Do mom and dad know best? Depends on who you ask
TORONTO, July 22, 2014 /CNW/ - Parents know less about their child's
spending during university or college than they may think, according to
the latest 2014 RBC Student Finances Poll. While nine out of 10 parents (90 per cent) say they know roughly how much debt their child
has, only 78 per cent of students agree. More than half of students (55
per cent) say they've sometimes hidden how much they spend from their
parents, but only about one-third (33 per cent) of parents believe
their child has sometimes hidden how they are spending.
A large majority (76 per cent) of students say they are confident in
their ability to manage their finances, but many students (87 per cent)
believe they still have a lot to learn. And while 89 per cent of
parents believe they've been a good financial role model, fewer
students (80 per cent) believe that to be true.
"We meet with students and parents throughout the year, and whether
first year, third year or planning ahead, we want to know: have parents
and students had 'the talk?'" said Melissa Jarman, director, Student
Banking, RBC. "The financial talk is not always easy, but it needs to
happen. Investing in education is often spread over a number of
stakeholders, including parents, so there needs to be an open
discussion about where the money to fund that education is coming from,
who's responsible for how much, and when. Once the foundation is set,
parents and students need to continue the dialogue and cover advice for
responsible spending to make sure the funds last throughout the school
year. A conversation with a financial advisor about a clearly defined
budget or plan can also be a great idea, to help ensure that finances
remain a priority."
The talk can also help alleviate worry and stress. Sometimes experience
counts, and mom or dad may know best. According to the poll, parents
are much less likely to believe their child is worried about having enough money to cover expenses (57 per cent versus 71 per
cent of students). Students are also more anxious about taking on debt
than their parents think they are (69 per cent versus 60 per cent of
"Between acceptance letters, picking my courses and planning for school,
I was already so overwhelmed with decisions. The next looming decision
was, 'how do I pay for this?'" said Alex Ho from Milton, Ontario. "I
sat down with my parents to have the talk - how can I make this a
reality? From there, I knew I had some financial support, but more
importantly, I had a path in front of me. Part of that path led me to
our RBC financial advisor who helped me make a plan to see me through
my time at school."
Jarman added: "We know students have a lot more anxiety than parents
might think when it comes to their finances surrounding post-secondary
school. To help reduce stress, parents and students need to speak
openly about finances and look at what options are available. Parents
and students alike need some peace of mind so students can focus on
education, and not let financial worries wear them down."
Here are some tips for students as they prepare for "the talk" this
Make a budget, and revisit it often: Preparing a budget is the best way to stay in good financial shape when
you are away at school. There are a number of online tracking tools
that are available, including RBC's myFinanceTracker, which
automatically keeps track of your spending so you can easily see if
you're sticking to your budget.
Do your research: Check online sources to see if you qualify for free money that you don't
have to pay back; like scholarships, bursaries, or grants. A bit of
research could save you thousands of dollars.
Only borrow what you have to: Your budget will include all the money that you have for education,
like savings, RESPs and scholarships. Compare that to the total cost of
school, both hard and discretionary costs, and only borrow what you
need to fill in the gap.
Take advantage of your student status: Ask for student discounts anywhere you go: hair salon, retailers and
most restaurants around campus. Do you need your own car or can you
take advantage of public transit? Can you rent your textbooks or buy
used from your campus bookstore? Can you change your mobile plan to
ensure you're only paying for what you need?
About RBC's financial planning advice, resources and interactive tools
RBC's Advice Centre offers advice and tools for students. Interactive tools and calculators
provide customized information covering many facets of personal
finance, including the Student Budget Calculator and the Debt Reduction Plan. With the guidance of RBC advisors who are available to chat live,
Canadians have access to free, no-obligation professional advice about
RBC products and services and personalized one-on-one service. Further
information is available at rbcadvicecentre.com. In addition, RBC's myFinanceTracker, a comprehensive online financial management tool, offers all personal
RBC online banking clients the ability, at no cost, to create a set budget and track their
spending habits. As well, RBC Virtual Visa Debit enables clients to pay for online, over the phone, or mail order
purchases with funds directly from their bank account.
About RBC Student Finances Poll 2014
The 2014 RBC Student Finances Poll was conducted by Ipsos Reid through a
national online survey of 1,180 students aged 17 to 24 (as of September
2014) and of 971 parents of students in post-secondary school (as of
September 2014). Data were collected from June 6 to June 20, 2014. The
results are based on a sample where quota sampling and weighting are
employed to balance demographics and ensure that the sample's
composition reflects that of the actual Canadian student population
according to Census data. Quota samples with weighting from the Ipsos
online panel provide results that are intended to approximate a
probability sample. An unweighted, probability sample of this size,
with 100 per cent response rate, would have an estimated margin of
error of ±3 percentage points, 19 times out of 20. All sample surveys
and polls may be subject to other sources of error, including, but not
limited to, coverage error and measurement error.
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For further information:
Ciaran Dickson, RBC Communications, 647-625-2763
Jill Anzarut, RBC Communications, 647-534-5118