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How to Plan Now to Avoid Student Debt Later

The cost of post-secondary education in Alberta isn’t going down anytime soon, and for many Canadians in their 20s that means graduating with a large student debt load.

Compared to other provinces, Alberta’s tuition fees run middle of the pack, but that’s no consolation for students who are saddled with debt before beginning their careers.

So, how can parents help their high-school-aged kids prepare for that reality?

Now is the time, as their kids are preparing to go back to high school classes, for parents to talk to them about important topics like minimizing debt, accumulating savings, and making informed decisions with their money.

  1. Teach your teen about the realities of dealing with debt and money

Financial literacy is incredibly important. Some provinces have even begun to integrate personal finance lessons into the school curriculum. This is a great step, but these lessons can extend beyond the classroom. Parents have many opportunities in everyday life to teach their kids about money and debt management. For example, here’s a simple, timely, money lesson for your teen:

Help them research the cost of all the items they think they’ll need in a year or two before heading off to their first year of college or university. After they have a final estimate, plug that number into an online debt calculator like this one to figure out how long it could take to pay off those expenses if they were to use a high-interest credit card rather than cash.

A high school student with a credit card might not be the norm, but it’s not unheard of either. If your teen is an authorized user on your credit card, they should understand the responsibilities and possible repercussions that come with having a credit card.

Even if you don’t need to rely on credit to cover university expenses, the total cost can have a dramatic impact on a personal or family budget.

This lesson might help them re-evaluate what is a need versus a want, and why it’s important to start saving now to help keep their debt load down while in school.

  1. Encourage them to get a part-time job in high school

Working part-time can help a teen develop a strong work ethic, increase their interpersonal skills and learn how to manage their time and money.

The savings from a part-time job may not remove the need to take on student debt in university, but that money can go a long way towards paying for extra expenses such as classroom supplies and discretionary spending.

  1. Include your teen in back-to-school planning

This is another great money lesson for teens. If your child is planning to pay for some of their own back-to-school supplies, talk to them about wants vs needs and the need to keep track of their spending.

If parents are covering the back-to-school costs, include teens in the budgeting process. Create a spending plan and shopping strategy together. Getting a head start on back-to-school shopping, dialing in on seasonal sales, and spreading out purchases over a few months can help alleviate the need to use credit and/or increase your debt load.

Bottom line: for both teens and their parents, ongoing efforts to improve financial literacy in the high school years can prove to be one of the best ways to reduce the student debt load in university.

Personal finance blogger Eva Baker offers some great tips for university-bound teens in her blog 15 Ways to Save Money in College on

On her Mo’ Money Podcast, personal finance expert Jessica Moorhouse interviews a university student, who shares her tips for How to Graduate University with Almost Zero Debt.

Know someone heading off to college or university in September? Share this blog with them or join the conversation on Twitter using #CollegeReady, #BackToSchool, or #DebtSolutions.

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