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It's become broadly accepted that a post-secondary education is a prerequisite to success in the modern job market. As more students flock to universities and colleges, another fact is that many will be saddled with debt upon graduation.

Six in 10 Canadian students expect to have debt once they complete their education, according to an RBC/Ipsos Reid poll released on Monday.



A study released by TD Canada Trust on the same day found that 30 per cent of those emerging from school with debt expect to owe at least $15,000. Although half of students are working this summer to help pay for school, 66 per cent of those say they will not earn enough money to cover their expenses. Many students have no choice but to fund their education through student loans or lines of credit.

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The debt that comes with higher education is often referred to as "good debt" because it's an investment in your future on which you can expect to earn a high return. The other kind of debt - the bad kind - is what goes toward depreciating assets like cars and discretionary items such as tropical vacations. Still, even "good debt" is a burden and one that needs to be carefully managed. Unfortunately, for students that are already stressed by school commitments, money matters often take a back seat.



The RBC/Ipsos Reid poll found that debt management and budgeting are challenging for students. The majority of students feel that worrying about money will have an effect on their grades, but just half of those surveyed regularly monitor where their money is going and 74 per cent don't use a budget.



"It's only with a budget that you have a true sense of where your money is going," says Kavita Joshi, director of student banking with RBC. "Proper saving habits can lead to working fewer hours, thereby freeing up more time for studying and enjoying the university or college experience."



Ms. Joshi offers three key tips to help students stretch their dollars and better manage their money:



1. Prepare a budget.

Ms. Joshi finds that the majority of students want to budget, but don't know how to get started. "A budget will help you live within your means and avoid unnecessary debt," she says. The federal government has created a helpful online budget planner for students on its CanLearn website. Whether using an online budgeting program or an Excel spreadsheet, students need to track their sources of income and their expenses to understand where they're spending and whether there are any budget shortfalls. "These budgets have to be created early so that students always have a handle on their finances," Ms. Joshi says. "It's about making informed financial choices." RBC offers budgeting tools and information for students on its Better Student Life website, including a calculator that shows you how much money you need to get through the school year, based on your spending.



2. Take control.

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Once you have identified all of your expenses and know how much you're actually spending, you'll be able to make adjustments and have a basis for spending decisions. If your budget shows that money is tight, you can decide whether to cut back on expenses or get more hours at a part-time job. For students looking to trim costs, dining out, shopping and entertainment are the areas most likely to be addressed, according to the RBC survey.



3. Know your financial options.

It's important to explore all the financial options available to fund your education, including grants, scholarships and student loans. A good place to start looking is the federal government's website for students, which offers information on everything from financing your education to managing your loans and budgeting while in school. Get familiar with your obligations for various forms of debt.

For example, the repayment schedule for government student loans begins only after graduation and you may be able to negotiate terms based on your personal situation, while bank loans and lines of credit need to be serviced throughout the borrowing period. "You will want to repay debt as fast as possible," Ms. Joshi says. "Understand what debt is your highest interest rate and make higher monthly repayments to pay it down quickly."







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