One of the biggest decisions that you'll make when it comes to post-secondary education is whether you'll live at home or away. For some, the choice is limited. For example, if you're from a small town or seeking a specialized program, living away might not be optional and finding a way to make living away work from a financial perspective will be essential. But others might have the choice to commute to school while living with their parents — potentially saving them a significant amount of rent and grocery money on the way.
It was never a question for me: I always planned to go away to school. It represented freedom! I couldn't wait to get out from under the watchful (albeit loving) eyes of my parents. I was so determined, that schools within close driving proximity did not make my list of top choices. No one was more surprised than me, when in frosh week and the first few weeks of classes, I became desperately homesick and phoned my parents repeatedly (daily). I must have placated my anxiety with an abundance of social outings and retail therapy, because by mid-term I was well ensconced in student life, with a dwindling bank account balance and no forseeable income to get me to Christmas break.
A recent RBC poll shows that the split is pretty even between students who live at home (48 per cent) and those who live away (52 per cent). Either way, you should expect to incur new or additional expenses that you didn't have when you were in high school. Now is the time to create a budget and set financial goals that will lead you on the road to healthy money management.
Here are some tips for both living situations:
Living at home:
Talk about household expenses
Talk to your parents about how you can contribute to the household finances. Maybe you can't afford much, but you can pitch in in other ways to make sure you're not taking their hospitality for granted. Ask questions about how much it costs to run the household. This information will be helpful in forecasting future expenses for when you are ready to move out of the house.
Calculate commuting costs
You've likely thought about transit costs. But have you thought about all the other things that come with commuting? If you are driving yourself, have you thought about gas, insurance and/or parking? The morning coffee for the drive? Or how about that extra data for catching up on school work while you're on the train? Factor these smaller costs into your budget to make sure it's realistic.
Save for later
Living at home while in school is an opportunity for you to save for your future. Put money aside on a regular basis so that you have a head start when it's time to move out. Picking up a few shifts at a part-time job can also help you with your savings.
Living away at school:
Prepare for the new routine and location
Look out for well-priced local transportation, grocery stores and other amenities options. If you're living with roommates, decide in advance how costs will be shared so there aren't surprises.
Plan for the unexpected
Students who live away are likely on a tighter budget. Whether it's an unforeseen trip home or a broken laptop, having a plan to pay for contingencies will help. Having a part-time job is another good way of setting money aside for these unanticipated expenses.
Look for creative ways to stretch dollars and offset costs
For example, work with your parents to determine whether they have any rewards points that can be redeemed for practical merchandise like a coffee maker, gift cards for groceries or clothes, and even a train ticket or a gas card for trips back home.
Living expenses can add up to as much or more than your tuition, so making the decision about where to live is not one to be taken lightly. Make sure you understand all of the costs associated with each option and all the factors that impact the cost of borrowing money, should you need to. Talk to your bank about how credit cards and loans work, and ask about an automatic savings plan to help stay on track with your spending.
There are also options out there that may help you access free money during your education, including government grants and scholarships. Whether you are living at home or away, everything helps when it comes to saving money on your education. Resources such as ScholarshipsCanada.com and StudentAwards.com will help you navigate your options.
As I became more familiar with campus life, and my new city and home away from home, I learned to make my money go further by doing things like tapping into student deals, making my meals at home more often and choosing less pricey places to go out with my friends. But the big difference maker for me was getting a part-time job on campus. Not only did it give me a little extra cash to get me to the holidays, it also gave me a great sense of independence and confidence in my abilities. Whether living at home, or away on campus, post-secondary school is an exciting time and the skills you build in money management are lessons you will take with you for life.
Visit www.rbcroyalbank.com/student-solution to learn more.