A new TD survey of Canadian post-secondary students and their parents reveals that students are financially stressed — maybe more than ever before.
“Students in recent years are in a much more financially difficult position than in generations past,” says Emily Ross, VP, Everyday Advice Journey at TD. “The cost of living has gone up generation over generation quite significantly, and it appears it's really weighing on students’ capacity to afford things.”
Nearly two-thirds (65%) of student respondents said they are financially unstable, the survey found, and 45% said they don’t feel like they’re meeting their basic needs for food and housing. On the more encouraging side, Ross notes that 61% of student respondents said they wished they knew more about budgeting and financial planning.
Ross spoke with TD Stories to share some tips to help students and their parents feel more financially confident. Below, she talks about setting a budget for students and sticking to it.
Why it’s important to have a budget
While I think it's important for everybody to have a budget, I think it's extra important for students to have a budget because this tends to be the first time that they really have to manage their finances on their own.
A budget is a guide that can help keep you on track to reach your financial goals. The obvious benefits are knowing where your money's going, and having confidence that you're going to be able to make your payment obligations, like tuition and books, for the school year. And then, once your necessary expenses are met, whether you are then able to build your savings and plan for the longer term.
Another upside for students is the reduced stress that can come from having a budget. It can be quite a burden for students or for anybody not to know if they're going to be able to pay their next bill. Removing that uncertainty can have a positive impact on mental health.
How to create a budget
It can be intimidating to start budgeting.
One of the first things that I recommend students do is get a good idea of their income; how much money do you have coming in? Then you're going to want to make a list of your monthly expenses – things like rent, food, tuition, books and other recurring costs.
If you need help crunching those numbers, a tool like the TD Personal Cash Flow Calculator can help. Another really good resource that TD has is the TD Student Budget Calculator, which takes you step by step through the major spending categories and what sources of income you may have. That can help you put together that first budget as a student.
We've also just relaunched our TD Student Advice Hub with lots of great resources and content.
Another source of assistance would be to talk to one of our Personal Bankers at a TD branch. Helping our customers to build their financial confidence is important to us. A TD Personal Banker can help you get started on how to create a budget tailored to you.
Budgeting advice from social media — yes or no?
I enjoy TikTok as much as the next person, but when it comes to financial advice, at TD we believe it's important to have personalized advice that is relevant to your particular situation. That's not what you're going to get on social media. We also caution against getting financial advice from people who aren't financial professionals. I would only take what people say on TikTok or any other social media platform as entertainment, maybe as food for thought, but not as a replacement for financial advice.
One way to track your spending
The TD MySpend app is a pretty cool app that allows you to track your savings and your spending from your TD deposit and credit card accounts. It can create daily and monthly cashflow views. It can also help you to draw up a wish list of savings goals and can provide insights that could help you achieve those goals.
How to help stick to your budget and get in control of your spending
In the survey, we saw that 64% of student respondents currently have some form of a budget to track their monthly expenses but just 41% say they’re able to follow it on a regular basis.
For those who are having trouble staying on budget, being able to distinguish between needs and wants is really important.
Ask yourself, what do you need? You need your tuition, you need your rent, you need your books, you need your food. You may need transportation. Then there are a lot of things that are wants. Do you need to go to a restaurant, or do you want to go to a restaurant? How much are you spending on entertainment? How much are you spending on clothes? Are you shopping at expensive stores?
As well, are you paying for expenses that you don't need or use? For example, a gym membership that you're not using or maybe too many streaming services? These subscription-type expenses can really add up to hundreds of dollars a month. It's one of the first places we suggest to look for possible savings on your expenses.
How a student line of credit could help
A line of credit is a pool of funds that you can draw against to pay for your expenses . You’re approved for a certain amount. However, you must remember that when you use those funds, you're borrowing that money from the bank and interest will be charged on the amount that you borrow.
How parents and mentors can help students budget (and why they should)
Obviously parents want to be able to help their student children financially, and almost all of them — 94% according to the survey — are doing so. But our survey also highlighted that 42% of parents said helping their children financially with school means limiting spending on nice-to-haves like vacations or other splurges.
So, for current parents of post-secondary age students, or students who are nearing the end of high school, I think it's important that they have a budget and understand what their cashflow is going to look like, what they're able to contribute, and what trade-offs they’re willing to make on their needs and their wants.
Parents should find out if there are any potential sources of financing for post-secondary education that might be available to their kids, like provincial student grants and loans, or financial aid from through their school.
And remember, the more students stick to their budget, the less likely they are to come to you in a state of needing more money than you had expected to provide. That’s an incentive to plan together with your student for their financial success over the coming years.
For more information and tips about helping to meet a student's financial needs, visit The TD Student Advice Hub or make an appointment to speak with a TD Personal Banker at your local branch.
About the survey
This Maru Public Opinion survey conducted on behalf of TD Bank was undertaken by the sample and data collection experts at Maru/Blue. 1,029 randomly selected Canadian adults who are Maru Voice Canada online panelists were surveyed from July 26th to August 4th 2024, of which 514 are currently enrolled post-secondary students and 515 are parents of children currently enrolled in post-secondary school. The results of this study have been weighted by region to match the population, according to Census data. For comparison purposes, a probability sample of this size has an estimated margin of error (which measures sampling variability) of +/- 4.3%, 19 times out of 20. Discrepancies in or between totals when compared to the data tables are due to rounding.