Did you read Part 1? Did you take a stab at assessing your income and expenses? Did you draft your budget and cash flow statement? No worries if not, see the steps listed and an example to review.

1) Current savings and expected monthly income
2) Expenses paid and expenses you expect to pay (monthly and chunk payments)
3) Take a look at the difference

Lily is 20 years old and returning for her second year of post-secondary education. She spent the summer living at home with her parents and working in the service industry.

1: Lily worked 30 hours per week (4 shifts) and earned tips in addition to her wage. She earned an average of $2,500 each month and saved $8,000 over the 4 months. She plans to find a part time job for 8 hours per week earning at least $12 per hour. This will bring in approximately $400 per month during school = 8 * $400 = $4,800 over the school year.

Total savings and income = $12,800

2: Tuition & Books – She expects her tuition to cost $4,500 and books $400 for the year. Total = $4,900
Living – She’s sharing a 2 bedroom basement suite and will pay rent + utilities of $800 per month. Per month her bus pass is $50, food $200, phone and share of Internet $100, insurance $10 and entertainment/gifts/grooming $300. Her monthly expenses are $1460 x 8 months = $11,680

Total expenses = $16,580

3: The difference is $12,800 – $16,580 = $3,780

It may not seem like much money but Lily borrows the money now she will have payments to make upon graduation. 1 year of $375 per month to rid of it or slightly less for much longer. Doesn’t seem like a high price to pay however when you’re finished school and trying to get started it is much easier on the wallet if you can avoid student loan payments. All your expenses will increase and finding a job may take longer than planned.

Lily has a couple options to explore. Check with family to see if there is any financial support (she’s done a great job on earning what she can, designed a realistic budget and kept her expenses as low as possible), apply for scholarships &/or bursaries and ask her employer for any extra shifts over holidays or when she is able to do the work.