How to Reduce Your Chances of Having Student Debt RegretOct 20, 2017
With student debt impacting Canadians well into their 30s and beyond, what should today’s students do to avoid finding themselves in the same situation?
Grads under 40 regret their student debt
A recent BDO poll found that two-thirds of Canadians under 40 graduated from college or university with an average of $22,000 in student debt. Sixty-two per cent of them are still trying to reduce most of that debt today.
This financial strain is impacting other major life goals and decisions for this age group:
- 55 per cent are not saving enough for emergencies
- 46 per cent have delayed a home purchase
- 24 per cent have delayed having children
- 16 per cent have delayed working in their chosen field of study
Three-quarters of grads say they regret their student debt. Their biggest regret is they didn’t live more frugally and keep a budget.
What can new students do to avoid student debt regret?
Some future students may have the opportunity to receive free tuition through the Ontario Government, but many will still rely on student loans to cover the costs of university or college.
Grads in their 20s and 30s seems to be advising new students to embrace a minimalist lifestyle. According to our poll, their most popular advice is “be willing to make financial sacrifices while in school.”
Whether you’re considering a university or college education or you’re already a student, there are steps you can take to keep your expenses down, avoid extra debt and reduce your reliance on student loans.
- Review your finances regularly and work from a budget.
- Do what you can to earn extra money. Work part-time in high school. Continue working (if you can) while you attend university or college. You might even consider a gap year between high school and post-secondary to work and save.
- When you’re a student, save, save, save whenever possible. This blog from MrsJanuary.com offers some great ideas on how to do just that.
If you want to reduce the chance that you’ll have student debt regret when you graduate, it’s important to plan ahead. Even small steps today to track spending and avoid debt can have a positive impact on your debt load in your 20s and 30s.
Personal finance blogger Krystal Yee offers some great financial (and life) advice to high school graduates on her website Give Me Back My Five Bucks.