January 26, 2010 Features

Staying Out Of The Red

Get more for your dollar—and less on your bill—with these tips

by Chris Hanna

Keep some cash, start a budget. GRAPHIC CATHERINE VALLIERES

January brings more than simply a new year of resolutions to lose weight or quit smoking—it also brings debt.

Canadians were expected to spend an average of $891 on gifts alone in December, according to a Scotiabank survey. For students in particular, splurging in December may mean struggling to make ends meet come January.

Whether you spent all your savings or used your credit cards and are grimly waiting for your statement, when you factor in looming tuition fees and textbooks, the debt may seem insurmountable.

But no need to fret: The Link is here to help.

Cash—Dough—Moolah

There are many words for money, few ways for a student to make some legitimately and a million reasons to spend it. Whether your folks are helping out or you’re providing for yourself, you should start budgeting by keeping a log of what’s coming in and what’s going out.

“If you’re not working and earning some money, now’s the time to start,” said Harold Simpkins, a senior marketing lecturer at Concordia’s John Molson School of Business. “If you are working and have an income, budget every expense and stick with your budget.”
This may be easier said than done, but limiting yourself to spending less than you make every month makes a world of difference.

Here’s a tip: if you can have two bank accounts, do it! Sneak some money into one every week and pretend it doesn’t exist. This can be used for incidentals and other things you can’t plan for as well as back-up when the going gets tough.

Coffee and a Big Mac is NOT a meal

We students are notorious caffeine addicts, and the two-or-so dollars spent on coffee every day really adds up at the end of the month.

According to Arshad Ahmad, a JMSB associate professor, not spending $3 on coffee or energy drinks every day results in “savings that can easily amount to $1 million at retirement—assuming you are a young student.”

If you can’t kick the caffeine habit, make coffee at home and carry it in a reusable mug. One pound of coffee (readily available at grocery stores or even your favourite coffee shops like Starbucks and Tim Hortons) makes about 45 cups, depending on how strong you like your joe. A pound costs in the $15 range, which means your cup of coffee costs you less than 35 cents.

Similarly, start thinking about brown bagging a lunch or packing light snacks to munch on between classes. Healthy cheap meals are not so easy to find downtown.

Unless, that is, you happen to dine at The People’s Potato on the seventh floor of Concordia’s Hall Building, which offers students free/pay-what-you-can four course vegan meals. They operate Monday through Friday and start giving out food at 12:30 p.m. You pay 37 cents per credit in fee levies to The People’s Potato, so you might as well get something out of it. Bring your own Tupperware and you’ll enjoy the speed of the Tupperware-only line.

Not only is it free, but the meals are diverse and the Potato truly is socially responsible. Gustavo Rodriguez, a volunteer at The People’s Potato of over two years, says the kitchen keeps a log and aims not to repeat the meals in any given week.

Through the Potato, you can order food baskets filled with fresh veggies at cost price—which is very helpful for those with growing grocery bills. The kitchen also aims to educate students about food and sustainability, so check the bulletin board outside the kitchen regularly for seminars on cooking and food politics.

Hit the books

There is a cheaper way to buy textbooks—and not just some photocopies from a guy in his basement. Amazon.ca is your sure way to save money on those wretched things that you’ll only use three times a term. Their books are nearly always less expensive than the Concordia bookstore—check out the prices we compared.

And when you’re finished, sell ‘em back with the other things collecting dust on your shelves—books, CDs, DVDs—on the Amazon Marketplace for a small fee. That’s a good way to fund next term’s textbook budget, too.

Ditch your ride or ride a bike

To many of us students this is a no-brainer, but another way to save some dough and get to know your fellow Montrealer—regardless of how crazy, chatty or smelly they may be—is by using public transit. A discounted student Opus card will set you back $38.75 a month if you live on Montreal Island and $89 if you don’t, but the key is taking transit on the regular (that means weekends and days you don’t have school, too).

Vices and good times

Biting our nails or pen caps isn’t nearly as tough on our wallets as some of the things we students are addicted to.

“Way back in my days as a student, many of us spent excessively on alcohol and tobacco,” admitted Simpkins. “Consumption of these less-than-healthy products has dropped dramatically, [...] but to those who still imbibe [should] cut back or quit. You’ll live longer and feel better.”

Then there are those pesky gadgets. Why do we insist on having both an iPod and a phone that plays music? The thought of giving up a phone with e-mail, Internet, music and weather alerts may be unfathomable, but Simpkins attests that “less dependence on handhelds results in less spending on them.” This makes the cost of your iPhone or Crackberry’s data package all the more real.

If you are seriously in debt, this should be obvious: going out for drinks, dinner or dancing a couple of times each week is financially straining. If it seems unreasonable for you to cancel these types of social gatherings altogether, limit them.

Better yet, entertain your guests at your place; you don’t have to use coat check, the bar doesn’t have a last call and the drinks aren’t ridiculously marked up. One night out can be substituted by two nights in at least.

Not-so-fantastic plastic

These plastic cards might have been your best friend and your weapon of choice during the holidays, but your relationship is likely to turn sour come payment time.

According to the Financial Consumer Agency of Canada, 41 per cent of cardholders are unaware of how much the interest rates on their cards are. While most average around 20 per cent per year, some department store and speciality cards range in the 30 per cent rate.
If you are going to use your card, make sure you can pay them in full. The minimum payments that credit card companies suggest on your statement each month can mean you will inevitably pay more in interest.

Ahmad also suggests improving your “financial literacy” by getting informed and learning “the language used by bankers and credit card companies.”

Here’s a scenario: you actually spent $891 on your credit card last month. If you make the minimum contributions to your debt—paying the minimum $20 every month, while they charge 20 per cent interest—you will be paying off this debt for the next 83 months. In the meantime, you will have racked up $750 in interest (assuming you didn’t use your credit card for anything else).

Budgeting and using your debit card instead of credit are sure ways to have some extra cash on you in 2010. By knowing how much money you have coming in, you can know how much (or how little) to spend. Using your debit card also means you only spend money you already have. This eliminates the fear of receiving a shocking credit card statement you won’t be able to repay.

So, forego your daily macchiato and cheeseburger and take a look at the money you’ve spared.

Don’t forget that the 2009-10 winter tuition fee payment deadline is Jan. 31 at 11:59 p.m. Pay it up, or a $75 penalty fee—plus interest—will be charged to your student account.