Getting your questions answered around financial topics can be hard. With that in mind, our team has put together a list of common questions and answers to help you. If you have any questions, or want more advice on your specific situation, you can always make an appointment with one of our Credit Counselors.
- Why do I need a budget?
- How do I make a budget?
- What should my budget include?
- What are reasonable costs for expenses?
- How do I use a budget to save money?
- How can I save money on housing?
- How can I save money on utility costs?
- How do I find a place to live in London, Ontario?
- What do I do if my landlord did something illegal?
- How can I save money on my banking?
- What is the difference between a TFSA and a RRSP?
- What discount programs can save me money?
- How do I effectively use credit?
- How can I get help filing my taxes?
- Which of my school related expenses are deductible?
- How can I save money on medical costs and assistive devices?
- What is OSAP and how does it work with free tuition?
- What do I do if I don’t spend all my OSAP?
- Where can I get help managing my debt?
- How much are my loans costing me?
- What do I do if I can’t find work?
Budgeting is important because it helps you plan how to spend your money, set goals and track your progress towards them. If you find yourself relying on debt to get through the month, a budget can help you balance what you earn and what you spend.
Budgets are especially helpful if:
- You’re struggling to get through the month with the money you make
- You want to pay off your debts
- You have variable income (you make a different amount of money throughout the year)
- You want to save money for a specific purchase, retirement, or an an emergency
- You stay up at night stressing about money
Remember, a budget isn’t about denying yourself– it’s about making decisions that will help you feel more secure and happy long-term.
You’ve decided you want to start on a budget– there are a couple easy ways to get started:
- Figure out how much money you make. Use your take-home pay for a safer estimate
- Start tracking your fixed expenses — things like rent, utilities, and tuition. Bank or credit card statements are a good place to start
- Start tracking your variable expenses– things like groceries and entertainment costs
- Think about your goals. Knowing what you’re saving for can be a great motivator.
- Look at your income and expenses and see how they balance out. If you’re spending more than you make, this is when you look at what things you can cut to put more money into debt repayment and savings
That’s all there is to it. You should take time once a month to check in with yourself, see how you’re doing, and adjust your plan as needed. No one makes a perfect plan the first time around, so don’t be afraid to make mistakes. If you need help getting started with your budget, or figuring out where you can cut back, you can always reach out to a Credit Counselor.
A budget can look different for everyone, but you should try to include as many categories of expenses as possible. Budgets are usually calculated based on monthly costs, and generally cover a year or more. There are plenty of great calculators online. A few good ones include You Can Deal With It, Government of Canada Calculator and Practical Money Skills.
For income, you should consider tracking:
- Your take-home pay (averaged over a month)
- Your partner’s take-home pay (averaged over a month)
- Any interest you make on your investments
- Any other regular sources of money
For expenses, you should consider tracking:
- Rent/ mortgage costs (don’t forget about property tax, insurance, and interest)
- Utility costs (gas, telephone, cable, electricity, water, and internet)
- Transportation costs (if you have a car, that means your lease, insurance, gas, maintenance and parking)
- Credit cards costs (if you don’t pay off your whole bill each month, you’ll want to track what you do pay)
- Education costs (tuition, books, and fees)
- Entertainment costs (movies, concerts, books, games, and eating out)
- Food costs (food, and cooking supplies)
- Medical costs (procedures, medications, and health insurance premiums)
- Miscellaneous costs (anything that doesn’t fit into any other category above, like a music subscription)
There’s a lot of debate on what things should cost and what they do cost. A useful place to start is percentages. Though these should be taken with a grain of salt. For example, you might choose to live a more expensive place so you don’t need to commute.
That said, here is a good guide to get you started:
- Housing – 35%
- Food – 15%
- Transportation – 15%
- Debt replacement – 10%
- Savings – 8%
- Utilities – 5%
- Entertainment- 5%
- Clothing – 4%
- Medical – 3%
By cutting back on expenses today, you can start to save for the future. Based on your situation, it might be better to start savings or paying off debt first. If you have a low-interest rate, an emergency fund can be a great investment. But if you’re racking up credit card debt, it’s best to may that off first. Whatever your goal, there are many great calculators to help you see what’s the best way to save and pay off your debts. The Government of Canada, Debt.ca, or You Can Deal With It are all great places to start.
One of the best ways to cut down on housing costs is to live off-campus and consider less expensive areas of the city, and buildings with fewer amenities. If you’re willing to move into a new area of the city with lower housing costs, make sure to visit to area before you sign anything, and ensure you still have access to everything you need nearby. A good sense of the city’s bus routes is even more important if only one or two routes go by your prospective housing. As far as getting fewer amenities, know what you’re willing to compromise on– washers in a nearby building make a big difference compared to having to go to a laundromat.
That said, housing costs in London are notoriously high, and sometimes to amount of cutting back seems to help enough. In cases like this, it might be a good idea to look into social housing or co-op options. Co-ops allow you to play less rent in exchange for helping with the maintenance of your building. Social housing is rent that is geared to your income, and is ideal for anyone struggling with rent payments.
You can qualify for social housing if:
- You are 16 or older, and can live independently (if you need supportive living, check out these options instead)
- You are a Canadian citizen, landed immigrant or refugee
- No member of your household has a deportation order
- No member of your household owes rent or damage arrears to any social housing unit
If you’re interested in social housing, you can start your application on the City of London website. If you are looking for Aboriginal housing options, there are several options in the city. If you need emergency accommodations, you can reach out for support as well.
If you’re a low-income individual, there are several programs in the City of London built to help out with rising utility costs. The Housing Stability Bank is a great resource– with programs to support with rental assistance, emergency utility support as well as applications to the Ontario Electricity Support Programs, you an access up to two month’s rent, $500/ utility and lower your monthly electricity bill by $50 or more.
If you don’t need support through the application, you can apply for the Ontario Electricity Support Program yourself.
London has lots of options for housing– in the end, it all depends on what you’re looking for in living arrangements. Do you have a roommate in mind, do you need to find one, or will you live alone? If you plan to bus to school, you should check the routes near any potential apartment or house. The London Transit Commission has a great map of the city, to help you get a sense of what parts of the city will be easily accessible for you.
It’s also important to consider what other amenities you’ll need access to, like gyms, entertainment and food. Once you have that in mind, make a list of must-haves and nice-to-haves and use that as a place to start.
Once you’re ready to start checking out your options, you should consider if you want to live on or off campus. Whether you’re a Fanshawe or Western student, both schools provide lots of options for both. You can also use online aggregator sites, which pull together listings from across the internet. Some of our favourites are PadMapper, ViewIt and RentHello.
The Landlord and Tenant Board exists to resolve disagreements between landlords and tenants. There are guidelines on how much your rent can be raised in a year, how you can be evicted, why your application was rejected and to ensure there is heat, safety and privacy in your home. Neighborhood Legal Service of London and Middlesex specializes in support and mediation, and offer ‘duty counsel’, advice and information free of charge on your hearing dates.
Most financial institutions offer free banking to their student clients. Ratehub can help you compare plans and choose the best option for you. If you’re choosing a bank for the long-term, make sure to look at what regular plans look like, so you’re not getting charged additional fees when you’re done school.
The first step to effectively investing in either program is to understand what makes them the same and what makes them different. Both Wealthsimple and MoneySense have great breakdown on each plan that’s simple to understand. Generally (but not always) TFSAs are more flexible, which makes them ideal if you make a modest income. As you start your career and move out on your own for the first time, this is flexibility is especially important.
That said, the programs are very similar. It all comes down to if you want to lower your effective income come tax season. If you’re near the threshold for benefits, an investment in an RRSP can make sure you receive them. That said, when you take the money out, you’ll pay more taxes on it. The difficulty comes with predicting how much money you’ll make in the future.
As a student, you have access to prefered rates from hundreds of providers. From your cell phone bill, to groceries, transit and entertainment, the options are limitless. A few great lists for discount programs have been curated by GlobalNews and Interrobang.
Two other great cards you can apply for are the International Student Identity Card and the Student Price Card. Both programs come with an upfront cost, but depending on how much you use them, they can be greatly beneficial programs. Being a student also gets you great benefits from your school– make sure to look into gym members, medical coverage and transit passes.
The short answer is– credit is the way many groups determine how reliable we are, and thus, if they’re willing to work with us. But building good credit is hard, and if you don’t have it, you can look at difficulties getting a loan, or even an apartment. The trick to making credit work for you is to always pay off your bills in full, while still taking advantage of it’s benefits. But in reality, like happens, and sometimes those unexpected expenses add up to trouble.
If you’re looking to get started with less risk, or to rebuild your credit secured credit cards are a great idea. With secured cards, you’re borrowing based on money you’ve paid up-front, but you still make regular payments. If you don’t pay, they use this collateral to pay off your debts. It’s basically a safety net for you and the company that serves as a safe place to start.
If you have a standard credit card, or are applying for one, make sure to look at the interest rates. Many cards charge 19.99% or higher on purchases,and payday loans can be even more dramatic at a staggering 391% annually. Make the best decisions you can, based on your circumstances.
To the practical steps, to improve your credit, you should:
- Always make your payments on time. Even if you can pay more the next day, it’s better to make both separate payments than be late on one
- Don’t use too much of your credit each month– 30% is the ideal amount to use. So if you have a $1,000 limit, try to keep your balance at less than $300
- Don’t open too many accounts and keep older ones open (as long as there are no fees of balance). The average age of your credit matters
Check your credit score regularly. Borrowell lets you access your credit for free and will give you monthly updates.
If you are considered low-income and have a simple return, the Community Volunteer Income Tax Program (CVITP) is the best option for you to file your taxes. The are over 80 free clinics across London that will help you file your taxes and ensure you get all the benefits you’re entitled to. The Cross Cultural Learners Centre has a great list of the items you need to bring to your appointment.
The CRA maintains a list of open clinics across the city, but local libraries, churches, and community centres also host their own events throughout tax season. Most clinics run through tax season, from early March to the end of April. If you are owed taxes, being late isn’t as big of a deal, but you’ll be missing out of potentially significant benefits until you do file. If you missed tax season, there are two year-round tax clinics in London: Life*Spin and Compass Community Church.
With recent changes to the Ontario budget, the tuition and education tax credits in Ontario have been eliminated. As such, the tax benefits for students have been greatly reduced. There are still a few things you should consider, depending on your situation.
- If you worked this year, you are eligible for the Canada Employment amount
- If you paid for your transit pass, you can claim this amount
- If you paid interest on a student loan to Canada Student Loans, you can claim this
- If you have education tax credits from before 2017, you can claim them
- If you’re 19 or over, you are eligible for the GST/ HST credit
- If you moved more than 40 km for school, you may be eligible for moving expenses
- If you have a child under 16, you may be eligible for child care deductions
There are a couple government programs you’ll want to consider if you have medical or assistance device costs. The Assistive Devices Program is meant to help people with long-term physical disabilities who need customized equipment. You qualify for the program if you are an Ontario resident, have an OHIP card and have a disability requiring equipment or supplies for more than six months. This fund will help cover 75% of the cost of items. The Government of Canada provides a full list of medical and assistive devices that are included.
If you’re on Ontario Works, ODSP, or OHIP+, you are eligible for the Ontario Drug Benefit program to help with prescription expenses. If your expenses are especially high (3-4% or more of your after tax household income), you qualify for the Trillium Drug Program. You can find out that is covered on the Ontario.ca website. You have to apply for the program to be included, however.
Changes to OSAP are how Ontario has decided to support free tuition for low-income students. If you family makes less than $50,000 each year, you are eligible for free tuition. Even if you’re not low-income, you can benefit. If your family makes less than $83,000 in a year, you could see up to 30% off your tuition. Another benefit– if you have an RESP, that no longer takes money from the total OSAP funding to receive. Which is general, because free tuition doesn’t cover books, supplies, or housing costs. You can see how much funding you might be eligible for on the OSAP website.
Short answer: it’s up to you to decide how to use your OSAP funding. That said, the average cost of a full-time undergraduate degree is $24,000+ and regardless of what you do with your funding, you’re expected to pay back your loan once you’re done school (you do get a 6-month grace period as well).
If you’re especially savvy, there’s no reason you couldn’t invest your surplus OSAP funds and earn interest until that repayment period comes up. After your 6-month grace period is over however, your debt will increase with interest and it’s best to get that saved money working for you.
It depends on where your debt originated. If you have consumer debt, general steps to reducing your debt loan are:
- Identify your debts — total amount of debt, interest annually, late fees, etc
- Review or create a budget so that you are spending less than you make each month
- Decide how you want to approach the debt. Choose a timeframe, decide what to pay off first and work with your creditors for reduced interest or reduced payments
- Consolidate your debts from higher interest sources into a line of credit or a loan
- Avoid taking on more debt
- Reach out for help when you need it.
If you’re concerned about your OSAP payments, you can get repayment assistance based on your income, family size and outstanding loan amount. This estimator can help you see how much help you might be entitled to. If you received loans in 2016-2017, you cannot owe more than a set amount through the Ontario Student Opportunity Grant.
If your OSAP loan is in default, you can get help from Canada-Ontario Integrated Student Loans, Canada Student Loans and Ontario Student Loans. If you’re debating bankruptcy, you should know that your OSAP loan is still expected to be paid. If you need help getting paying back your debts, you can always reach out to a Credit Counselor for support.
To work out the cost of your debts, you need a few numbers:
- How much your loan is
- Your interest rate per year
- Your loan term
There are lots of great calculators, like this one from Bankrate.com that will do all the math for you. If you’re looking at a debt that doesn’t have a set term, you can compare based on different timeframes.
There are a few good places to start looking for employment support in London. College Boreal, Goodwill Industries, Leads Employment Services, London Employment Help Centre, Nokee Kwe and WIL Employment Connections are all great options. If you’re a youth, you can reach out to Youth Opportunities Unlimited (YOU), to receive assessments, action planning support and pre-employment prep.
If you’re finding employment hard to find, it’s never a bad idea to look into Ontario Works. The program exists for short-term support with food, shelter, housing and more, as well as helping with employment. Although it’s harder to be approved for, if you have a disability, the Ontario Disability Support Program (ODSP) is a longer term solution and offers a larger monthly cheque.