How to Help Your Child Reduce Debt & Achieve IndependenceAug 01, 2018
Seeing your child transition from high school student to university student can be a proud moment for parents. It can also be stressful and worrisome, knowing that student debt is a real burden for an entire generation of university grads. The good news is, there are steps parents can take to eliminate or reduce their child’s need for loans and consumer debt while they’re in post-secondary.
For most young adults, university or college is their first real taste of independence. The principal isn’t tracking attendance, class sizes are bigger and the onus is on the student to keep up with class work and be responsible.
It goes beyond studies too. When kids are on their own for the first time, it’s so important that they have the skills and tools to help them avoid overspending and unnecessary debt.
In a BDO First Call Debt Solutions poll from last summer, 67 per cent of Canadian grads said they had debt when graduating, owing an average of $22,084. Three-quarters of respondents (77 per cent) said they had some regret about the money they spent while in school, wishing they had worked part-time, been more frugal or had a budget.
So, what can a parent do to help their child avoid graduating with debt regret?
It can be hard to strike a balance when you’re giving your older kids financial advice — sometimes they’re receptive, sometimes they’re not. The best time to do this might be right now, during the less stressful summer months as your child prepares for their year at university. Here are a few tactics that parents can use.
Be a resource for finding a career and part-time work
As a parent, the more you know, the better resource you are for your child. For example, if your son or daughter is undecided on their career direction, there are plenty of guides out there that offer advice.Canadian Business has a great one on the best 100 jobs in Canada, analyzing factors like best pay, most opportunity and the best career outlook. This can help ensure that money spent on your child’s higher education is an investment in their future.
As for part-time work, in our poll mentioned above, 28 per cent of responding grads said they would have worked more during school. Often, finding work that fits around a student’s schedule can be a challenge, and one that your child doesn’t have time for during the school year.
Steven Van Sluytman, financial writer for Money We Have, has some good tips here on finding part-time work through co-op placements. Many programs offer the chance to be a teaching assistant, a job that provides experience in your child’s field of choice and could easily fit in their current school schedule.
Relate your experience
Sometimes the best thing parents can do is relate their own university experience to their child. They can also share cost-cutting opportunities that they’ve applied to the household budget that would work for a student lifestyle.
Budgeting for Student Life on the Financial Consumer Agency of Canada website has some great tips, tools and resources that parents can share with their university-bound children.
Ultimately, as a parent you just want to keep the financial conversations going with your child. Share with them any scholarship opportunities you come across, discuss money at family dinners and try to model good financial behavior in your own life — like prioritizing debt relief and keeping a household budget. Sharing important money lessons creates better habits, ones that your child will take with them when they head off to university or college.
These tactics should help parents relate to their child’s financial struggle a bit better. It will also help your child reduce any student debt they accumulate during their post-secondary years.