Deadly sins of freshman finances - common financial mistakes students make
Coming to college may be the first opportunity for many to move away from home. However, students are hit with a multitude of new experiences and challenges; avoiding financial mistakes is one of them. College can be expensive; people use savings, scholarships, bursaries, loans, or even work to pay their way through college. Some students struggle with finances, and if not made a priority, can become forgotten. Take the opportunity to learn from these mistakes, so as to not repeat them.
Ontario's Student Assistance Program (OSAP) can be an amazing benefit to Ontarians and it's always improving legislation to adjust to demographic and economic shifts in our province. OSAP is not free money although many people use it as such. Borrowing too little or nothing at all can cause a person to struggle translating into academic difficulties, but often time's students will borrow more than they need. Students must work to differentiate their needs from their wants and resist the temptation to spend money just because they have it, because in reality they don't; they have debt. Students should plan their money to last the semester. Don't blow student loans on vacations and partying.
However, perhaps if students better understood the nature of repaying their loan they'd be more cautious and frugal. If a person receives the maximum OSAP it takes an average of ten years to repay. The monthly payment is approximately $100 a month for those ten years with an additional $100 added to every month for each year the maximum loan was received. To find out the rate of repayment on your loan check out the debt calculator at osap.gov.on.ca.
Students apply for scholarships as seniors in high school, but don't forget, there are scholarships still available for college students. Qualifications for scholarships require students meet criteria, or to complete a task such as writing a paper about why they deserve the scholarship. Many times even if a student doesn't meet the qualifications, if no one else had applied for the scholarship, that student may still get it. Go to the Financial Aid office and ask about scholarships or check fanshawec. academicworks.com.
Bursaries are free money and they are usually awarded on a first come first serve basis to those eligible. They also cycle out constantly so you'll want to check what's available at bursaries.fanshawec.ca/award_search.aspx. Do so frequently to not miss out on the deadlines for free money.
Part of being a college student is making new friends and wanting to fit in, sometimes that can mean splurging on the amenities and then being left struggling for the necessities. Students don't have to go out every weekend or on every dollar beers night; all things in moderation.
Other issues can arise among students once they begin making a lot of new friends; it's hard to know who to trust. At some point when funds run out from partying they'll usually ask for a loan. Students need to be careful with whom they lend money; there is no better way to get rid of a person than to put them in debt to you. I graciously call these people “$40 friends”. When thinking how to help a friend; consider that by declining to make loans and going on nights out partying you will be modeling good financial choices that could help influence your friend.
In college, students are responsible for managing educational and financial responsibilities. Similar to school work, financial tasks that are not maintained can add up. Not planning properly can cause students to go broke. It is important students set financial goals for themselves, giving them something to work toward. Not having an emergency savings is a common epidemic among students and young adults that can leave people ill-prepared in the case of a crisis.
Students should learn to be mindful of where their money is going. Take the opportunity to apply for scholarships and bursaries. Don't blow your money partying and not budgeting. Know how much you can afford to spend each week and each day. Remember knowledge is power and so is money.