Gap years are a terrific experience if you build in money management skills.
I’m a huge fan of gap years for high school graduates. Many parents worry that kids who take a break before going to college or university will come to love the freedom too much to hit the books again.
I say, don’t fret. Why? Two words — minimum wage. It takes only a few months for your young adult to grasp the idea that bottom of the barrel income is the norm for those with only a high school diploma.
It’s more important than ever before for young adults to develop money management skills. The 2011 TD Canada Trust Student Finances survey discovered that 58 per cent of post-secondary students are anxious and stressed about their finances.
A gap year is a great way to build financial skills, while setting money aside to reduce reliance on student loans and lines of credit during post-secondary studies at the same time.
Another benefit is that the money saved might mean less need for a part-time job during the school year. Work is a great learning experience but it can also detract from academics and campus life.
his is what the bottom line looks like for a 35-hour week (one full-time or two part-time jobs) at or close to minimum wage for 50 weeks. I’ve used $10 an hour, though the provincial rates vary from $8.80 in Alberta to $10.25 in Ontario. This amounts to $8,750 in savings; $4,375 for personal spending, and $4,375 for food and rent.
With the youth unemployment rate ranging from nearly 15 per cent to more than 20 per cent, it can be difficult for young adults to find full-time work. Even so, help your gap year youngster develop a basic plan for whatever is earned and the savings will be appreciated down the road.