If the news about the rising cost of tuition and student debt are keeping you awake at night, you are not alone. Stories about young people graduating from university with mortgage-sized debt loads seem to be everywhere lately. But experts agree, that no matter our income level, parents can help their children meet their education goals by creating and sticking to a written plan.
Recently, the Financial Consumer Agency of Canada (FCAC) released its findings from a cross-Canada financial well-being survey it conducted in early 2018. Their survey results show that “regardless of the amount of money someone makes, regular efforts to save for unexpected expenses and other future priorities appears to be the key to feeling and being in control of personal finances.”
It turns out, though, that less than half of us are actively saving for things like RESPs or RRSPs, let alone for other unexpected expenses. One in 10 of us uses credit to cover monthly expenses and a similar number of Canadians report that they regularly splurge and make purchases they can’t afford. These statistics beg the universal question: if sticking to a budget increases our overall sense of well-being, then why do so few of us actually do it?
Like anything that’s good for us, it would seem that budgets are easy to put off getting around to. Financial advisors suggest various reasons for this. Modest income earners may feel that having a budget won’t work for them because they have no discretionary income to save in the first place. Meanwhile, higher earners may be meeting their monthly payments, so they don’t see the value in bothering with a budget.
Another element that may be holding people back from creating a written plan is that the process can seem overwhelming. So, we created this simple monthly budget that you can download to get you started and help ensure that you’re contributing to your and your children’s future goals.
A basic budget can be created by using our tool and following these easy steps:
By sticking to a written plan and tracking your spending, you can make more informed decisions about where you want your money going. You can also ensure that you are maximizing your ability to contribute to and enjoy the compound growth that comes with products like RESPs, RRSPs and by paying down debt faster.