Written by Vanessa Santilli on Feb. 13 on CreditCards.ca
Despite the weather, spring is close. For many students, spring break is a time to catch up on studying, or maybe take a trip home or to a warmer locale. But it is also a great time to revisit your finances to see what’s working — and what’s not.
Here are some tips on how to inspect your finances to make sure you’re in good shape for the rest of the term.
Revisit your budget
Hopefully, you created a budget at the start of the school year. Now is the time to see if your expenditures are panning out as planned. Compare your predicted figures to your actual numbers by examining your bank or credit card statements.
This will call attention to how you’re spending your money. Is every other line on your statement a fast food transaction? How many of those grocery store charges were for party supplies and how many were for actual necessities? Make sure your spending matches your allotted budget.
“If I was aware of how much I was spending then I probably would want to spend less,” says Ryerson University student Luc Rinaldi.
“Revisiting your budget periodically gives you an opportunity to make adjustments to keep you on track,” says Suzanne Dorosiewicz, trustee in bankruptcy and vice-president at accounting and advisory firm BDO Canada Limited.
Stop paying for what you don’t need
First, the obvious: cancel any subscriptions you don’t use. Many of us sign up for free one-month trials and simply forget to cancel them. Even if it’s only $5 a month, stop paying for what you don’t use.
Do you have cable and Netflix and Hulu and Amazon Prime? Chances are, you can live with only one or two TV services. Choose the ones you use the most, and get rid of the rest.
Next, take a look at your phone bill. Do you pay for four gigabytes of data, but only use two every month? Do most of your paid minutes go unused? If the answer is yes, call your phone provider and adjust your plan accordingly.
Finally, if you’re paying more for fast food or nights out than you can afford, it’s time for self-discipline. Start buying groceries and making your own meals, says Dorosiewicz. Force yourself to go to the grocery store on Sundays and buy supplies for at least four meals for the coming week. When your friends suggest another night at a bar, suggest a cheaper alternative, like pizza, beer and board games at your place. Find places that offer student discounts. If you live with roommates, Dorosiewicz suggests splitting the cost of common items and sharing food.
For motivation, try taking your bank statement and highlighting all your unnecessary charges. Write down how many you made last month, then try to reduce that number by five each month after that. Pin it up somewhere you’ll see it daily, or even tape the number to your debit or credit card so you’ll see it each time you want to swipe.
Consider credit carefully
If you’re going to increase the budget in any area, or if you have holes in your budget you need to fill, you may be tempted to get a credit card. But think twice before going that route. Many credit card providers have student options, but a credit card can lead to more spending and debt.
“While credit is useful for online purchases like bus tickets and cheaper textbooks, it’s easy to go over budget because of that ‘extra’ money credit cards seem to provide,” says University of Ottawa student Thien-An Nguyen. “And the point promotions are also a big temptation.”
If you do decide you need a credit card, it’s important to determine which card is the best fit. More than likely, you want one with low interest and no annual fee.
“You do not want to pay an annual fee for a credit card that offers rewards you may not need,” adds BDO’s Dorosiewicz. In other words, if the credit card is strictly for books, don’t pay an annual fee on a grocery rewards card.
Question curious charges
As you’re going through your statements, highlight anything unusual. Do you understand each charge? Are there any transactions you don’t remember making? Are you paying for things you don’t need anymore?
If there are any charges you don’t understand or that you feel certain you did not make, call your bank as soon as possible to straighten them out. You may need to cancel your debit or credit card if there’s a chance someone else has been using it.
Reduce clutter
Half the battle of keeping track of your finances is keeping them organized. Many people feel stressed in a disorganized environment, so tidying up is an easy way to get instant relief.
Determine what financial documents you need to keep, and what can go into the shredder. Keep records of tuition or rent payments, but toss the receipt from the Chinese food you ate three months ago.
If you haven’t already, try going green — opt to receive bank statements and bills online instead of in paper form (unless you need the physical bill to remember to pay it!). Most, if not all, bills are payable online.
Get a job
By now, even freshmen should have settled into their new university environment. If a job wasn’t on your list of priorities in the autumn but you find yourself barely scraping by, it might be time to get one. Many on-campus jobs will work with your class schedule to give you enough hours for some extra cash, but not so many you fall behind on your schoolwork.