Managing the debt you’ve accrued
For so many of us, student debt is unavoidable. There will come a time (or a number of times) in every student’s life where we just feel weighed down, even suffocated by the debt we need to put ourselves in just to obtain our degree and get the education we need for our future careers.
But aside from tuition and legitimate living costs, a lot of students’ debts come from irresponsible spending. I sat down with Alex B to talk about his debt crisis – a story I’ve heard many times in my years at Guelph. For Alex, it’s not just about OSAP piling up. For him, he found that the government just wasn’t giving him enough money to live, so he did what many students do and asked his parents to co-sign for a line of credit. He accumulated this along with two credit cards totaling $2000. He said his low point was when one of the cards was deactivated due to months of missed payments.
For many students, it’s not an obvious “I’m incredibly poor” situation. Getting OSAP disbursements or credit cards and lines of credit can often be looked at as ‘getting paid,’ when in reality you’re just accruing debt. For Alex, his parents bailed him out on many occasions when he just couldn’t make his payments, so instead of sitting down and creating a budget, he just kept going to his parents for money.
This can be the situation for a lot of students. It’s tough for us, and it’s tough for our parents as well, because they just don’t know when to say no. Do you really need the money, or are you just going out for another night downtown? Often these tough financial times take a toll on the relationship we have with our parents. They can get frustrated with our spending habits, and in Alex’s case, instead of sitting down and creating a budget with him, his parents would often resort to yelling at him and telling him he needed to keep his debt down.
Well that’s easier said than done when you have no experience of creating a budget, or of sticking to it. Being financially responsible is something you need to learn to do – and it’s a process – not something that can happen overnight.
Controlling your debt level is so important. It gets really tricky when you have a credit card (or multiple cards), OSAP, and a line of credit with your bank. Like Alex, you might find it unmanageable to pay the minimum payment on your credit card each month, but if this is your financial situation, it’s going to be much harder after graduation than what you’re dealing with now. Many students are even finding a job after school is a hard enough task to complete.
The answer isn’t a quick fix. Asking your parents for money is not a sustainable solution. It takes serious spending control and lifestyle changes. Talk to a financial advisor at your bank or visit the third floor of the UC to find out what can be done about your personal financial situation. The truth of the matter is that it’s your responsibility, not your parents, to get in control of your finances. You really need to sit down and get a payment plan on track for any credit cards that still have balances, even if you don’t have the money – especially if you think you don’t have the money.
What you need to remember though, is that there are so many people in the same situation. There are so many people with incredibly high student loans and credit cards that were maxed with unnecessary purchases and nights at the bar that cost far more than what was allocated in their budget.
Being perpetually poor means managing the debt you’ve accrued while attending university with the tools made available and gaining cognizance of your spending habits. You can’t beat yourself up over past poor spending; you can only deal with the future. Minimizing unnecessary expenditures is step one to managing your finances.