Canadian Personal Finance Blog

Archive for the ‘University Costs’ Category

Given the numbers we looked at from Stats Canada yesterday you need to ask yourself, just how much is this all going to cost and how can I deal with this expense.

Let’s run down some of the expenses you are going to need to remember are part of the entire “going to University” equation:

• Cost of Tuition (which varies depending on the school gone to, and the faculty in that school as well).
• Service Fees, some of these you cannot hide from and you need to remember they are there.
• Books and Lab Fees, not expenses you can hide from (you can try to lower them by getting used books or buying them where they are cheaper).
• Living expenses (if the child lives away from home), which could be either a residence and food plan, room and board if they rent a room off campus, or Rent and living costs if they live in an apartment-like model.
• Moving costs, if they leave home (especially if they are going a LONG way away).
• Computing costs, if they don’t already have a computer
• Back to school supplies, paper, printers, etc., etc., etc.,
• Coming home money
• Everyday living money

First, you need to ask, “Am I going to pay this, or am I going to leave it up to my kids?”. In my discussions previously many of my readers have pointed out they didn’t have their education paid for, nor do they plan to pay for their kids’ education. This is an option for a lot of people (and the only option for some folks too). If you don’t plan on footing the bill, then I guess you don’t need to worry about this.

If you are planning on paying for this, how are you going to save? Will you use the RESP savings vehicle? Maybe use your TFSA for extra saving? Get your kid to get a job while at school to help out (so they appreciate the cost of their education)? Hope to win the lottery? Sell a kidney on e-bay? All interesting ways to save for the financial onslaught that University costs can be.

Are you going to have multiple kids at University at the same time? That makes saving doubly important (and you better put twice as much away, at least).

Co-op education for your kid? That way they earn their way through school and it is less of a burden on you?

Nobody moves out, the kids go to school locally and live at home. That saves a WHOLE LOT of money, but then again, you have another Adult in your house, which may cause other issues, but that can cut your University bill in half, if the kids live at your place (but then, how do you get them to move OUT once they have a degree?).

Planning for this orgy of spending can cause your hair to turn prematurely grey, however, it will help you out in the long run.

So Stats Canada came out last week with some very interesting numbers about the cost of University across Canada and the relative increase in costs. I find this interesting because as of this coming year I will have two kids in University and I am learning a lot about the “Ins and Outs” of University fees (which seem even more complicated than bank fees, if that is possible).

The main message from the article was that Tuition Fees are up 3.6% from 08/09 to 09/10 Academic year, which means their inflationary increase is almost as good as Foods meteoric price increases.

On average, undergraduate students in Ontario also paid the highest fees in Canada at $5,951. Students in Nova Scotia had the second-highest average tuition fees at $5,696.

I feel so honoured to be the most gouged in all of Canada, and I’d like to point out that is the Average, which means some schools are more than that (and different faculties in those schools are even higher).

Tuition Only

This is the other more important point in this study, is that Tuition is really only the tip of the iceberg when it comes to University costs, yet it is the only part of those costs that are tax deductible (living expenses are somewhat deductible, but only in the hands of the student).

Nationally, the additional compulsory fees increased 6.8% compared with last year. On average, Canadian undergraduate students paid $749 in additional compulsory fees in 2009/2010, up from $701 a year earlier.

How bad can the fees be you ask, let me run through the list of fees I paid for 4 months for my daughter at WLU (this is excluding Tuition):

• Administrative Council Fee $29.92
• Copyright Agreement Fee $1.70
• Comprehensive Student Fees $150
• Student Union Building Fee $26

Now I don’t mean to pick on my daughter’s Alma Mater however, these are only SOME of the fees I pay (along with a Bus pass fee and Insurance plans too). Hefty eh? Oh, did I mention she also pays $450 rent for a room and has to pay for her own groceries? Yes, this is not cheap, and it is not getting any cheaper either.

With a 4% increase a year on the horizon, think of this interesting statement, if you have a newborn by the time he or she wants to go to University, Tuition costs will have doubled if this trend continues, and my guess is they will have MORE than doubled by that time AND the fees being charged will increase as well (and book costs, let us not forget those too).

Tomorrow, more discussions of the costs of University.

For those of you who are unaware, Banks try to capitalize on attracting new (and young) customers on campus these days (most Universities have entire bank branches on campus).  They are quite aggresive in their marketing to these new potential clients, enticing them with iPods and other “perks” to open new accounts.

When I was at University the on campus bank knew that a great many of the students were in Co-op, and thus excellent new victims for their bank service fees. I opened a bank account on campus at first mostly for ease, since I lived on campus at the time, but then they started enticing me with new exciting services like:

• My first credit card, because now I actually made money (4 months at a time), and I could now start learning about the joys of CREDIT (and hopefully not pay my bills on time).
• RRSP loans, to move income around from year to year (if one year I worked for 8 months, I could normalize the income with the next year, by using this loan, for a small fee).
• ATM machine access and their fees (yes I am that old that this was a new service back then).

The CIBC branch at the University of Waterloo had a pretty sweet business running, and I am sure there are people who still bank with CIBC because they started at the U of W. I changed banks after I moved off campus and Canada Trust was actually a closer bank, but I kept my CIBC credit card for a long time.

Banks are always on the look out to get NEW clients that want to pay Bank Fees and put their savings in their banks for the bank to use as well.  When you send your child/student off to school keep this in mind and maybe talk to your kids about banking and the in’s and out’s of the “Banking Game”.

When your kids are younger you worry about spending too much on their backpacks or maybe another outfit for the start of school (this is a good thing, controlling spending early on is a good thing for the kids too, because it sets their expectations to the right level as well), but as they get older the expenses become much more interesting, and they can balloon to very large levels.

After driving up and down the 401 this past weekend seeing, Vans, SUVs and even Micras stuffed to the gills with furniture, computers, and clothes it says loudly that once your kids get to University, back to school can take an exponential jump in your budget. I am not saying that this MUST happen, just that it can happen with over-zealous parents who want to give their kids the best.

The point of University is to learn, and one of the things that kids need to learn is how to cultivate and develop their own Inner Frugality. If you buy your kids $3000 worth of furniture for their apartment, they are effectively living YOUR lifestyle (i.e. it’s just like home), whereas maybe they should be learning to live a frugal lifestyle instead? At University I had a treasure trove of old, used and scrounged furniture, and I loved it. No, my living room was not something out of “Better Homes” but it was mine (mostly my parents gave me an old dresser), and that is (I think) one of those things a kid in post secondary education (or one that has just moved out) needs, that sense of self.

Teach your kids to live within their own means, when they spread their wings and leave the nest, and that may be the most important thing they learn.

Given the late date of Labour day this year, school (aka Skule) starts a little earlier than usual (on September the 1st) and thus it means back to school sales are in full swing (in fact they are almost over, I can find a lot of Halloween Candy right now, but we can talk about that later).

Back to school is a huge drain on most families funds (any family with kids from age 5 to 21, at least), and the things that “need” to be bought keeps expanding and adding up.

What kind of expenses, you ask?

• Paper,pens, pencils,  OK we needed paper when I was a kid, so that isn’t too bad.
• Student Fee $20
• Yearbook $35
• Lab fees for science courses
• Athletic fees
• Gym fees
• New clothes ($100-$300 per child)
• New athletic shoes
• Binders, yes, we used those too.
• Ink for your computer’s printer, OK now we are in a new world. ($50 for sure)
• A new printer, because last year’s printers jets are clogged. ($50 at least)
• Bus passes, yes, I have to pay for my kids busing to school (that’s about $130 a month)
• A new computer because the kids’ computer is really crappy (OK that is optional but if your child is going off to University you are going to be paying this for sure)
• Furniture if your child is moving into a house at University (that is not furnished)
• Cost of dropping your child off at school (that ain’t cheap if you have a run of over 500 kms)
• Meal plan costs, lunch costs, etc.,
• Book costs for University students
• Cell phone costs

You kind of get the picture, this explains why September is actually the biggest spending month of my fiscal year.

More rants will follow about this subject, but please feel free to add more expenses I may have missed as comments too!