It can be a period of firsts for students graduating high school, including their first time living away from home and attending college or university. But what many students aren’t prepared for is the first time they have to manage their own finances.

A survey of Ontario students aged 14 to 18 conducted by the Investor Education Fund, an Ontario Securities Commission initiative to help people properly use financial information, found that less than half of those surveyed knew how to create a budget, and just 38 per cent felt prepared to manage their money after high school.

“Money management skills directly affect a person’s ability to meet financial needs in the future,” said Perry Quinton, the fund’s Toronto-based vice-president. So, whether it’s buying a home, vehicle or business in the future, poor financial decisions today can compromise those abilities tomorrow. “When you’re at this stage, the money’s there and it’s about spending it. You don’t really think of the long-term consequences,” she said.

And while post-secondary students popularly enter debt because of student loans and credit cards, Murray Baker believes it is possible to graduate in the black.

For students to balance their budgets, the Vancouver-based author of The Debt-Free Graduate recommends creating a “road­ map” for the year, detailing when they will receive income from student loans, savings and summer jobs.

“You can look ahead and say, ‘It looks like I’m going to be short this month.’ Then you can take steps ahead of time,” he said. “That leaves it a lot less stressful for students and gives them time to focus on their academics.”

For students who must borrow money to cover expenses, Murray suggests considering a credit card only as a last resort, and obtaining student loans first. “Student loans are the best option, not only because the interest rate is regulated by the government, but if you run into difficulty paying off the loan later on, there are a lot of mechanisms for student relief.”

But credit cards can help students with those aforementioned long-term goals, said Elena Jara, education co-ordinator for non-profit credit counselling agency Credit Canada. However, she suggests starting small so students aren’t tempted to get too deep into debt and generate an adverse effect.

“If they’re working part time and get a credit card with a very small credit limit — maybe $300 to $500 — this will allow them to, within time, build a credit rating and learn to manage that credit card well.”