By Chi Nguyen
Tuition, textbooks, food, transportation, rent, entertainment, beer… All of those first-year expenses can add up.
And then there’s that giant “Eaton Centre” thing mere steps away. Between necessities and impulse purchases, student finances can get a little tricky — especially in downtown Toronto.
Don’t panic: there’s a way to stay in the black. All it takes is some preparation.
“University students are smart young people,” TE Wealth Regional Vice-President Warren Baldwin says. “One has to believe that they can apply the principle of simple arithmetic to budget and make it work for themselves.”
Here’s how to structure your budget — and some tips on how to stick to it in a city as expensive as Toronto.
Start with your lump sum. This is either your monthly income or the amount you have available to you per term or year. From there, divide your funds into four categories: emergency fund, essentials, entertainment and luxuries.
This money is for unforeseen events. Students can make emergency trips home or pay off unexpected expenses with these funds — but the money is to be used with discretion.
“The emergency fund is not there to pay off a shopping spree, but to provide financial security for students,” he said.
Try to put the money you’ve allocated for emergencies somewhere where you won’t be tempted to spend it. For instance, keeping it in a savings account separate from your usual account will give you a more realistic idea of how much money you really have in your other three “working” funds.
“Essentials” include rent, food, school supplies and transportation. While food courts or Dominion might be conveniently located, those meals are overpriced — and sorely lacking in nutritional value. Ask friends and classmates where they get their deals.
“The best option for veggies is the Good Food Box,” says second-year architecture student Jessica Gibson. “You’re supporting the farmers, and a giant box of fresh veggies is $22.” It’s available at Foodshare (200 Eastern Avenue).
Watch for grocery store sales, or look around for a neighbourhood grocer whose prices are more affordable than the large chains. If you have time, hit up Chinatown (Spadina and Dundas) and stock your pantry there.
Even native Torontonians can save a few dollars by straying off the city’s beaten path. A few hours of exploration can help you discover new stores and better prices.
And if you’re on campus often, try to keep track of exactly how much you’re spending on the so-called little things.
“I spent $70 in a matter of days just with small purchases,” says second-year early childhood education student Andrea Foley. “A coffee here, $5 at Dominion there.”
Any student can attest to the fact that textbooks are costly. Try to buy used books, if you can; flyers surface around campus every September, and Toronto is home to a number of used bookstores.
Of course, studying isn’t everything, and Baldwin says it’s perfectly OK to budget for fun.
“Entertainment money can be used to go out for the occasional dinner, the odd drink and party,” he said. “Again, the key is not to overdo it, and to use your discretion.”
Some might encourage students to budget only for necessities, he adds, but all work and no play can lead to excessive stress.
It’s all about balance.
Instead of blowing their money on overpriced drinks at the clubs, some students are toasting the merits of drinking away from establishments.
Some bars often charge well into the double digits for “sophisticated” mixed drinks, so it’s often cheaper to pool some money together and hit the LCBO or the Beer Store (responsibly, of course).
“Pre-drinking is the most fun anyway, and it’s how you really get to meet people,” says second-year journalism student Amber Bellaire. Loud noise at clubs make it hard to have convesations and strike up friendships, she adds.
This fund is for the things you would like to have but don’t need. TV, cable, excessive shopping sprees, a car — and the money for parking said car on campus — all fall into this category.
Commuters can save money by getting to know students in their area and setting up a carpool group. Splitting gas and parking costs can put a serious dent in your expenses. Those extra cruising-down-the-QEW bonding sessions are an added bonus.
Try to limit your shopping to the stuff you really need. Do you really need to upgrade your iPod when your old one works just fine?
Once you’ve established your categories, budgeting is simply a matter of dividing the money and putting dollar signs into a spreadsheet. Although a budget is easy to create and maintain, Baldwin says, it doesn’t do itself. It’s up to the student to follow his or her financial plan.
There’s no shortage of ways to save your pennies. Balance your bank accounts, create and stick to your budget.
And — yes, even though countless stores are just steps away — don’t overshop.