By Simran Singh
Creating a personal budget can be daunting even if you have a steady income, but the effects of COVID-19 haven’t made financial planning any easier for students.
As certain businesses remain closed, and federal financial aid such as the Canada Emergency Response Benefit (CERB) and the Canada Emergency Student Benefit (CESB) come to an end and change eligibility requirements, many students have lost their primary source of income and are unsure of how to pay for their expenses.
According to Coleen Clark, a retired Ryerson associate professor of personal finance, it’s time to look at our spending and see where it’s beneficial to cut back.
While students are at home for the semester, they have more opportunities to save on smaller items of disposable income, Clark said.
“You don’t have to have quite so many coffees in a day. Although it’s nice to get together with friends over a coffee, that kind of spending [could] add up to a lot.”
Aside from the essential expenses like rent, transportation, tuition and student loans, Clark recommends students reflect on their expenses by recording everything they spend. She said that it’s important for people to sit back and write out every expense down to the last dime. Then, they can make a decision on what expenses are most important to them.
Although many students will be saving a great amount of money from not commuting as much this semester, it’s important to plan out how you can effectively make the best use of the money you’re saving.
To help make the process of financial planning just a little easier, here are a few tips to consider:
Track your spending
It’s one thing to create a budget but another to clearly see how much you’re spending. Seeing how much you’re spending on paper can be helpful to see where you can cut back on.
On a spreadsheet or a notebook, write out your fixed expenses (recurring bills, subscriptions, rent), meaningful savings (money for tuition, a car, etc.), and short-term savings (money you’re saving for a spike in expenses, like those headphones you need to replace).
Everything leftover from the above costs is your spending money! Make an effort to treat yourself once in a while but try to maintain a balance. Reducing the frequency of unnecessary expenses can be all the more rewarding when the time comes to treat yourself with a cup of coffee, takeout or a new sweater.
Start by saving small amounts
Whether you’re working during the pandemic or still on the job hunt, it’s a common habit for people to set aside large amounts of money in their savings account. But rather than transferring a large sum of money once or twice a month, try setting aside small amounts every week. You’d be surprised at how fast five dollars a week can add up. If you’re working, a good trick is to save a percentage of your paycheque. Try starting with a smaller percentage and seeing how well that fits into your budget.
Seek financial assistance geared towards student needs
Although this semester will be held online, Ryerson has confirmed they will not be reducing tuition fees. Pauses on the Ontario Student Assistance Program (OSAP) repayments and interest are also set to resume at the end of September.
As CESB expires at the end of this month, the Government of Canada has proposed to change the eligibility requirements for the Canada Student Loan Program (CSLP) for 2020-2021.
As stated on the Government of Canada’s website, the program will “allow more students to qualify and be eligible for greater amounts including doubling the non-repayable Canada Student Grants for full and part-time students, as well as for students with disabilities and students with dependents, in the coming academic year.”
It is important to note that international students are not eligible for CESB or CSLP, however Ryerson Student Life offers them an emergency bursary as a source of financial assistance.
Have discussions about your finances
Finances are usually one of the forbidden dinner table subjects, and probably won’t come up on Zoom either, but who’s to say you can’t reflect on your finances with others in a positive way?
According to Clark, discussing your finances with the people you trust is a great way to get both new and unique ideas to save your money. In addition, it can help you hold yourself more accountable with your spending habits as well as provide some guidance on bigger financial discussions, such as your OSAP repayments.
“People don’t like to talk about [finances], but they shouldn’t be afraid to,” she said.