When it comes to preparing for university, one of the most important factors to consider is financial planning. University education can be expensive, and for many Canadian students, it is essential to start saving as early as possible to cover the costs associated with tuition, books, accommodation, and other expenses. Let’s explore how much you should save for university as a Canadian student and some tips on how to get started.
How much should I save for university in Canada?
The cost of a university education in Canada can vary depending on the institution, program, and location. According to a report by Statistics Canada, the average costs at the national level have risen by 1.7% for full-time graduate students, and by 2.6% for undergraduate students. For the 2022-2023 academic year, full-time graduate students will pay (on average), $7,437, while undergraduate students will pay $6,834. However, this figure does not include other expenses such as accommodation, textbooks, transportation, and other fees. In addition, tuition fees for international students can be significantly higher.
What should I consider when saving for university in Canada?
When calculating the total cost of attending university in Canada, you must consider not only the direct costs but also the indirect costs. Direct costs are the expenses that are charged by the university or college, such as tuition, textbooks, and fees. Indirect costs are the expenses associated with attending university but are not charged directly by the institution. These include accommodation, food, transportation, and other living expenses.
Here are some of the most important factors to consider when saving for university.
The Cost of Attendance
The cost of attendance will vary depending on the institution, program, and location. It is essential to research the cost of attendance for each university you are considering and the cost of living in the area. This will help you estimate how much you will need to save for university.
The Length of the Program
The length of the program is another important factor to consider. Some programs, such as medicine or law, can take several years to complete, which means you will need to save more money to cover the cost of attendance. It is important to consider the length of the program when creating your savings plan.
Your Current Financial Situation
Your current financial situation will also play a role in how much you need to save for university. If you have a part-time job or other sources of income, you may be able to save more money than someone who does not have any income. It is important to take a realistic look at your finances and determine how much you can realistically save each month.
Government Financial Assistance
In Canada, there are several government financial assistance programs available to help students cover the costs of university. These include savings programs, student loans, grants, and scholarships. Be sure to explore all the options available to you and apply for financial assistance if you are eligible.
Part-Time Work or Summer Jobs
Many students work part-time jobs or summer jobs to help cover the costs of university. When creating your savings plan, consider how much you can realistically earn from part-time work or summer jobs and factor this into your budget.
Your Future Earning Potential
Your future earning potential is another important factor to consider. Some programs, such as engineering or business, may lead to higher-paying jobs after graduation. If you plan on pursuing a high-paying career, you may be able to save less for university than someone who plans on pursuing a lower-paying career.
Your Personal Priorities
Your personal priorities will also play a role in how much you need to save for university. For example, if you value living in a nice apartment or having a car, you may need to save more money to cover these expenses. It is important to take a realistic look at your personal priorities and factor them into your savings plan.
Unexpected Expenses
It is always a good idea to plan for unexpected expenses, such as car repairs. You can create an emergency fund as part of your savings plan to help cover these types of expenses.
12 Tips for Saving for University
Saving for university in Canada can seem like a daunting task, but with the right planning and budgeting, it is possible to achieve your goal. Here are some tips for saving for university in Canada.
Tip #1: Start Early
One of the most important tips for saving for university in Canada is to start early. The earlier you start saving, the more time you will have to accumulate the funds you need. This will also give you more time to research and explore all the options available to you, including government financial assistance, scholarships, and bursaries. Even if you're still in high school, it's never too early to start thinking about your future education and saving for it.
Tip #2: Create a Budget
Creating a budget is essential when it comes to saving for university. Start by making a list of all your monthly expenses, including rent, food, transportation, and other living expenses. Once you have a clear idea of how much you spend each month, you can determine how much you can realistically save each month.
Tip #3: Set Savings Goals
Setting savings goals is a great way to stay motivated and on track with your savings plan. Start by setting a realistic goal for how much you want to save each month, and then set a long-term goal for how much you want to save by the time you start university. Keep track of your progress and celebrate each milestone you reach.
Tip #4: Open a Savings Account
The first step in saving for university is to open a savings account. You should choose a savings account that offers a competitive interest rate and no fees such as our no-fee Savings Account. This will allow your money to grow over time and help you reach your savings goals faster. What’s more, with Innovation, the more you save, the more you earn too! You’ll receive cash dividends for having a Savings Account with us which means more money for your university education.
Tip #5: Cut Back on Unnecessary Expenses
Cutting back on unnecessary expenses is a great way to save money. Consider making small changes, such as packing your own lunch instead of eating out or cutting back on your daily coffee run. These small changes can add up over time and help you save more money for university.
Tip #6: Explore Part-Time Work or Summer Jobs
Working part-time or taking on a summer job is a great way to earn extra income to put toward your university savings. Consider finding a job that aligns with your interests or skills, has flexible hours, is related to your future career, and doesn't interfere with your studies.
Tip #7: Save a Portion of Your Income
Once you have a budget in place and a job that pays, determine how much you can realistically save each month. It doesn’t matter if it’s a small amount as every bit adds up. Consider setting up automatic transfers to your savings account to make saving easier.
Tip #8: Apply for Scholarships and Bursaries
There are many scholarships and bursaries available to Canadian students that can help cover the cost of tuition, textbooks, and other expenses. Research the options available to you and make sure to apply for any scholarships or bursaries that you are eligible for. (On a side note, if you’d like to get a scholarship without writing that dreaded scholarship essay, enter to win an Innovation Scholarship!)
Tip #9: Consider Government Financial Assistance
The Canadian government offers several financial assistance programs for students, including student loans, grants, and tax credits. Be sure to explore all the options available to you and apply for financial assistance if you are eligible.
Tip #10: Look for Ways to Save on Textbooks
Textbooks can be a significant expense for university students. Look for ways to save on textbooks, such as buying used books, renting textbooks, or sharing textbooks with classmates.
Tip #11: Use Student Discounts
Many retailers and service providers offer discounts to students. Take advantage of these discounts whenever possible, such as student discounts on public transportation, movie tickets, and restaurants.
Tip #12: Take Advantage of Government Incentives
The Government of Canada offers an incentive to encourage Canadians to save for their education using an RESP (Registered Education Savings Plan). The Canada Education Savings Grant (CESG) matches 20% of your RESP contributions up to a maximum of $500 per year.
The Canada Learning Bond (CLB) is also available for children from low-income families born in 2004 or later. It provides an initial grant of $500, followed by $100 per year until your child turns 15.
As you can see, saving for university in Canada requires careful planning and budgeting. By starting early, creating a budget, setting savings goals, cutting back on unnecessary expenses, exploring part-time work or summer jobs, applying for scholarships and bursaries, and considering government financial assistance and incentives, you can achieve your goal of saving for university and setting yourself up for success in the future.
Remember to stay motivated, celebrate each milestone you reach, and never give up on your dream of pursuing higher education. If you’d like more help in charting out a savings plan, our expert financial advisors are always on hand to assist you. Contact us today!