Frosh Finances 101
Anyone who lives on the Halifax Peninsula knows this is Frosh week. It’s hard not to notice the longer grocery store line ups, busy coffee shops and general increase in student traffic. Being the parent of a third year SMU business student, I know firsthand that frosh week also signifies an upcoming dent in my chequing account as well as his. Tuition, books, student fees, supplies, software and spending money adds up quickly. My son and his friends are probably more financially literate than most due to my constant suggestions (nagging) about how to save money. So when I crashed their “pre-loading before we go downtown” get together and asked them what financial tips they would suggest parents give to their first year students, the four seasoned guys were anxious to pass what every student should know.
Tip 1: New Not Better
The average new text book cost between $70 - $150. Like the first day of school parents expect their children to have the new shiny book bag with the new textbooks. Maybe we think this will be a reflection on their future grades. Wrong. Used text books are half the price and for most subjects readily available. Worried about the bookstore selling out? They do restock and you can generally find it online as well. The students suggested waiting a week or two into school before buying a text book. Often the book is not essential or students can share one book between two friends cutting the cost in half. My son is selling his previous year books to help towards the cost of this year books. Smart idea and it’s recycling. Check out the university student sites online. Most have book exchanges and a text book selling page.
Tip 2: Leave the Debit/Credit Card at Home
For many students, this is the first time in their life that they will have complete control of the money in their account. Managing this money matures a student. The students agreed creating a spending limit each week (or even daily) is necessary. When going downtown, they suggested leaving the debit card at home and take a specific amount of cash. Once the money runs out, time to go home. If students take their debit card or credit card, they are more likely to use it and overspend or worse, use the private ATM’s located in the bars which charge extra fees. Poor planning costs. On average these machines charge a service fee of $3.50 and the students’ bank also charges a fee of $1.50. Teach your student that everyone has a spending threshold and it’s important to know yours.
Tip 3: Take Advantage of Student Deals
We are a university town. There are student discounts everywhere you turn. The students say it’s always good to ask “is there a student discount?” and always carry your student ID. Take advantage of discounts on groceries (student Tuesdays), restaurants, transportation, memberships even fitness classes. You never know unless you ask! Join local Facebook groups and ask around for discounted student events and bargains. Saving a dollar here and a dollar there does make a difference in the long run.
Tip 4: Be a Star, Keep Your Bucks
Coffee shops offer free Wi-Fi to entice students to hang out, work on line and spend money! That $5 latte daily in the run of a week, month and a semester can add up to spending as much as $500. And that’s assuming that you only get one! The students agreed that that a better place to get “free” Wi-Fi is the campus library. Know where you spend your money. Track spending with a phone app. The little things like coffees, lunches, late night downtown snacks, cover charges, even cabs home can all up over a semester. Remind students that the money has to last all semester not just one month.
Tip 5: Get a Job
My son and all his friends have part time jobs during the school year. Why is this important? They said not only does this give them extra money but it also deters them from going out every night since they have a commitment to work the next morning. Smart thinking. It also gives them a sense of independence instead of feeling the need to ask parents constantly for money. Parents like it too!