School’s Out, Time to Pay

Graduating school, whether it’s high school, College or University should be one of the most exciting times in your life. Post-secondary education is a milestone which should open doors to your new future. You spent years putting in hard work with late night study session, writing papers and finishing assignments and you should be proud. Now, as you’re walking up to accept your diploma to the applause of your friends and family, instead of celebrating, all you can think about is the task of paying off your student loans. According to the National Student Loan Centre, it takes an average of nine years for Canadian students to pay off their student loans. With the average student debt around $25,000, it is becoming more important to create a plan for repayment. It can be overwhelming to think about what you owe, to whom and how you’ll repay it while still having a life. We’ve put together some suggestions for your plan:

1. Determine Who You Owe You may not even know what you owe and when it is due. The first step in the process is to determine who you owe money to.
   
2. Read the Fine Print Some people are aware of the grace period when it comes to student loan repayment however the interest on the federal portion starts on day one of graduation.
   
3. Compare Interest Rates and Rank Loans Each student loan has a different interest rate and payment schedule. Be sure to compare all the loans and the fine details to determine which loan to start with. Obviously start with the one with the highest interest rate.
   
4. Create a Budget It’s easier than you think; it’s not as scary as it sounds. Go through all your accounts and look for regular expenses. Go six months back at a minimum to ensure you capture quarterly payments. From there you can map out monthly, quarterly and annual bills to give you a clear indication of what you have left to spend and what you can put towards your debts.
   
5. Pay Yourself First Once you have secured employment, review your budget again and slide that debt payment up. Most students don’t make adjustments to their repayment plan in relation to their income. For bonuses and tax returns, as tempting as it is to spend it, you are better off making a lump sum repayment.

Long story short, repaying debt takes sacrifice and compromise. In order to retain your sanity and life quality, decide what you can and can’t live with and be reasonable with yourself. Chip away at it and celebrate your successes instead of wallowing. Don’t be afraid to ask for help, from your family or reach out to us. We’d love to help.

So you’re getting married?

You’ve found “the one” and have decided you will spend the rest of your lives together. You may have talked about growing your family, a new house and other plans for the future but have you thought about how you will achieve those goals? Marriage is a partnership and you need to know how you can achieve those goals together. Discussing your finances may not be a conversation that you want to have but it is necessary to avoid issues that may arise later. Debt, for example is one of the most important things a couple should discuss. Do you or your partner have any outstanding debt? If yes, does your partner know about it? Are you aware of each other’s income? Whatever the case may be, you need to communicate with each other and be open about your finances. A recent BMO survey shows that most married Canadians wish they had discussed their financial matters with each other before walking down the aisle. While 98% of Canadians agree they should be on the same page as their spouses, when it comes to finances, most of them aren’t! A whopping 40% of these couples say they have different investing styles from their partners. It’s not surprising then, that more than half of Canadian married couples have financial regrets, with 62% saying they wish they had discussed their financial plans and pasts before getting married. Use our Marriage Preparation Checklist to discuss with your partner to ensure your plans for wedded bliss include financial matters. For help with your financial planning, give us a call.