All Posts Tagged With: "student finances"
What I learned from Princess host Gail Vaz-Oxlade
After years of watching her TV shows Til Debt Do Us Part and Princess, I got the chance to listen in person to Gail Vaz-Oxlade discuss her Money Rules earlier this week on campus. Moneyaftergraduation.com and the University of Alberta’s Student Financial Aide Office hosted the free event. After an hour and a half, I felt less afraid of the sometimes ruthless world of money. I’d like to share five rules that stood out for me.
Rule 1: “Don’t pay the bullsh*t.”
By “bullsh*t,” Vaz-Oxlade means your monthly minimum credit card payments. Every credit card owner should pay more than the minimum. Those seemingly low payments required each month are meant to keep you in credit card debt for as long as possible, so you pay more interest overall. Oh, and the same go for student loans. “Aggressively pay down your debt”, says Vaz-Oxlade. She says students in debt should only worry about savings after they’ve paid off their loans.
Rule 2: Take on no more than one year of your future net income in student debt.
Vaz-Oxlade says this is a well-known rule of thumb, but I’d never heard it. Apparently every student should try to graduate with less student debt than their projected net income in their desired job. So if your career starts out paying $30,000-a-year after taxes, you shouldn’t have more student debt than that. (Law students, for example, can borrow more because they will make more.) Otherwise it eats up too much of your income, “and you won’t have a life for a very long time.”
Why Canadian students graduate with more debt, not less
Canadians are graduating with more debt than their American counterparts—despite the well-known higher sticker prices south of the border.
In the U.S., average debt at graduation rose to $25,250 in 2010, according to a Nov. 3 report by the Project on Student Debt. Here in Canada, students were graduating with an average debt of $26,680 according to a 2009 report released by the Millennium Scholarship Foundation. If anything, the Canadian average is higher now.
The numbers seem almost impossible: isn’t tuition ridiculously high in the U.S.?
The crazy things students do when they run out of cash—and how to avoid budget crisis yourself
So it’s January and you just got your bank account topped off with this semester’s student loan. You’ve been told to draw up a budget and stick to it, but budgets are for poor people and with all that new loan money, you’re rich, right? So it’s time to go shopping!
Blowing your budget and then ending the semester broke and hungry is almost a rite of passage for university students. There are so many temptations out there, particularly at the beginning of a semester, when everyone is going out and partying and many people aren’t seriously hitting the books yet.
Maybe you have someone who will bail you out if you spend all of your money, but on the other hand, maybe that someone will surprise you to teach you a lesson. The lesson is this: being so broke that you can’t afford food is no fun; it’s easier to plan a budget and stick to it from the beginning.
Get a load of this confession:
“When I was in my first year of college, I’m not sure that I realized what debt was, or that all this seemingly free money pouring into my account could actually run out. Student loans were a given, and in my mind, they were a right. So when that fat cheque came in the mail in September, it was shopping time. The day it arrived, a friend and I went to Metrotown and splurged on new clothes, jewelry and — of course — a big bottle of gin. In that first semester I felt richer than I had ever been because I had so much scholarship- and loan-money in my account. My spending habits reflected that feeling: I went out whenever I felt like it, ate at restaurants, and bought whatever I desired. I didn’t realize that the money had to pay for tuition next semester and feed me until April.
“I ran out of money in the end of February. I actually didn’t see it coming because my feeling of wealth was so complete that I didn’t pay attention to my account balance. I was simply shopping one day and my debit card was rejected: insufficient funds. I panicked. How was I going to eat and pay my rent for two more months?! But I figured that someone else would bail me out. I was still a kid, right? I called my mom, and she – wisely, I now realize – gave me $50 and told me to figure it out myself.
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