Overrunning your budget is common among students regardless of their
TORONTO, Aug. 24, 2015 /CNW/ - With the new school year coming up fast,
a new CIBC (TSX: CM) (NYSE: CM) poll finds that more than half (51 per cent) of post-secondary students tapped their parents for additional
financial support while at school last year because they ran out of
Key findings of the poll include:
51 per cent of parents with children pursuing a post-secondary education say their
children have asked for additional financial support or assistance last
school year because they ran out of money.
86 per cent of parents believe they are good role models when it comes to financial
"Some children are treating their parents as their personal ATM," says
Sarah Widmeyer, Managing Director and Head of Wealth Advisory Services,
CIBC. "But they need to understand that mom and dad may not always be
willing or able to dispense extra cash. Teaching children basic
financial and budgeting skills before they go off to college or
university is essential."
"Clearly, being a good financial role model doesn't mean your children
will understand how to manage their own finances," she adds. "That's
why it is so important to teach them the importance of balancing a
budget in their early teens because it's a much a tougher lesson to
learn when they are off living on their own for the first time in their
Having the talk: What parents can do to initiate the conversation
The poll results show that overrunning a budget is common with students
from all financial backgrounds:
Students from families with a household income of less than $75,000
demonstrated a similar lack of budgeting skills (52 per cent asked for money) as those from families with an above-average household
income of more than $125,000 (48 per cent asked for money).
Ms. Widmeyer suggests parents be proactive and make time to discuss
finances with their children. "It is important that children understand
what happens if they run out of money or into other financial problems
before they go off to school as opposed to after it happens."
Parents should make sure their children understand that there may be
unforeseen events in life that result in financial challenges, adds Ms.
Widmeyer. But they should also raise the expectation that if their kids
do call in for more money, they should be prepared to share their
expense tracking to demonstrate they can account for their spending.
"If your children ask you for more money, you should sit down with them
and create a budget that shows how they plan to use the extra funds and
how they plan to manage for the remainder of the school year."
A great way to ensure children grow up to be financially literate is to
involve them in the family's financial matters early on. This could be
planning a vacation budget, paying monthly bills, or reviewing a credit
card statement together.
Off to school soon? Five tips for students to successfully manage their
For those students either starting or returning to school next month,
Ms. Widmeyer offers advice on how to successfully manage their personal
finances away from home:
Distinguish between needs and wants: Are you spending your money on things you need - such as food and
housing or tuition and textbooks - or on things you want - like pizza,
beer, the latest smartphone or tickets to a concert? If your funds are
limited, make sure you fully cover your necessary expenses first and
prioritize your non-essential expenses.
Draw a budget: Itemize your monthly expenses and add your total monthly income,
including any loans, scholarships or money earned from part-time jobs.
This will provide you with a clear picture of where your money is
going. Make sure your budget is balanced by either reducing expenses or
securing additional sources of income. Many financial institutions such
as CIBC provide a free student budget calculator that will help you put together a budget.
Manage your cash flow: Simply said - you cannot spend more than you have. Checking expenses
against the amounts reserved in your budget and sticking to them will
help you avoid overspending and getting into debt.
Borrow responsibly: Using a credit card will give you more payment options and added
financial flexibility. However, a credit card isn't free money and you
should charge only what you can afford to pay back. Reduce your credit
limit to a low level to keep yourself from spending money you don't
Start building credit: Paying back bills, such as your credit card or cell phone bills, in a
timely manner will help you establish a good credit history. A good
credit history is important once you apply for any type of loan, such
as a car loan or a mortgage.
"Starting school can be an exciting experience, but at times be
daunting. Being responsible for your finances for the first time may
add extra stress," says Ms. Widmeyer. "With some basic financial skills
and a proper budget, students can manage their finances successfully
and get a head start into their adult life."
Key Poll Findings:
Percentage of Canadian parents who have saved or are currently saving
for their children's post-secondary education:
Percentage of Canadian parents who have been asked by their children for
additional financial support last school year:
Household income of those who were asked for more money:
Percentage of Canadian parents who consider themselves a good role model
for their children when it comes to financial planning:
From August 13 to August 17, 2015, an online survey was conducted among
1,001 Canadian parents who are Angus Reid Forum panelists. The margin
of error - which measures sampling variability - is +/- 3.1 per cent,
19 times out of 20. Discrepancies in or between totals are due to
CIBC is a leading Canadian-based global financial institution with 11
million personal banking and business clients. Through our three major
business units - Retail and Business Banking, Wealth Management and
Wholesale Banking - CIBC offers a full range of products and services
through its comprehensive electronic banking network, branches and
offices across Canada with offices in the United States and around the
world. You can find other news releases and information about CIBC on
our corporate website at www.cibc.com/ca/media-centre/.
For further information:
Caroline Van Hasselt, Director, External Communications, at 416-784-6699 or