How to Help With Student Debt (Without Footing The Bill)Jul 31, 2018
Postsecondary education – a time to expand your mind, your opportunities and (unfortunately) your debt. As discussed in our podcast, the cost of attending college or university is definitely not cheap. For parents who are already struggling to deal with their own financial obligations (mortgage payments, reducing debt, saving for retirement), it may not be financially feasible (or even a good idea) to foot the bill for your child’s education.
While you may not be able to help financially, there are other helpful and positive ways you can help your child with student debt. Here are a few ideas:
- Determine what you can comfortably contribute
A recent study shows that 45 per cent of parents will postpone retirement in order to assist their kids with the cost of post-secondary education. Moreover, 46 per cent of parents will not be able to pay off their debt in order to help their kids with the cost of school.
Although you want to help your child in any way you can, our LIT’s cautioned about the danger of putting off your own financial obligations, responsibilities and goals in order to financially support the education of their child. As there are many student financial support programs, loans and grants, you shouldn’t add to your own debt. Instead, determine what you are comfortably able to contribute and discuss this with your child. This could mean that you cover the cost of their housing for the first year, their textbooks or their tuition.
- Help your child with a budget
One of the best ways to reduce any debt is sticking to a budget and not spend more than you can afford. Before your child heads off to college or university, our LIT’s recommend that you work with them to create a budget they can reasonably stick to and afford as well as making them understand the importance of respecting that budget to avoid gaining unnecessary debts. You can also recommend apps to help them track their expenses and stay on budget. Budgeting smartphone apps like Mint and Wally are easy to use apps.
- Encourage your child to work part-time
Encouraging your child to find a part-time job during school is another way to help them avoid gaining more debts. Working part-time will not only generate some income to help cover some of the costs of their education, but it could also mean developing invaluable workplace skills and connections.
- Share helpful lessons and resources
Finally, another way to help your child deal with student debt is to share with them important financial lessons you’ve learned throughout the years. From the mistakes to the smart financial choices you made as a young adult, these stories will help provide them with some perspective.
There are many ways you can help your child with their postsecondary costs and debts. As mentioned by our LIT’s, there are many helpful resources available online including Budgeting for Student Life from the Government of Canada in addition to blog articles from young personal finance bloggers, like Krystal Yee from Give Me Back My Five Bucks, who has gone through paying for school and student debt.
How do you plan to help your kids with the cost of post-secondary education and student debt (without footing the bill)?