By Shaye-Love Salcedo
Many students at Toronto Metropolitan University (TMU) grapple with the financial strain that tuition fees, textbooks and rent bring. With lighter pockets and the need to stretch every dollar, budgeting has become a survival skill for some.
Despite having access to Student Financial Assistance at TMU, full-time tuition fees for Canadian undergraduate students rose three per cent in 2023, posing significant challenges for students striving to maintain financial stability.
Budgeting may seem daunting, but the right strategies can empower students to take control of their finances.
Here is The Eyeopener’s guide to budgeting for university students.
Eliminate overspending on courses
One of the first steps to budgeting is eliminating overspending on unnecessary school expenses. According to financial advice by the Government of Canada, knowing where your money is going is key to setting a successful budget. Part of what this means for university students is maintaining a balanced course load.
Coleen Clark, a professor emerita at TMU, advises on the consequences of dropping courses on time to save money on tuition fees.
“Students would drop a course at the drop of a hat every semester,” said Clark. “So now you’ve got another whole year, first of all, of tuition, and secondly, of lost income.”
According to TMU’s 2024-2025 undergraduate calendar, students who drop a course before Sept. 13 are eligible to receive a 100 per cent refund. However, only a 50 per cent refund will be possible between Sept. 14 and Oct. 4 .
Missing these deadlines forces students to waste money on courses they are no longer taking.
“Students would drop a course at the drop of a hat every semester”
Clark adds that if students drop one course each semester for all eight semesters, it could cost up to $5,000 in added fees.
Matthew Ritchie, a first-year computer science masters student, agrees.
“You don’t want to be stuck in university for 10 years as an undergraduate,” he said, having dropped courses during his undergraduate studies.
TMU considers full-time students to be enrolled in at least 4.0 billing units each term. With every program recommended from 5.00 to 7.00 billing units each term, diverting from this recommended course load could result in higher than expected tuition payments.
“Stick to [your recommended course curriculum] as closely as you humanly can,” said Ritchie.
According to the TMU tuition and fees webpage, annual tuition can range from $7,236 to $40,485, giving students little to no wiggle room when it comes to overpaying for courses and other wasted academic expenses.
Set some cash aside
Cash is still king with Ritchie’s simple yet effective money exercise to limit student expenses.
The masters student suggests withdrawing your weekly budget in cash at the start of each week after you get paid. “Take it out in cash, leave the debit and credit cards at home and carry cash on you,” he explained.
Watching how much cash leaves the wallet when spending prompts students to track how much is left. It’s a tangible way of checking the bank account daily and building persistence to make the money last for the week, he adds.
During his time as an undergrad student, he often divided his paycheck into ‘mandatory’ and ‘spending’ categories, allocating a specific amount for necessities and the leftover for spending and saving.
However, this cash-heavy strategy works best for smaller daily and weekly budgets. Holding large amounts of cash restricts a person’s ability to earn interest that could be gained by using a long-term savings account, according to Bankrate.
“Take it out in cash, leave the debit and credit cards at home and carry cash on you”
For bigger budgets, it’s best to use an online banking service that aids with keeping track of spending and saving goals, all while earning interest. Banks like CIBC, TD and RBC all offer similar services with their online banking applications.
Future-proofing your budgets
Setting smart salary and tax expectations now, can help you build budgets with the future in mind.
For many students relying on loans, setting realistic salary expectations can inform their financial decisions, says Jason Pereira, a financial planner at Woodgate Financial Inc. This skill is great for setting long-term budgeting goals as income and expenses change after university.
Income tax calculators available through providers like TurboTax and Wealthsimple can help compare students’ potential income with their desired career’s average salary. Pereira looks ahead to the future and advises on the reality of paying off student loans and debt—where taxes are often overlooked—using the income ratio method.
“Plugging [your salary] into an income tax calculator and seeing what you’re actually going to keep…[will] help you start to frame your mindset on what the future looks like,” he said.
“If your expectations exceed reality, then you will be unhappy,”
Pereira emphasized the urgency for students to be realistic about their lives beyond education. “If your expectations exceed reality, then you will be unhappy,” he said.
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