- TD Canada Trust provides budgeting basics to help students minimize the post-grad financial bulge -

- TD Canada Trust back to school infographic available at: http://www.smrmediaroom.ca/TDFreshman15 -

TORONTO, Aug. 21, 2012 /CNW/ - While first-year post-secondary students across the country may be well prepared for the 'Freshman 15' when it comes to extra pounds, it's expanding debt - not waistlines - that students would be better served to prepare for. With student debt on the rise, the repayment period could last years and cost thousands of dollars in interest. Young Canadians can help stave off lingering student debt and get post-grad life off to a solid start by following an in-school financial plan from day one.

"As high school grads prepare for their first year of university or college, it's important they fully understand the financial realities of studying away from home," says Raymond Chun, Senior Vice President, TD Canada Trust. "While some students may feel comfortable with where they are financially, the majority are feeling anxious (34%) or stressed (24%) about finances for school¹."

It's no wonder some students are stressed, with the total cost of a four-year undergraduate degree away from home averaging $84,000² and the average debt of a graduating university student growing to $27,747³. If a graduate were to pay approximately $260 each month towards this debt, assuming an 8% annual fixed interest rate, it would take 15 years and more than $19,000 in interest to become debt-free⁴.

"There's no doubt a post-secondary education is beneficial in Canada today, but it can be difficult to recover financially after spending such a large amount of money," says Chun. "The key is learning financial responsibility and how to manage money before heading off to school so that you don't end up with more debt than necessary."

Financial Fitness 101
As students prepare to live on their own for the first time, many will be getting a crash course in cooking and laundry, but it's important to learn financial basics, too.

"Financial literacy is an essential life skill that students need to learn in order to be successful adults, so talk to your parents or a financial advisor about managing money, bills and debt before leaving home," says Chun. "Most importantly, students should create a financial plan that not only includes how they will fund their studies, but also how they will make their money last throughout the year. As no two financial plans are the same, students should take time to make a financial plan and budget catered to their specific needs to help them stay on track."

When creating a budget, Chun says to list the money you have coming in such as scholarships, work, family and student loans. Then calculate your expenses like tuition fees, books and rent.  Subtract your estimated expenses from the money you have coming in.

"If you have a negative balance, you need to rethink your spending or look for alternative financing options for school, such as a part-time job or additional bursaries," says Chun.

Chun adds that students should also take advantage of the financial tools and advice available to them, whether from their bank, trusted online resources or family members. "Make sure you're with a bank that can serve your needs for student banking and financial advice, with locations and hours that are convenient for you."

Strengthen your core (budget)
Tuition, books, housing and groceries are a necessity for most first-year students, but a survey from TD Canada Trust reveals many students spend their money on wants versus needs. The survey revealed that besides basics like rent, tuition and groceries, 28% of students believe they spend most of their money on buying food and drinks out at bars and restaurants, and another 10% think they spend most on clothing and accessories⁵.

"The cost of tuition, books and rent is expensive enough," says Chun.  "Adding on too much unnecessary spending can tip the scale and push you even further into debt than you need to be. That's not to say you can't have fun while living away from home, but you should make sure the essentials are covered off first. Make sure to look for ways to save through student discounts to keep even more money in your pocket."

Toning up your financial plan
Six-in-10 post-secondary students (64%) anticipate they will have some amount of debt when they graduate⁶.  Minimize your student debt load by reevaluating your personal finances periodically throughout your post-secondary studies.

Chun provides these tips to help keep your finances in good shape:

• Follow your budget and revise each month.  Without a doubt, you can expect lots of change in your life as a student. In addition to looking at your budget on a monthly basis, make sure to update it as your financial situation changes. If you have questions, visit your local bank branch to speak with a financial advisor who can help make the most of your money.
  
  
• Pay your monthly bills on time and in full. It can be challenging to keep track of your bills - some are paid daily, monthly and others only once per semester or year. Make a note in your calendar of when bills are due so you don't lose track.
  
  
• Keep track of your debt. Make sure you are on top of what you owe, as well as the interest rate and payment schedule. Start paying off student debt as soon as you can and increase payments as your income rises. Not only will this help reduce the amount of interest paid, but it will allow you to start saving earlier for the next big purchase, like your first car or home.

Click here for a back to school infographic on personal finances for students and how to graduate with less debt. More information can also be found at: tdcanadatrust.com/student.

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.

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^{1, 5, 6} TD Canada Trust Student Finances Survey 2011
² TD Economics, http://www.td.com/document/PDF/economics/special/sf0911_education.pdf
³ Canadian University Survey Consortium Graduating Student Survey 2009
⁴ TD Economics

SOURCE: TD Canada Trust