All Posts Tagged With: "finance"
How to justify purchasing a smartphone
Eight apps that can help students save money
Smartphone photo by leyla.a on Flickr.
From the Maclean’s University Rankings. For more university advice, get your copy today!
Let’s face it: university is expensive. Between tuition, textbooks and having a social life, the cost adds up quickly. Luckily, smartphones can cut costs with a range of apps designed to manage money and track expenses. Forget bank tellers. Since the first mobile banking application became available in Canada in early 2010, the number of Canadians using daily mobile banking has climbed to more than 2.5 million, according to a July report by the Toronto-based Solutions Research Group.
Not surprisingly, the number of apps has also exploded. Here, in no particular order, are the top eight for saving money via your smartphone.
1. Mobile banking apps
Cost: Free
Available for: iPhone, iPod Touch, Android, BlackBerry or any Internet-enabled device
Standing in line at the bank is as exciting as a library tour. Luckily, Canada’s “Big Five”—the Royal Bank of Canada, Toronto Dominion Bank, Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce—all offer a full suite of mobile apps for everyday banking transactions such as checking account balances, paying bills, and transferring money. Plus, you can use your bank’s ATM locator to avoid wallet-gouging fees from machines outside your bank’s network.
How much should professors make?
In my opinion, they’re paid well enough already.
Photo by ggbaker on Panoramio
More than 1,000 students at Brandon University have signed a petition asking for their tuition money back because of a faculty strike that caused classes to be cancelled since Oct. 12.
But the Brandon University Student’s Union (BUSU), which has collected the signatures, doesn’t blame the professors—who are striking for the second time in three years—for their three weeks of missed classes. BUSU supports the picketing profs. They agree they’re underpaid.
But are Brandon’s professors really underpaid? More importantly—are professors underpaid in general? It’s a question students and taxpayers should ask—they’re the ones who pay the bills.
UAlberta posts deficit of $4.9 million
For the second year in a row, the university is in the red
For the second year in a row, the University of Alberta board of governors has approved a deficit budget. For 2011-12, the university will be $4.9 million in the red, but that figure is down significantly from last year’s $14.8 million deficit, the Edmonton Journal reported. Provost Carl Amrhein, says the U of A was able to improve its finances because of a combination of staff layoffs, furlough days for faculty, government approved tuition increases, and provincial funding for operating and utility costs for new buildings. When asked if there would be layoffs this year, Amrhein said it was a possibility, but could not say for sure. “There are too many sources of change in big faculty budgets to be able to predict at this point,” he said.
Teach financial literacy in schools
Task force report makes 30 recommendations to improve financial understanding
With debt to income ratios in Canada surpassing that of Americans for the first time in more than a decade, a federal task force is calling for financial literacy to be taught at all education levels. The report, submitted to finance minister Jim Flaherty on Tuesday also recommends the government name a “national leader” to head a national strategy on literacy, and create a “single source” website where Canadians can access basic financial information. In total there were 30 recommendations. The task force was created in 2009 and is chaired by Sun Life Financial CEO Donald Stewart.
Canadian academic profession is a ‘monster’
Universities need to control costs by increasing class sizes and mandating a uniform curriculum, Usher
To mark its 225th anniversary, the University of New Brunswick hosted a discussion on the future of higher education Monday evening. Joining four of the province’s university leaders was Alex Usher, a Toronto based education consultant, who said Canadian universities have created a “monster” with the way professors are compensated.
He said that Canadian university professors are paid more than their public counterparts in the United States and that far too many resources have been diverted from teaching and into research. “Someone at some point is going to have to break that cycle,” he said.
To cope with an aging population, fewer domestic students, and shrinking government grants, Usher offered three suggestions. Universities need to train students who contribute to the economy, control costs by increasing class sizes and mandating a uniform curriculum, and diversify their incomes sources by recruiting more international students or setting up satellite campuses overseas.
Universities suffering for pensions
Survey reveals $2.6 billion in solvency deficits
The recession has left Canadian universities with a combined pension deficit of $2.6 billion, according to a Globe and Mail survey of more than 20 institutions. The consequence of the shortfall will likely be reduced services for students, the paper reported. For example, Dalhousie University is facing a solvency deficit of $129 million that will have to be filled by taking funds from the operating budget. Nova Scotia denied the university’s request to exempt it from solvency regulations, instead giving the school 10 years, as opposed to the usual five, to restore funds to the pension plan. Similar situations exist at universities right across the country, with pension plan solvency deficits ranging from a high of $1.1 billion at the University of Toronto to a low of $9.2 million at Trent University.
‘Bloody’ budget for UCalgary
University is aggressively attacking budget deficit despite no extra provincial funding
University of Calgary faculty and staff are bracing for what will be a “bloody” budget next year, according to one professor. In fall 2009, the university projected a $47.5 million deficit for 2013-14, a staggering figure that U of C administrators have already cut by more than half.
An administrative review, itself costing $30 million, helped the university find $10 million in savings, largely by eliminating 140 jobs ($8 million) and finding efficiencies with suppliers, utilities and administrative costs ($2 million). An additional $4 million is expected to be generated this year, growing to $12 million by 2012-13, through a new student ancillary fee. With an endowment fund that has recovered from a recessionary slump, projected shortcomings have been reduced to a $21.7 million deficit.
“The deficit we were looking at (for that projection) is not the deficit we’re going to have to deal with,” Jack Gebert, U of C’s vice-president finance told the Calgary Herald. Gebert says he plans to bring forward a fully balanced budget in the spring, despite the fact that the province will not be increasing the university’s operating grant.
The university has been in negotiations with support staff since March, and collective bargaining with faculty will begin in the new year. The university’s aggressive budget balancing has some faculty and staff concerned.
“I think next year’s going to be bloody . . . I think that there’s going to be a lot of pressure to reduce (support) staff. Staff always gets the worst deal because they don’t have the protection that faculty have. I think there will be a lot of very tough decisions. We’re already running skeletal crews,” art history prof David Bershad, said in the Herald.
Generation spend
Today’s youth are set to become bigger consumers than the boomers
“If I want something I want it, no matter what,” says Kezia, one of the protagonists of a new Slice TV series Princess, where Til Debt Do Us Part host Gail Vaz-Oxlade tries to put young, female serial shoppers through personal finance rehab. A makeup artist who normally makes “probably” around $30,000 a year, Kezia would shed up to $355 a month on her hairdo, and eat out “probably” four times a week. “I don’t ever look at my credit card statements,” the pretty (dyed) blond says, gazing dreamingly at the camera. “As soon as they come, I throw them away.”
Twenty-five-year-old Kezia belongs to a new species of consumer whose capacity to spend will surpass that of the boomers sometime in the next decade. Variously referred to as Generation Y or Generation Next, they are loosely defined as the age group going from kids in their early teens to young adults. In the U.S., eight- to 24-year-olds are expected to spend $224 billion of their projected $348 billion annual income, according to Harris Interactive, a market research and consulting firm. Yet the percentage of those who have no savings at all is over 50 per cent. The stats in Canada are equally troubling. For young adults, the proportion between the ages of 25 and 34 who say they are impulsive spenders and can’t save is 30 per cent, a figure very similar to the 31 per cent found among the so-called Generation X (or 35- to 49-year-olds), according to a recent study by the Royal Bank of Canada.
The recession was supposed to teach some important lessons about saving and living frugally, but Generation Y seems poised to fall into similar spending habits that left their parents with crippling debt. Whereas the financial crisis raised the national savings rate in the U.S. from a low of less than two per cent in 2007 to over eight per cent in mid-2009 (it is now at around five per cent), in Canada it edged up from 2.8 per cent on average three years ago to a still very modest 4.4 per cent overall this year. Despite this small effort to repair household balance sheets, four in 10 Canadians say they struggle to put a nickel in the piggy bank, according to RBC. It’s an unsettling trend for those preaching financial good sense.
How then to raise a breed of conscientious spenders and good savers (if not by example)? Part of the answer, say experts, is coming from financial institutions trying to stage a digital catch-up to the marketing industry that has so effectively targeted young spenders. Most savings products, says Dilip Soman at the University of Toronto’s Rotman School of Management, have “supremely boring advertising.” On the other end of the spectrum of the battle for young wallets, however, are marketing firms with a sophisticated arsenal of advertising tools. Their methods range from social networking sites like Facebook and Twitter to guerrilla-style campaigns that use the power of peer pressure to encourage spending. (In one campaign for Neutrogena, for example, 4,000 high school girls were recruited to work as “brand evangelizers,” pitching the product to classmates and friends in exchange for prizes including concert tickets.)
Simple financial behaviours like saving, or making rational decisions about limited resources, must be embedded in a language young people understand—the same language that speaks to them about PlayStations and Coach bags, say experts. A group of U.S. researchers has had good results, for instance, by having young people interact with digital, retirement-age avatars of themselves as they make hypothetical savings decisions. In one case study, the expression on the avatars’ faces would display a smile or an unhappy grimace depending on the positive or negative impact of the savings decisions on the participants’ future financial situation. In all cases, the study says, participants who interacted with their aged avatars showed a greater propensity to forgo the instant pleasure of spending for the delayed pleasure of having and using savings in the future.
Another way to go about this is finding “smart ways of leveraging social networking,” says Alessandro Previtero at the University of Western Ontario’s Richard Ivey School of Business. He says young people might find it easier to set and reach financial targets if they use something like StickK.com, a website designed by a team at Yale that helps people achieve their goals (from losing weight to quitting smoking) by, among other things, getting their friends involved. Much like friends on Facebook, supporters on StickK.com receive regular updates on status changes—in this case, a person’s progress toward the stated goal. If constructive use of peer pressure helps people shed their extra pounds or their pack of cigarettes, it could also help them save, says Previtero.
And whether the lesson comes from social networking or old-fashioned parenting, teaching youngsters how to set financial goals is key, says Patricia Domingo, an investment retirement planner at RBC. She recalls setting up a savings account and a guaranteed investment certificate for a 15-year-old who made $8,000 designing and selling a website. The parents, she said, sat him face to face with the family financial adviser so he’d be forced to think about what he should do with the money.
Other healthy practices, says Greg Holohan, an investment executive at ScotiaMcLeod, include openly discussing family income, utility bills and even investment strategies with the kids; encouraging them to use their allowance or summer job money to pay for some of their needs; and refusing to pay for everything. A good strategy, he says, might also be to tell the young ones that they have to pay for part of their college and university costs, but then reward them afterwards by paying them back and giving them a tidy sum to start with as they enter the job market.
Deborah Beedie, an account executive in Dundas, Ont., thinks she got it right. “Our kids can probably tell you how much we make, what we have in terms of investments and what bills come up when,” she says of sons Michael, 20, and Scott, 14. Whenever Scott gets his weekly allowance of $14 (one dollar per every year since he was born), he has to decide how much to put in one of three jars labelled “savings,” “spending” and “other.” Michael, a junior at Dalhousie University, had tuition, books and rent paid for, but must use summer job money to sustain his social life and contribute to food expenses. Apparently, he now has the grocery store mapped out according to product pricing and won’t even go near the middle of the alley where, he says, the more expensive stuff is on display.
Whether it’s trying to protect your kid from slick online marketing or the corner street dealer, says Beedie, all you can do is “have a value system that you can transmit”—leave the kids autonomy but know what they’re up to, and hope for the best.
Law school: what will it cost?
2010 tuition figures for first-year students
Listed below are the 2010 tuition figures for first-year students, shown from the least expensive to the most. The numbers do not include other compulsory fees, which at some institutions can add well over $1,000 to the bill.
*Two figures are listed for law schools in Quebec and Nova Scotia: the higher figure is charged for students from outside the province.
Student aversion to borrowing
Choice to go debt-free can limit enrollment options and hurt chances of graduation
The Washington-based Institute for Higher Education Policy and Excelencia in Education have released a new report that examines the characteristics of students who are less likely to borrow for post-secondary education.
According to the report, Student Aversion to Borrowing: Who Borrows and Who Doesn’t, students who are adverse to borrowing to finance their education include older, financially independent students who have delayed their enrollment, part-time students, and members of certain ethnic or immigrant groups.
While it might appear advantageous for these students not to borrow and accumulate student loan debt, there is a downside too. In some cases, aversion to borrowing may limit students’ post-secondary enrollment choices and/or negatively impact their chances of successfully completing a program.
The top 3 suggested reasons why students may choose not to borrow for education, even if they have substantial unmet financial need, are as follows:
- Students may attend lower cost institutions or change their attendance pattern so that they face fewer expenses in a given semester and do not need to borrow.
- Students may use other financial resources to pay college expenses and not have to borrow.
- Students from certain racial/ethnic or immigrant groups may have a cultural or familial perspective on debt that encourages them not to borrow.
Market crash crushes university endowments
Schools considering cuts to spending, scholarships
With the value of university endowment funds decreasing across Canada, students at post-secondary institutions may soon experience cuts to scholarships, student aid, and program funding.
Many Canadian universities are already reporting million-dollar losses from endowment funds as stock markets around the world plummet. Endowment funds are created entirely by donor contributions. The capital from these charitable donations is invested and the income is distributed annually, providing long-term and relatively stable funding for universities. Donors allocate funds to the areas they are most interested in financing, such as a university’s general mission or scholarships and bursaries.
Canadian universities currently have an estimated $11 billion in endowment funds. On average, Canadian schools invest over half of their endowment and pension funds in world markets, which have dropped more than 30 per cent in 2008, falling 17 per cent in October alone.
According to a Nov. 13 report in the Globe and Mail, some universities have already taken measures to brace themselves for projected further negative economic impacts. Hiring freezes are in place at several institutions, while others have begun to cut their distributions from endowment funds.
For Queen’s University, an institution that boasts a huge endowment fund, the loss could be more than $100 million. As of March 30, the market value of the school’s pooled fund was $632 million. This has dropped to $507 million as of Oct. 31, according to a report in the Queen’s Journal.
McGill University is facing similar losses from their fund, which had $928 million in endowments and has lost approximately 20 per cent – about $185 million – of its value.
The University of New Brunswick’s $170 million endowment fund has devalued by 20 per cent as of October, according to university president John McLaughlin. The school’s two pension funds have also dropped between 15 and 20 per cent.
At a recent meeting of the University of Ottawa’s board of governors, university treasurer Barbara Miazga said on March 31 the total market value of the school’s endowment fund assets was $139 million. By September this had dropped to $133 million.
These losses come at a difficult time for educational funding. Across the country, government cash and tuition-fee increases have failed to keep up with operating expenses and Canadian universities have already begun to cut costs.
Although dealing with the current economic situation will be a challenge for the universities, university administrators say it is not projected to have serious lasting impacts.
“Over the long term, we expect that at some point the economy is going to turn around and markets are going to recover,” says Miazga. “So that’s not where the risk is. The risk is in the short term.”
The greatest danger in the short term, she says, is that scholarships and bursaries to students could be significantly affected.
- with files from Maclean’s OnCampus, originally published in the The Fulcrum
Student Loans 101
They can be a wise investment. Discover how to get the most out of them.
If you’re a first-year Canadian college or university student, you’re probably not old enough to buy a drink. If you’re under 18, you can’t vote. You can’t get your own credit card. But as early as age 16, you can sign your name to a contract that offers thousands of dollars up front, and, if you read the fine print, promises years’ and even decades’ worth of financial obligations after graduation. It’s called a student loan. Forty per cent of full-time post-secondary students receive government student loans each year. Many don’t understand what they’re getting into—or how, if they’re not careful, they can end up with crippling, life-altering debts.
See also: Student Finance 101
Here’s the big picture: according to the most recent data, 350,000 students borrowed an average of $5,631 in federal loans during the 2005-2006 academic year, a jump of 17 per cent from the year before. The average newly minted bachelor’s degree-holder graduates with over $20,000 in government student loan debt, which will take her 9½ years to pay off.
For many students, attending college or university wouldn’t be possible without student loans. The Canada Student Loan Program (CSLP) offers funding to students whose expenses exceed their resources. In most provinces, when you apply for a CSLP loan, you’ll also automatically be applying for a provincial loan. There are limits on how much you can receive and under what conditions—and the system is designed to supplement your own finances, not cover the entire cost of your education.
The maximum annual amount you can receive varies by province, institution and program; the lifetime maximum limits student loan funding to 340 weeks of study up to $50,000 unless you are a doctoral student or have a permanent disability. In most cases, you will be eligible for a maximum of 60 per cent of what is called your “assessed need” from the Canada Student Loan Program; you may also be eligible for additional funds in provincial loans. To determine your assessed need the CSLP calculates the cost of your tuition, books, housing, food, and other expenses and then subtracts your resources, including savings, assets, part-time work income, parental income, and awards. You can estimate your assessed need with the online calculator at canlearn.ca.
If you’re expecting a loan, have a backup plan. Many students get a nasty surprise when they discover that they won’t be receiving as much funding as they’d hoped for. This can happen for a variety of reasons. For instance, whether or not your parents are helping to support you, parental income matters when applying during the first four years of study. Some students get caught in the middle-class gap: their parents don’t earn enough to help pay for school, but they do earn enough to reduce the size of CSLP loan.
Depending on your financial situation, you may want to consider other forms of debt. Many students get both government loans and a student line of credit from a bank. Lines of credit (LOC) are more flexible than student loans since you can borrow only what you need, when you need it. If your parents co-sign the LOC (which they will likely be required to do), the interest rate on an LOC may be lower than on your student loan.
How can I save money on textbooks?
Joey Coleman takes his textbook list on a hunt for the cheapest prices
You can tell it’s almost September because of the back-to-school sale signs that are beginning to pop-up. And while the sales may mean cheap pencils to some people, for university students, they mean getting gouged with high textbook prices.
Joey Coleman takes his textbook list on a hunt for the cheapest prices
You can tell it’s almost September because of the back-to-school sale signs that are beginning to pop-up. And while the sales may mean cheap pencils to some people, for university students, they mean getting gouged with high textbook prices.
Textbooks can easily add a thousand dollars or more each year to the price of getting an education. But now with the internet, students have all sorts of ways to hunt down cheaper prices than are offered by the university bookstore. And so, I went online with my textbook list to see if I could find myself a bargain.
The first step is finding the ISBN numbers for each book. This can be done easily by putting the title into Google and going to the first major bookstore page that shows up in the results. Usually, the ISBN is listed in the details section. Once you had the ISBN, you can search for your books. The best place to look for used textbooks is the book search engine bookfinder4u.com that searches over 130 different sites.
After searching for a few books, I quickly realized that there were five main sites that were worth looking at.
Abebooks.com was my favourite choice for used books because it lists both used books and international editions. The site offered the best deal for used in the case of five of my textbooks, before shipping and handling. Shipping costs vary using this site as many of the books listed are not held by Abebooks.com but are listings similar to eBay. And also like eBay, buy beware: some sellers increase their returns by charging a handling cost.
Next, I checked Chapters, mostly because of its reputation. For one of my books, Chapters offered a lower price for a new version than what I could find for a used one. However, Chapters’ prices were also at the other extreme: a book that my university sells new for $90.95 was sold by Chapters for $118.95. In the case of another book, Chapters offered a used price of $77.40 compared to the lowest price I could find online of $63.15. Considering that I would have to put my faith in the US-based seller to get the book to me in a timely fashion, I decided that I would rather pay a little extra to Chapters and put my mind at ease.
Next up, Amazon.ca, the Canadian website of one of the world’s largest online booksellers. Although Amazon.ca did not offer competitive prices on used books, they did offer the lowest price by far for new versions of six of my textbooks. The best deal was a book that my university sells for $63.95 that Amazon charged $39.03 with free shipping. Two textbooks that my university sells for $56.95 were offered by Amazon for $35.88 with free shipping.
Barnes and Noble, a giant American bookstore, offered used textbooks at an alright price. In the case of my history textbooks, they offered the lowest new prices, and in one case, the cost of membership was less than the savings that membership would offer. Their used listing was pretty good as well. Of course, I have learned using eBay to be weary of ordering over the border and the savings in these cases were not enough to entice me.
Alibris offered good prices on the used textbooks they offered; the problem was that their selection was limited. Now, I am taking a lot of advanced courses this year so you may have more luck with this site. All quotes on the site are in Canadian dollars.
The university bookstore was the easiest to find my books since they listed that all for me, and of course, have them in stock. In only one case did the university offer the lowest price on a new textbook. Even then, it was only $7 less than the next lowest competitor. They consistently were the highest or near the highest for costs of used textbooks. In short, they did not provide the value they claim to provide. Considering that they are ordering in bulk, one would think they would be able to offer a better price. They were unable to tell me if they had used books in stock, so my only option for online ordering was to cross my fingers and hope for a break.
Overall, I decided to pay a little extra and ordered about half of my textbooks new from Amazon and Chapters, taking advantage of free shipping due to the size of my orders. I picked up a few used textbooks and overall saved myself about $750 dollars. It remains to be seen how happy I am with the shipping time involved or the quality of the used textbooks I ordered. I have ordered early enough that I should have all my books in time for the start of classes. Of course, I did not factor in the cost of getting something for the mailman since he is going to have to lug all my textbooks to my door.
I could have saved even more money if I went completely with used textbooks, but the price difference in many cases was not enough to convince me to do so. I like to have my own books, with my own notes and writing (okay, and my own doodling) instead of someone else’s. Considering that Amazon and Chapters offered free shipping, in many cases this meant they were offering a lower overall price that a used book dealer. My advice, spend the time to make a chart so you can clearly see the price difference and then make your own decision based on your personal preferences. Keep an open mind, I started my shopping by planning to go with all used textbooks, I was surprised to find some many deals at Amazon and ended up buying most of my textbooks early. Most importantly, order now! There are only five weeks left till classes start again and you do not want it to be October before your books arrive in the mail.
