Student sits on bed and makes a budget on her laptop.

Students Can Create a Budget In Less Than 10 Minutes

By: Neya Abdi | @neyaabdi 

Budgeting is the simplest proactive measure we can take to guarantee our financial security, but we don’t take it as seriously as we should.

A big reason for this is the lack of personal financial education in schools. Many of us simply aren’t taught how to handle our money by our parents. Unfortunately, our parents may not know what they’re doing either – the average Canadian has $21,348 in consumer debt, according to TransUnion. And about 56 percent of Canadians say they have less than $10,000 stored away in an emergency fund. Forty-four percent have less than $5,000 and 21 percent have less than a grand. Financial experts recommend having at least three months of expenses (the ideal is six months) tucked away to touch only in an emergency.

Making a budget doesn’t just allow you to save up for a trip; it allows you to save up for the unexpected as well. So why are a lot of us hesitant to create one?

It’s Not As Complicated As You Think

For people I’ve spoken to, the biggest reason they don’t make a budget is because they simply don’t know where to start. They don’t know whether they should be aggressively paying down their debt, stockpiling money to paying off their student loans, or living on only bread and water. So they abandon the process before they’ve even started. If you’re just starting out, here are two key pieces of advice:

  1. Don’t be extreme.
  2. Just get started.

Your budget is a flexible tool that you can adjust periodically to meet your financial changes. Create a budget that gives you room to buy the things you like and do what you enjoy. Your budget shouldn’t be a financial straitjacket. Prioritize so that you are giving up things you care less about in order to spend on the things that you enjoy.

On that note, just get started! Your first budget will not be perfect, and it will likely be a reflection of how idealistic and ambitious you are about saving money. Following a budget takes practice, so just start off simple.

Implement the 50/30/20 Rule to Quickly Make Your Budget

Uncertain about:

  • What to start saving for?
  • Whether you should tackle your debt first?
  • How much you should put towards discretionary expenses or “fun money”?

Start off with the 50/30/20 rule. It’s the budgeting rule of thumb. Only 50 percent of your income should be spent on needs (this includes rent, hydro, metropass), 30 percent on your wants, and 20 percent should go towards savings and debt repayment.

If you do not have to worry about rent because you live at home, then throw a couple of fixed “wants” in there like your phone bill. If you have the extra money, maybe start contributing a couple hundred dollars a month to your parents just to get into the habit of paying “rent”. But try not to consider your fortunate situation a free for all to allocate 80% towards wants instead of just 30%. You can even put some of that leftover money towards your savings.

It’s as simple as striking two lines across your paper and making three categories: Wants, Needs, Future. And then fill in the sectons accordingly. It’s a quick and simple process.

If you are spending too much on your needs, moving may not be an immediate option, so see where else you can shift your budget. The 50/30/20 rule serves as a no-brainer starting point that you can organically adjust to fit your personal situation.

Should I Pay Down My Debt or Build Up An Emergency Savings?

This depends on your current situation.

If you can only depend on yourself in case of an emergency (you can’t pay rent one month, you need a repair) work on building your emergency fund up first and once you have about three months, start chipping away at your debt.

If your basic needs are met and you don’t have to worry about your food or shelter, prioritize paying off your credit card debt. Interest rates on credit cards are very high and whatever interest you earn in a savings account will never outpace the money you lose paying interest on your credit card. Beat that down as soon as you can, and allocate a smaller portion towards savings.

Whichever option you choose make sure you ALWAYS MAKE YOUR CREDIT CARD MINIMUM PAYMENTS ON TIME!!! You can live with carrying a balance, but missing your minimum payments can very negatively impact your credit score.

Respect the Effort It Took To Make Your Money – You Earned It!

Setting aside a specific amount of money for eating out or shopping quickly teaches you the value of a dollar. You’ll quickly learn the price of that pre-made salad you casually buy and wonder whether it’s worth it when you can put a bit towards that dress you wanted to buy. And you’ll become much more aware of the hard work that went into earning that cash and be less willing to give it away.

To keep up with the latest articles about budgeting and personal finance, like our Facebook page or follow @todiscursive on Twitter & Instagram

Networking in the City: It’s About Who You Are, Not Who You Know

Every post-secondary program is served with a side of advice to network aggressively.

“It’s about who you know, not what you know,” we’re told, “so you’d better start marathon shaking hands”.

Well, not so fast. Sure, people with an extensive network boast a unique advantage when it comes to landing jobs. They can save time by sending resumes to people they know will look at them. But for the most part, if a hiring manager or executive doesn’t believe you’ll vibe with their company, chances are you’re not getting the job.

Don’t believe me? Consider this: according to 67 percent of consultants surveyed by Workopolis, the top reason people don’t get the jobs they want is because they fail to set themselves apart from the competition. 

Let that sink in for a moment. The top reason isn’t lack of experience or a company insider’s referral: it’s a compatibility problem.

The Importance of Values in the Startup Scene

But what exactly does this mean? Differentiating yourself isn’t about standing out by any means necessary. If this were the case, we’d all be showing up to interviews drunk, toting a karaoke machine with every intention of using it in the name of making an impression. Clearly, companies are looking for something specific. And that something specific is:

Whether your values are aligned with theirs.

Nowhere is the urgency about values stronger than in the startup scene, particularly in Toronto’s flourishing tech ecosystem. Ninety percent of startups are expected to fail. With a fun statistic like that, startup founders are more interested in working towards their vision than convincing new recruits that their vision is great. Teaching you company policy takes the work of a week. Teaching you to share a company’s convictions, while not impossible, can take forever and even after that investment there’s no guarantee you’ll care. Consequently, who you are and what you value is very important to companies.

Companies Are On the Lookout for People Who “Get It”

The recent TechToronto Meetup powerfully drove this point home. The beauty of this monthly meetup hosted by TechToronto is the mini-presentations given by members of the tech community – just enough variety to leave you satisfied, but short enough to keep you engaged. The most recent event was a veritable smorgasbord of speakers ranging from a marketing manager in a biotech company to the married co-founders of a beauty review site to the hilariously straight-talking, potty mouthed CEO of a healthcare tech startup. While on the surface they could not be more different, what they all shared in common was a strong belief in the importance of people with shared values for the success of an organization. In each presentation, the speakers emphasized the importance of company culture and building solid teams.

Of course, a shared passion for eating is not going to overcome the fact that you don’t know how to code if you are applying for a developer position at a food delivery startup. On the other hand, if you have the necessary hard skills and demonstrate a commitment to creativity, user experience, and healthy eating, it’s clear to the person doing the hiring that you get what the organization is trying to accomplish.

At the end of the day, everyone’s just looking for people who “get it”. It’s why couples with seemingly opposite interests can work so well: they likely share core values about communication and personal growth. And it’s why an organization with teammates who fill different roles – technical, public relations, sales – can come together to make something greater than the sum of its parts.

The TechToronto Meetup and afterparty takes place every month for those looking for a job, those looking to hire, and those who just love learning about tech. The next event takes place December 5. Early bird tickets are $12, regular tickets are $20, and you can buy them at the door for $25.

To keep up with the latest articles on networking and student life, like our Facebook page or follow @todiscursive on Twitter & Instagram

Featured image via Pexels

Why Students Should Eat The Same Lunch Every Day

By: Neya Abdi | @neyaabdi

Everyone loves lunch. It’s a teasing taste of the freedom that’s gonna come at the end of our shift or after a long day of lectures. But there’s something to be said for deciding to eat the same thing for lunch…every day.

It Makes Packing Lunches and Eating Healthier Easier

Once you’ve created a meal – with all the food groups! – that you like and enjoy eating regularly, packing lunches and eating healthy becomes easier. You gain an increased awareness of the foods you’re consuming since you’re throwing the bare ingredients together yourself. By knowing exactly what to grab from the grocery store each week and developing a quick and easy method for preparing your food either the night before or the morning of, the process will become as automatic as brushing your teeth or hopping into the shower. (Assuming you do those things…hopefully.)

Working Over Lunch Becomes Much More Efficient

If you have a go go go mentality and like to get readings done during your lunch, you will appreciate this reason. First of all, keeping yourself fed and energized is an important part of being productive, so skipping lunch to squeeze in an extra hour of studying is not a sustainable strategy. The most productive students know this and respect their body’s needs. That being said, you can still make your lunch hour as streamlined as possible by cutting down on the amount of time you spend thinking about what you’re going to eat.

Alexa von Tobel, founder and CEO of LearnVest, told Lifehacker that she eats the same thing for lunch every single day (and breakfast too for that matter!)

I try to automate all tasks that truly do not require energy. For instance, I basically eat the same breakfast and lunch every day (dinner is my fun meal). Why waste time on figuring out what I want to pick up for lunch? I know what I like, and I stick to it.

The 32 year old multimillionaire is a Harvard grad, entrepreneur, CEO, and New York Times Bestselling Author – you’d better believe she knows something about using your time wisely.

You Can Spend Less Time Thinking About What To Eat and Enjoy Your Lunch Break Instead

Remember when someone took that intense scene from The Notebook (where Noah repeatedly asks Allie, “What do you want?”) and captioned it, “Every time I ask my girl what she wants to eat…“? Whoever made that video was speaking the truth – for both girls and boys. Figuring out what you want to eat can take forever, especially when you are presented with a lot of options. And by the time you’re done making your selection (likely one of two meals you always get) and have made your way through the long line you’re only left with a little time to scarf down your food before getting back to your classes feeling like you only had a ten minute break. Spend less time staring at lunch specials and more time doing what you want with your break.

You Will Save A Lot of Money Eating The Same Thing Every Day

If you care nothing about productivity or even healthy eating, perhaps a plea from your wallet will have you seeing things differently. Instead of running to the cafeteria or going out for lunch in between classes, you can satisfy your hunger with the easy meal you put together. We spend A LOT of money eating out. A 2012 study by Visa found that Canadians who buy their lunch three times a week at an average cost of $8.80 per meal spend $1,500 a year.

That’s tuition for two classes, a round trip ticket to Europe, or at least a bad ass wardrobe. Pack a lunch.

Your Cooking Skills Will Improve

It sounds counter-intuitive, doesn’t it? If you’re making the exact same thing for lunch every single day, shouldn’t your cooking skills get worse or plateau? On the contrary, witnessing the positive results of eating the same meal every day – on your finances, on your health, and on your productivity – will make you more curious about how you can make additions or alterations to your meal. The success you’ve already experienced provides more incentive to try.

Eating the same thing for lunch every day sounds like a bland way to live, but you’d be surprised at how much time we waste deciding to eat the same three things we always do. Your life is way more exciting than what you eat at 12 o’clock and the benefits of grabbing the same salad and chicken each day may leave you wondering why you didn’t try this sooner.

Featured Image courtesy of Unsplash

A Q&A on money management with financial educator Aly Hirji

We’re more than halfway through January, and that means many New Year’s Resolutions have fallen by the wayside. But a few impulse purchases are no reason to forget about your goals. In fact, they should be even more reason to get up and get back on track.

Aly Hirji - Headshot - PL
Photo credit: Aly Hirji

Aly Hirji is a Toronto educator who focuses on Financial Literacy and Digital Technologies. Hirji is a proactive and motivated collaborator, teacher, and mentor who has implemented numerous initiatives to foster students’ academic success. He is actively involved in financial literacy workshops, career counselling, guidance on post-secondary pathways for youth and their parents, and much more. He kindly took the time to share his knowledge and advice for readers looking for ways to get serious about saving, set financial goals, and effectively manage their money.

A lot of financial advice is geared towards serious investors or families. Rarely do you see helpful articles about students and money that go beyond “buy your textbooks used”. It appears as though there isn’t a lot students can do to get serious about saving and investing aside from spending wisely. Do you think this is an accurate assessment?

I can pretty much agree that many articles – and much exposure and attention – are focused on youth, young professionals, and adults (middle age and elderly). Post-secondary students tend to be overlooked due to many factors from not fully partaking in the work force to not being a target market for financial institutions and certain products and services.

What are the biggest financial mistakes you’ve noticed that students make?

Many students do not take advantage of various funding mechanisms such as scholarships, bursaries, and grants that are easily accessible to fund post-secondary education. There is also the mismanagement of OSAP monies that students have access to after paying their tuition and fees, and feeling as if they’ve received a small lottery to enjoy and spend. I can speak from experience. I needed to ask my parents for assistance after my first few years of university. I learned that I needed to manage my money effectively and ensure that it would last for the school year. Any monies that I didn’t have to manage my loans, fees, costs of food, transportation, and clothing, came from taking on a part-time job and taking on a lighter course load of four instead of five credits per semester. This allowed me to balance my grades and effectively manage my money and that in turn enabled me to save some for the following year for any future increases in the cost of tuition, transportation, food, and school-related expenditures.

For many students or new graduates with loans – OSAP or otherwise – saving is something they believe they can only start doing after they’ve paid off their loans completely. On the other hand, tackling such a large amount of debt can leave one feeling overwhelmed or simply passive about actively paying off their balance. Do you think it is smarter to work on multiple financial goals concurrently when you are young and if so, how does one go about achieving this?

It is always good for students to manage multiple financial goals concurrently along with their other expenditures while in school. To start, a student should adjust their lifestyle and their budgeting. Start by looking at how you spend your cash and income for the month. Record all of your expenditures such as coffees, drinks, eating out, apps for your phone, etc. Then begin to determine which of these are your Needs and which are your Wants. You’ll quickly notice that many of those Wants (such as coffees, eating out) can be removed from your life. These habits will become a part of a student’s lifestyle and allow them to make more informed decisions when they make other important financial decisions regarding mortgages, car payments, managing credit card debt, and more.

Students need to understand that making good financial choices along with being disciplined about their expenditures is not only a short-term goal, but a long-term goal as well and one with impactful consequences. It’s very common for many young professionals (after undergrad and post-grad) to complain about making rent or saving for a home or car, while making poor everyday financial choices that add up.

There’s this perception that financial responsibility comes at the expense of an enjoyable life. What are some concrete strategies students and young adults can employ to strike a healthy balance between planning for the future and living in the moment?

Financial responsibility comes with making good choices and decisions. Buying a brand new car, without knowing that it will depreciate after it’s driven off the lot to purchasing a new cell phone plan with a new phone without understanding that the plan and cost of the phone is built into the cellphone plan. The same goes for doing research and shopping around for furniture or a rental unit to live in. Look at all the details and be knowledgeable through research. Access the various group benefits you have as a student through associations, parent alumni groups, and work-connected group discounts. You can enjoy life in many ways by going for walks, taking the local transit, partaking in programs offered by various community groups, and networking with alumni and various industry associations. Reading books, participating in art clubs and groups, as well as giving back to the community by volunteering are also good options. Many of these activities are free or have minimal to no costs. Start by seeing what truly makes you happy internally, and what gives you a sense of peace and balance.

I’ve come across a lot of writers online who are critical of the lack of compulsory financial education in schools. A few times a year you see posts on Facebook like, “I can tell you that the mitochondria is the powerhouse of the cell, but no one ever taught me how to do taxes”. Do you believe it is necessary to incorporate lessons about budgeting and accounting into the elementary or secondary school curriculum, and what are a couple simple concepts people out of school can google or read about to start their own financial education?

Yes, it is very necessary for Financial Literacy to be mandatory in curriculum. Financial Literacy is already in Ontario Curriculum through the Ministry of Education’s Scope and Sequence that has been added to Secondary School Curriculum, but it’s all based on the educator’s comfort level, understanding, and competence to deliver the material to their classes. There are resources available through the Canadian Bankers Association’s Your Money program, The City by the FCAC (Financial Consumer Agency of Canada), Junior Achievement’s Dollars with Sense program, Investor’s Education resources, and much more. There are plenty of resources to access to complement and help deliver Financial Literacy across curriculum. In addition, reading articles by Ellen Roseman and books like The Wealthy Barber and The Intelligent Investor can help start the dialogue between teachers and their students. 

In one or two sentences each what quick advice would you give to:

A student in their last year of high school living at home with a part-time job and planning to attend a post secondary institution the following year.

I would research and apply to as many External Scholarships (prior to acceptance) and Internal Scholarships (after acceptance) to help offset the cost of post-secondary education. Your part-time job may count against your OSAP eligibility so be aware of that. Also, in regards to working a part time job, you may want to take a lighter course load or do night school so that you can better manage the part-time job and the course load and have a smoother transition.

Someone in their second year of university, living in residence, who is on OSAP and working part-time.

Consider Internal and External scholarships to offset the costs of residence and tuition. Since you’re on campus, look for work-study and part-time work on campus to help lessen the travel time between school and work. Any extra monies from the part-time job would be good to use for savings for a rainy day in the future such as paying a good chunk of OSAP upon graduation. Build your experiences related and unrelated to your field so that you can network, develop more skills, and connect with people for future jobs and advancement. Networking is very important at this stage. Also, look into post-graduate studies, but do look at the career and industry trends in the job market.

A new grad working an entry level job.

Network after work through alumni and industry events, build your group of mentors and manage your income so that you’re paying off your high interest debt first and low interest debt last. Also, any extra income from overtime, part-time jobs and so forth should be put towards any debt so that you can be debt free quickly and can save for your future and long term goals. When it comes to your mentors, job shadow, ask for advice, guidance, and any wisdom to help in your journey of life.

What resources or websites would you recommend to our readers who are eager to learn more about handling their money?

Some helpful resources are:

Thank you for your time!