Post-secondary education is hard enough without creditors getting involved.

So how can students — who in many cases are dealing with tuition fees, government loans, living expenses and one or more part-time jobs, in addition to classes — avoid the debt trap that has snared so many of their peers?

Whether avoiding debt or climbing out of it, the strategies are the same, says Julie Jaggernath, director of education at the Credit Counselling Society of Canada.

“Cut expenses, find a job, and pay things off,” she says.

Many students spend their money on small “discretionary expenses” such as food, she says, not realizing how it adds up.

Jaggernath advises making a budget. “Lay out your financial plan just as you would your schedule,” she says. “How much money do you have until the end of the term? Divide that by month, divide that by week, then keep it in a holding account and pay yourself like a business.”

Elena Jara, credit education co-ordinator with Credit Canada, advises students to avoid long-term contracts, including cellphone plans and car leases, because they never know where they will be in a year.

“Before you sign any contract, read it, and if you don’t understand it, do not sign,” she says.
If you are roped in, she says, “sometimes it’s better to pay to get out of a contract because, at the end of the day, it’s going to cost you more if you carry it for the next two or three years.”

Not surprisingly, Jaggernath and Jara both recommend credit counselling to those already in debt — though most schools have academic advisers and a financial aid department, Jaggernath says, and she encourages students to “use and abuse” them.

“Those folks on campus are an amazing resource,” she says, “and they would rather help ahead of time than have to find a crisis loan at the last minute.”

Jaggernath admits some money should be set aside for fun. “A coffee a week had better not kill you,” she says.

That said, students “need to take a look at their lifestyle and say, ‘You know what? I’m working for my long-term good, not my immediate gratification.’”

Visit www.creditcounsellingcanada.ca/member_agencies to find a non-profit credit counselling agency near you.