3. Create a Written Budget
Start by writing down what your monthly income is from all sources. Whether it’s your average paycheque from your job, an allowance, inheritance, money from investments, etc.-if it’s income, you should include it in your budget.
The next step is to write down your current liquid assets (i.e., the money available to you in your bank account). If you’re not currently earning an income, this may be all you have to work with for your entire post-secondary education (no pressure).
After tallying your current assets and income, start writing down all of the expenses you incur in a month. It can help to start with the big things that are always the same-such as rent money, utilities, cellphone bills, streaming subscriptions, and other expenses that are billed each month.
Then, start recording all of the other things you spend money on each month. Things like gas, food, Ubers, clothes, games-anything and everything.
Finally, once you’ve tallied all your costs, compare that to your income or available money. Does your spending outpace your income? If so, what can you cut that you don’t need as a student?
Or, are you earning more than you’re spending? If so, congrats! Keep an eye on your spending habits to make sure that you keep a positive income-to-spending ratio.
If you’re comfortably earning more than what you spend in school, consider making payments on your student loan while you’re still attending! Although the loan won’t be due for payment until six months after you graduate, and it won’t even start accruing interest until the grace period ends, making payments earlier rather than later can make a major difference!
For example, say you have to take $18,000 in student loans to pay your tuition. However, in your last two years of school, you find a great job that pays relatively well (though not as good as the job you hope to get after you graduate). If you pay off $4,000 of your student loan debt before the loan starts accruing interest, you would only have $14,000 in student loan debt at the end of your education.
If you decide to have a floating interest rate on your Canada Student Loan equal to the prime rate, which is currently 2.45 percent, your monthly payment would be $ (while that rate stays at 2.45 percent) and you would pay $2, in interest on that $18,000 debt. However, if paid down to $14,000 before the interest grace period ends, your monthly payment would be $ and you would pay $1, in total interest-saving you almost $500.
Credit Canada offers Free Financial Guidance and Support
Have questions about student loan repayment in Canada? Get assistance from a Credit Counsellor by reaching out to Credit Canada! Our Counsellors offer judgement-free service and support. Or, get started on the road to freedom from debt with a free Debt Assessment. All of our counselling is free, and our Counsellors are happy to help!
3. Provincial Student Loans
For those who owe a lot in student loans, student loan debt relief . So, they may consider other options, like taking out other loans to help pay off their debt, like a debt consolidation loan. A debt consolidation loan takes multiple forms of debt and combines them into a single loan that you can repay-usually with better interest rates or more favourable terms.
Additionally, you can https://paydayloan4less.com/payday-loans-wy/ split an apartment with another student to further reduce costs. This can help stretch your housing budget even further. Though, it’s important to make sure you room with someone you can get along with.