This is pretty big: graduating high school! It's a major accomplishment. Since your first days of kindergarten, one foot in front of the other; finish the year; and on to the next grade. Now, for the first time, you get to decide what your next steps will be. College? University? Both are exciting options, but there is one important question you need to answer.
How are you going to pay for it?
Maybe you've been working part-time since you were old enough to babysit or mow lawns; or your parents have been diligently saving in an RESP since you were born. Scholarships, government or other student loan programs are another option. So much to consider! One thing is for sure, you've got the acceptance letter, and know where you're going, and now you need to plan for how you're going to pay for it.
For many, the first conversation involves turning to parents. While it might seem uncomfortable to initiate the conversation, start by sitting down with your parents or another trusted adult and together, go through these five questions:
Where am I going to live?
Will you be living at home or on campus? If you're planning to live away, make sure you research the true cost for residence or apartments. It's not just rent - don't forget to factor in utilities, internet and food. If you're planning to live at home, there are other costs, like transportation, to consider including parking, car payments or transit.
What is my total cost?
In addition to your accommodations, transit and tuition, there are many other expenses that can be expected for student life. Make a budget that also includes entertainment (and be realistic here - avocado toast, music festivals and all), clothing, books and technology.
How much have I saved and who else can contribute?
This is a biggie and can sometimes be a harder conversation than most anticipate. By now, you may know the status of your RESP. Speak with your bank about how best to access the funds. This is a good time to talk to parents about their ability to contribute to school as well. Go through your budget, line by line, and find out what the cost is for each item and how you're going to cover it. This is the time to communicate clearly and honestly about expectations.
Am I eligible for scholarships, government grants or loans?
All levels of government in Canada offer some kind of financial assistance to post-secondary students, and there are many options to consider. Every year, the federal government hands out approximately 245,000 grants through its Canada Student Grants Program. Government grants are different than government loans, which are based on financial need and often require you to keep up a certain course load and academic average. A scholarship, similar to a grant, is money you don't have to pay back and is based on merit, not need.
Is there a shortfall and how am I going to make it up?
It's not unusual for post-secondary students to have a shortfall in their budget. Education is an investment and can be costly. If you are going to have a shortfall, it's best to be proactive about how you'll manage this. Can you work part time to make up the difference? Are you eligible for a student line of credit? Make sure any debt you take on is done so responsibly, with an understanding of the repayment terms and with a plan to pay it back.
Post-secondary education is one of the very first important decisions that you're making as an adult and the weight can feel heavy. Whether you're paying for your education or you have help from your parents, taking ownership by creating a solid financial plan will put you on the road to success. It will not only help to relieve the stress of the unknown, it will also ensure you start building the financial literacy and know-how to be able to tackle all of the other big decisions that come your way.
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