Pandemic fuels students’ worries about finances and the future

Post-secondary students are emerging from the pandemic with worries about their finances and their future, according to a survey by CIBC Market Research.

But this pro-active and financially savvy generation still has high hopes and ambitious long-term plans, says Carissa Lucreziano, vice-president of financial and investment advice at CIBC.

“There is a positive feeling,” she says. “Because of their age and what life stage they’re at, students have the rest of their life to really plan and to save for their future goals.”

Where students felt the most impact

In the May 2021 poll, an overwhelming 97 per cent express concern about the effect the pandemic has had on their academic careers, including the quality of their virtual education and the possibility that a return to in-person classes could be delayed this fall.

Almost as many, 93 per cent, say they have come out of the past 18 months with worries about their health and welfare. Mental health concerns increased significantly over the course of the year, with 34 per cent of those polled in May —up from 19 per cent in May 2020 — citing mental health as their top concern.

“Mental health is a really big component,” she says. “And this may come from the lack of social interactions, concern over the quality of education, and finances.”

Two-thirds (66 per cent) of the students say they have been affected financially by the pandemic, through job loss or loss of income or business. That’s double the percentage reported by the general Canadian population.

Ms. Lucreziano says students, on average, spend almost $14,000 on academic-related expenses per year and expect to graduate with about $28,000 in education-related debt.

“Students are concerned about the long-term impact on their finances because of the debt that they’re acquiring, and the lack of future employment prospects,” she says.

Many worry about the effect the pandemic will have on their career trajectory, given the lack of networking and work experience opportunities over the past year and a half, she says.

Graduating students responding to the poll are expecting to earn salaries in the range of about $38,000 a year, which adds to the challenge of living affordability in any major Canadian city, she says.

Tips for managing your money

“Graduates really need to focus on managing debt in their early career phase, like diligence in repaying and not becoming over-extended,” says Ms. Lucreziano. “Mismanagement in this area could have a ‘snowball effect’ and impact their credit and the opportunity to attain future goals like the ability to get a loan, buy a home and overall financial wellbeing.”

Fortunately, there are many online tools and services available, including AI-fuelled money management insights on your spending trends and free credit score service through the CIBC banking app.

“Students are very astute in looking for resources, but they need help pulling it all together,” she says. “That’s where an advisor from your bank comes into play. They can help you put a game plan together to map out a route for both your short-term and long-term goals.

“If you feel you’re falling behind, which many students have cited, and if you have important goals that you want to achieve that you haven’t been able to start planning for, it’s really important to ask for help,” she says.

“In addition to professional advice, seek out resources and information online. We have a variety of articles, videos and tools available online to help you navigate your finances on CIBC Smart Advice.”

Despite the pandemic worries, year-over-year there are positive trends in the way students feel about their overall financial wellbeing, says Ms. Lucreziano.

“As things open up and jobs start to surface again, all of those things that I mentioned earlier, like the ability to network, the ability to have part-time jobs that are in their field or experiences, we’ll start to see the feeling of financial wellbeing come back for students,” she says. “So, it absolutely is looking up.”

Maru/Blue Omnibus, on behalf of CIBC, surveyed more than 1,000 post-secondary students in May, 2020 and again in May, 2021.

Advertising feature produced by Globe Content Studio with CIBC. The Globe’s editorial department was not involved.