-TD Canada Trust offers freshmen advice on how to lock down an "A" in
money management-
TORONTO, Aug. 13, 2013 /CNW/ - Student debt can quickly escalate in a
number of different ways, like dipping into the semester's food budget
for a Spring Break vacation or withdrawing cash from a credit card to
pay the rent. According to research from TD Canada Trust, 38% of
undergraduate students wished they had stuck to a budget during school,
and 43% said they wished they had curbed spending on discretionary
items like nights out with friends, gadgets and coffee. Quick-fix
approaches to spending can have implications that linger for decades,
so it is essential that freshmen put their best financial foot forward
from day one.
"University is full of tempting opportunities to spend money, which is
why it is so important for students to create a budget and learn when
and how to say 'no' to things they cannot afford," said Raymond Chun, a
senior vice president at TD Canada Trust. "With the average cost of an
undergraduate degree currently estimated at $84,000, it is imperative
that students do their homework on how to manage everyday finances,
stretch their student dollars and avoid excessive debt."
To help post-secondary students make the grade in money management, Chun
provides advice on how to avoid the top three freshmen fiscal missteps:
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1. Earning a failing mark on a credit rating
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It can be challenging to juggle studies, extracurricular activities and
social engagements with keeping track of financial obligations, like
paying bills on time. A missed payment could have a negative impact on
a credit rating, impacting the ability to borrow money to buy a car or
a home in the future.
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"Always pay bills on time and in full and consider setting up automatic
bill payments online for regular expenses," said Chun. "Remember, even
if a cell phone provider gives you an extension on a bill, your credit
rating may still show that it was paid late."
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2. Treating a credit card like a debit card
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Nearly one-third of students (31%) wished they had used their credit
card more responsibly at school. A credit card is a practical tool to
purchase books and school supplies. It can even provide you with the
opportunity to save money by offering additional benefits like no
annual fee, the ability to earn rewards and insurance coverages. Still,
Chun warns students to only use credit cards if they are sure that they
can pay off the balance in full when the monthly statement arrives.
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"Credit cards essentially offer customers an interest-free loan on new
purchases for 21 days, but only if the balance is paid in full by the
payment due date," Chun said. "If payment of the full amount is made
even one day later, the cardholder will be charged interest on those
purchases from the day they were posted to the account."
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Although tempting, making a cash advance from your credit card account
is not always a good idea since it incurs interest from the moment the
transaction is complete.
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3. Spending without a plan
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Studying away from home is full of tempting opportunities and too much
discretionary spending can derail even the best budget intentions. To
get a clear picture of how flexible the budget is, list the money
coming in from scholarships, work, family and student loans. Then,
subtract essential expenses like tuition fees, books and living
expenses. If the balance is negative, rethink unessential expenses or
look for alternative funding options for school.
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"One of the easiest ways to avoid overspending is to organize your
finances," said Chun. "Take advantage of past online statements to
assess current spending habits. That history can help identify
potential saving opportunities and build a realistic budget you can
stick to."
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About the TD Canada Trust Back to School Poll
TD Bank Group commissioned Environics Research Group (www.environics.ca) to conduct an online custom survey of 798 Canadians, aged 18 years and
older who are currently completing post-secondary education or have
completed in the past 3 years. Responses were collected between
January 10 and 25, 2013.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5
million customers. We provide a wide range of products and services
from chequing and savings accounts, to credit cards, mortgages and
business banking, to credit protection and travel medical insurance, as
well as advice on managing everyday finances. TD Canada Trust makes
banking comfortable with award-winning service and convenience through
24/7 mobile, internet, telephone and ATM banking, as well as in over
1,100 branches, with convenient hours to serve customers better. For
more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the
sixth largest bank in North America.
Image with caption: "Hindsight really is 20/20, and a majority of experienced undergrads admit they would have managed their finances differently if they could go back and do it again. This is for you, freshmen: six tips worth writing down before starting school this fall. (CNW Group/TD Canada Trust)". Image available at: http://photos.newswire.ca/images/download/20130813_C5493_PHOTO_EN_29787.jpg
SOURCE: TD Canada Trust
