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Post-Secondary Students in Need of Money Management 101

Capital One survey finds students concerned about lack of funds, but making basic financial mistakes that cost them cash.

Toronto, ON (August 21, 2008) – Most Canadian post-secondary students are working hard this summer - with nearly 80 percent (79,7 percent) taking on summer jobs – and the majority (71 percent) planning to use their hard-earned cash to help pay for living expenses and tuition in the coming school year. However, according to Capital One Canada's back-to-school survey, nearly 60 percent of the students surveyed (59,6 percent) are still worried about having enough money to last them through the school year. In fact, some students said they make some big (and surprising) sacrifices to get by:

  • Fifty-three percent said they dip in to savings to cover every day expenses
  • Thirty-six percent said they skip meals to save money
  • Twenty-four percent said they forego medication, dental visits or other medical treatment
  • Eleven percent said they sometimes wear dirty clothes when they can't afford a visit to the laundromat

Despite the worries about not having sufficient cash to cover school year expenses, the survey revealed that many students are not using basic money management skills to help make ends meet. More than half (51 percent) of students do not develop a budget and stick to it, and forty percent do not track their daily purchases. The survey also showed that saving their summer earnings is not a priority. Forty-six percent of students are saving less than half of their summer earnings for the upcoming school year, and more than one in ten (12,8 percent) are not saving any of their summer earnings at all.

"Going to college and university is a stressful time, and worrying about your finances on top of your studies can add another incredible burden to students. That's why it is more important than ever for young people to learn the basics about money, budget management, and the difference between needs versus wants," said Laurel Ostfield, spokesperson for Capital One Canada. "Our survey reveals that some of the most basic money management techniques are not being used by students, such as developing a budget, tracking your expenses and having the discipline to stay within your budget limit."

Daily expenses take a toll, with students reporting that they generally overspend on restaurants (45,2 percent), groceries (44,4 percent), alcohol (32,9 percent), clothes (32,7 percent), and transportation (25,18 percent).

While economic challenges, like higher gasoline and food prices, may be compounding students' financial woes, the survey also indicates that many students are making some financial mistakes that can be costly. Par exemple :

  • Eighty-two (82) percent of students do not review their credit score annually.
  • Fifty-three (53) percent of students dip into savings to cover everyday expenses.
  • Thirty-nine (39) percent of students do not pay more than the minimum amount on loans every month.
  • Fifteen (15) percent of students do not make their payments on time every month.
  • Sixteen (16) percent of students exceed their credit limit.
  • Seventeen (17) percent of students borrow money to pay off another debt or loan.

Students may not be the only ones to blame. Half of the students surveyed (50,4 percent) said they learned how to manage their finances from their parents, while only 1,8 percent said that they learned about financial management at school. Just over forty percent (41,2 percent) said they taught themselves how to manage their finances.

"We have students who come to us for credit counseling services on a regular basis. Unfortunately, by the time they come to see us, they are usually deep into debt and creditors are knocking at their door," says Elena Jara, creditor relations specialist and education coordinator for Credit Canada. "This time of year is a great time to sit down with your children and discuss finances. Teens are eager to learn about money management and they want to learn about it from their parents."

After all, what is the first thing that students do when they run out of money during the school year? Ask their parents of course. Almost twice as many students (43,4 percent) would rather ask their parents than get a job (22,1 percent).

Money Management Tips
To help you stay fiscally fit, Capital One offers the following advice to students:

  • Develop a budget and stick to it. A budget is an important first step to successful financial management. It will help you to organize your finances and set parameters on your spending.
  • Keep track of your daily purchases – Knowing what you spend every day will help you stay within your budget limits.
  • Know your credit score and review it at least once a year. This score is used by lenders, landlords and potential employers to assess your financial integrity. Obtain a copy of your credit score for a minimal fee by contacting
  • TransUnion (www.transunion.ca) or Equifax (www.econsumer.equifax.ca).
  • Pay more than the minimum due. When you can, try to pay more than the minimum balance due on your credit card bill every month.
  • Make your payments on time. Pay close attention to the due date for your payments since a history of late payments will affect your credit score.
  • Shop around to find the credit card that best meets your financial needs. Comparison shopping can save you money and may even provide you with valuable rewards.

Do NOT …

  • Pay bills late.
  • Borrow money to pay off another debt or loan.
  • Obtain a new credit card to pay off an old one.
  • Dip into your savings to cover everyday expenses.

(Source: Capital One Canada. For more tips and advice, visit fr.capitalone.ca)

Méthode de l’enquête
For the Canadian Back to School Study. Braun Research was engaged to conduct 502 interviews with men and women throughout Canada who are 18-25 years of age and were planning to attend post secondary school in the fall. All respondents were emailed using a random sample of panelists. Surveys were conducted online from July 18th - July 25th, 2008. The margin of error for the study is plus or minus 4,4 percentage points. Interviews were verified under separate email to determine truthful screening.

Sampling for this study was conducted using a panel of pre-selected, opted-in Canadian residents between the ages of 18 and 25 who were screened whether or not they were college bound this coming fall. All interviews were conducted using Braun Research's proprietary online software.

Statistical weights were designed from statistics from the Ministry of Education www.edu.gov.on.ca/eng and the Canadian National Census www.censusfinder.com/Canada-census-records.htm

À propos de Capital One
Situé à Toronto en Ontario, Capital One offre aux consommateurs canadiens une sélection de cartes de crédit MasterCardMD depuis 1996, l’année où l’entreprise a lancé la carte Platine MasterCardMD au Canada. Capital One Canada is a division of Capital One Bank, a subsidiary of Capital One, N.A. of McLean, Virginia (NYSE: COF)