can be hard to figure out where exactly your money goes each month. A good way to figure out what you’re really spending on is by reviewing your monthly bank statements or getting an app like Mint to help you track your spending.
  • Prioritizing needs over wants: After figuring out what you’re spending all your money on, it’s important for you to distinguish between your needs and wants. For example your rent and hydro bills are needs, while your weekly manicures and restaurant visits are wants. Figure out what you can do without and budget accordingly.
  • Automating your savings: To ensure that you’re saving enough money for emergencies, retirement or planned purchases (such as a new laptop), set up automated money transfers from your chequing account to savings account. This way you don’t even have to think about it and you are able to easily meet your savings goals.
  • Tracking your progress (or lack thereof): Each month it is important to see how well you’re doing with your budget. Are you over spending in any of the categories? Are you meeting your savings goals? This is an important exercise as it can give you perspective of your spending habits, allowing you to adjust your habits or your budget accordingly!

2. Live below your means

In order to effectively manage your finances you simply must spend less than you earn – in other words, live below your means. As a student this could mean taking the bus even though you can afford to pay for car insurance, auto payments and gas for your car. This is feasible for a lot of students because most cities offer students discounted rates for public transportation. This could also mean deciding to spend more time in doors rather than going out partying every weekend.

Not living below your means is the surest way to fall into a debt trap.

3. Don’t fall into the debt trap

You know you’re in a debt trap when your monthly income cannot cover your expenses as well as the payments on your debt. This debt could be in the form of credit card, college, auto loan debt etc. Some easy ways for students to fall into debt traps include: not paying off bills on time thereby incurring penalties; paying only the monthly minimum; and overspending. Most students tend to gravitate towards using credit cards to finance their lives, especially because credit cards are heavily marketed towards students.

Unfortunately, what most students don’t realize is that credit card interest rates are generally between 19-22%. This means that if you do not pay off your $1,000 credit card loan at the end of the month, your credit card debt could be up to $1,220 (including any other late charges/ fees). If you’re unable to pay for 4 months this original debt of $1,000 grows to $2,215 – TWICE the original balance!

The easiest way to prevent yourself from falling into the debt-trap is by living within or below your means (that is, not overspending). In addition, it is necessary to do research before getting credit cards (or signing any contract to take on loan/ debt) so that you really understand how it works. As a student, you must learn to treat your credit card with respect.

4. Take on part-time jobs/side-hustles when you can

As a full-time student, earning a part-time income can be a challenge! However, having a side-hustle or an extra source of income will help reduce your debt upon graduation. It will also allow you to save more money and put some extra cash in your pockets so you can enjoy the social activities in college.

As a student, you could consider using your skills and the internet to make some money. Some side-hustle ideas include: selling old clothes/ furniture on eBay, tutoring, driving with Uber/Lyft (if you have a car), or becoming a campus brand ambassador for companies.

Get more money saving tips here




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