Happy new year! Okay, so maybe it’s not actually the new year – but for students, September is usually an unofficial new beginning. And with this fresh start comes new resolutions, especially when it comes to work ethic, personal finances and goals for the future.
If you’re a student with those goals in sight, it’s important to stick to a plan while in school to make the most out of your money now, before heading out into the working world. Here are three great ways to save and develop solid personal finance management skills, to last you long after you cross the stage at convocation.
Look to rewards programs
Back-to-school can be a very expensive time for students. Supplies, textbooks, maybe a new pair of sneakers… Regardless of if you made that stock-up trip to Costco or Walmart, that first week of class may still give you sticker shock: maybe you bought a new laptop but now require a tablet, or you realized there are several optional texts for your English literature class that would really give you an edge. These last-minute items can add up so it’s important to plan for them as well.
But there are ways to stretch your back-to-school budget, starting with taking advantage of rewards programs. If you or a family member carry a rewards credit card, check if you can redeem points for the items you need, or for gift cards that can be used throughout the school year.
Credit card perks can help ease your financial burden, such as RBC’s “payback with points” program where you can use your points for Apple or Best Buy products, or even just make a payment directly toward your balance!
As a student, you could even benefit from the BMO® SPC®‡ CashBack Mastercard®. With no annual fee, the card offers 1% cash-back on all card purchases as well as 10% to 15% savings at anywhere that accepts SPC (and there are tons of retailers that do!). Also, for a limited time, if you sign up now, you can get 4% cash-back in the first four months of cardmembership.
The Tangerine Money-Back credit card is also one of the most flexible cash-back options out there. With the card, you can earn cash-back on everything from restaurants and groceries, to gas and public transportation. You can even earn on entertainment purchases. You can select two out of 10 available cash-back categories, and those two categories will earn you 2% cash-back or “Money-Back Rewards” right away. And if you set up your cash-back to automatically deposited into a Tangerine savings account, you can also select a third category that will give you 2% cash-back. All other purchases earn you 0.50% cash-back.
Don’t have a credit card yet? You’ll likely be offered one once you sign up for a student bank account. But it’s best to do your research beforehand. It may sound like a task, but RATESDOTCA makes finding the perfect credit card for your lifestyle easy. Just a few clicks and you’re on your way to savings and special offers, catered just towards students.
Go for no-fee, high-interest savings accounts
It’s quite simple – the fewer fees you have to pay, the better off your finances will be. That doesn’t mean, however, that you need to store your extra cash under your mattress. There are plenty of no-fee options to choose from when looking for a good bank account. You also want to ensure you put your money to work by signing up for a high-interest savings option. While today’s interest rates generally aren’t very high, any extra earnings are better than letting your savings simply sit in a regular account.
To start, you could sign up for a Tax-Free Savings Account (TFSA). Think of a TFSA as less of a savings account and more as a savings vehicle, that can help you grow your money quickly and allow you to take it out whenever you want, tax-free. However, since it is an investment, you would benefit from keeping your money there for the long term.
Online banks also tend to offer higher-interest savings options since they have lower carrying costs in comparison to the Big Five banks. For example, EQ Bank is currently offering 2.30% interest with their EQ Bank Savings Plus Account and five free Interac e-Transfers a month with no minimum balance or introductory period.
Also look for products that are specifically designed with your lifestyle in mind. If you have a smartphone – and who doesn’t these days? – you’ll likely want easy access to your account, 24/7 on your phone so you don’t have to physically visit a branch. And if you’re constantly splitting the bill with friends when you go out, or if you’re sharing expenses with your roommates, look for free e-Transfers.
It’s also a good idea to visit a financial advisor – either in person or online – who can help you sort through your financial priorities and give you one-on-one service with no obligation.
Lastly, always read the fine print and look into the features before signing up for any product. Remember, what’s good for your friends might not necessarily be the best for you.
Get educated on budgeting
The world of budgeting can often be daunting. So how does one create a budget? The first step is to create a spreadsheet with all your regular expenses for a month, including food, toiletries and other necessities. Don’t forget to account for any activities or evenings-out. Once you’ve added everything up, subtract it from the amount of money you have, and see how much is left. You should be able to divide that leftover amount between debt and savings. Even if it’s a small amount, try to keep up with a regular cycle.
If you’re finding that you spend more than you have – or are making from a part-time job – the next step is to find ways to cut back on certain expenses.
If you already have a credit card, make sure you don’t miss any minimum payments and if possible, always pay off your balance in full. This will help you build a credit history for when you begin to make large purchases, such as a car or a home. Don’t forget to regularly review your progress and make any adjustments necessary to stay on track.
Don’t wait for the official New Year’s Day to set goals and resolutions. If you regularly put money into savings – even if it’s just in small amounts – and maximize your credit card rewards, you may be surprised by how much you have in the bank before the end of first semester!
This post has been updated.