Research all grants, bursaries and scholarships. Look into grants at work—your full or part-time job. Perhaps your parents work for a company that offers grants and bursaries. Google grants and bursaries in Canada and be specific. For example, look into grants specifically for women—if you are a woman.
Have a discussion with your adult children about pre-arranging funeral plans and costs. Decide to name your spouse as power of attorney for finances and your alternate can be your child.
Have a discussion about health care costs in the future and how you will pay for those. Update your will and discuss whether or not you will leave your children the estate in a trust.
Are your children in the highest tax bracket? This makes a difference and you should discuss this. Find out about a spousal trust in individual names—to ensure the inheritance does not impact eligibility to Old Age Security.
Credit Cards & Students. University students will often receive unsolicited and/or pre-approved applications for credit cards. Perhaps financial institutions specifically target students to apply for credit cards? It is a tempting offer for someone on a tight budget who needs the extra cash for books, pub night or a pizza delivery. The cards usually have a low limit of about $1000.00 so it is not a “big deal.”
However, banks are not targeting students to be “nice”. They want to be the one of the few credit cards that you have in your wallet because after you graduate, and start your career, the card limit can be increased. In the meantime, financial institutions rely on students only making small or minimum monthly payments on balances. Not only do students usually only pay minimum payments, they also don’t usually think about the extra interest they are paying on top of the original balance. In other words, financial institutions make more money from minimum payments each month. Be cautious, look at the interest rate and look beyond the advertised low introductory rate.
We live in a “plastic society.” There is nothing wrong with having a credit card for emergencies and for large cash purchases. Just make sure that you stay financially responsible, pay off your monthly balance every month and use credit wisely. Be financially responsible now and you will reap the financial rewards in the future.
Stay Financially Savvy
Credit Cards & Students
Carl Rumanek CPA, CA*CIRP is a trustee in bankruptcy with Rumanek & Company Ltd.
In years gone by a student going to university had a part-time job or at least a full-time job during the summer to help finance his tuition and other costs. If your parents could help, great, if not there were a few scholarships and bursaries that you would try to get. If a student could not afford to go to university, they would apply to a college or trade school where you could earn some money as an apprentice while you studied.
Times change. Now, there is a sense that every person is entitled to a university education regardless of whether they can afford it or not. The Federal and Provincial Government have now set aside hundreds of millions of dollars to assist those students whose ability to pay tuition, even with help from parents, falls short of the actual tuition costs. That is the good part – money is available to those who need it.
However, there are those students who apply for and receive Canada or OSAP (Ontario Student Assistance Plan) funds that are more than they need for tuition. I understand that at age 17-18, there has been little financial training in your life for budgeting and you really want that TV, lap top, Canada Goose jacket or trip to Fort Lauderdale at spring break. And, hey, the loan is interest free and it is several years until you graduate and have to start paying it back. That is the trouble. Over the years at school, you can build up a huge debt so that when you do graduate and find a job, you are saddled with debt payments which will take many years to pay off. And this is the time when you are building a personal relationship with someone and starting a life career.
We do not advocate taking the loans that you do not need. We do ask that you consider the long term effect of taking a loan higher than you actually do need. This is not “play money” like when you were a child. This is real money that will eventually have to be paid back by yourself with interest. Decide wisely what is in your long term best interest.