Capital One survey finds students concerned about lack of funds,
but making basic financial mistakes that cost them cash
TORONTO, Aug. 21 /CNW Telbec/ - Most Canadian post-secondary students are
working hard this summer - with nearly 80 percent (79.7 percent) taking on
summer jobs - and the majority (71 percent) planning to use their hard-earned
cash to help pay for living expenses and tuition in the coming school year.
However, according to Capital One Canada's back-to-school survey, nearly
60 percent of the students surveyed (59.6 percent) are still worried about
having enough money to last them through the school year. In fact, some
students said they make some big (and surprising) sacrifices to get by:
- Fifty-three percent said they dip in to savings to cover every day
- Thirty-six percent said they skip meals to save money
- Twenty-four percent said they forego medication, dental visits or other
- Eleven percent said they sometimes wear dirty clothes when they can't
afford a visit to the laundromat
Despite the worries about not having sufficient cash to cover school year
expenses, the survey revealed that many students are not using basic money
management skills to help make ends meet. More than half (51 percent) of
students do not develop a budget and stick to it, and forty percent do not
track their daily purchases. The survey also showed that saving their summer
earnings is not a priority. Forty-six percent of students are saving less than
half of their summer earnings for the upcoming school year, and more than one
in ten (12.8 percent) are not saving any of their summer earnings at all.
"Going to college and university is a stressful time, and worrying about
your finances on top of your studies can add another incredible burden to
students. That's why it is more important than ever for young people to learn
the basics about money, budget management, and the difference between needs
versus wants," said Laurel Ostfield, spokesperson for Capital One Canada. "Our
survey reveals that some of the most basic money management techniques are not
being used by students, such as developing a budget, tracking your expenses
and having the discipline to stay within your budget limit."
Daily expenses take a toll, with students reporting that they generally
overspend on restaurants (45.2 percent), groceries (44.4 percent), alcohol
(32.9 percent), clothes (32.7 percent), and transportation (25.18 percent).
While economic challenges, like higher gasoline and food prices, may be
compounding students' financial woes, the survey also indicates that many
students are making some financial mistakes that can be costly. For example:
- Eighty-two (82) percent of students do not review their credit score
- Fifty-three (53) percent of students dip into savings to cover everyday
- Thirty-nine (39) percent of students do not pay more than the minimum
amount on loans every month.
- Fifteen (15) percent of students do not make their payments on time
- Sixteen (16) percent of students exceed their credit limit.
- Seventeen (17) percent of students borrow money to pay off another debt
Students may not be the only ones to blame. Half of the students surveyed
(50.4 percent) said they learned how to manage their finances from their
parents, while only 1.8 percent said that they learned about financial
management at school. Just over forty percent (41.2 percent) said they taught
themselves how to manage their finances.
"We have students who come to us for credit counseling services on a
regular basis. Unfortunately, by the time they come to see us, they are
usually deep into debt and creditors are knocking at their door," says
Elena Jara, creditor relations specialist and education coordinator for Credit
Canada. "This time of year is a great time to sit down with your children and
discuss finances. Teens are eager to learn about money management and they
want to learn about it from their parents."
After all, what is the first thing that students do when they run out of
money during the school year? Ask their parents of course. Almost twice as
many students (43.4 percent) would rather ask their parents than get a job
Money Management Tips
To help you stay fiscally fit, Capital One offers the following advice to
- Develop a budget and stick to it. A budget is an important first step
to successful financial management. It will help you to organize your
finances and set parameters on your spending.
- Keep track of your daily purchases - Knowing what you spend every day
will help you stay within your budget limits.
- Know your credit score and review it at least once a year. This score
is used by lenders, landlords and potential employers to assess your
financial integrity. Obtain a copy of your credit score for a minimal
fee by contacting TransUnion (www.transunion.ca) or Equifax
- Pay more than the minimum due. When you can, try to pay more than the
minimum balance due on your credit card bill every month.
- Make your payments on time. Pay close attention to the due date for
your payments since a history of late payments will affect your credit
- Shop around to find the credit card that best meets your financial
needs. Comparison shopping can save you money and may even provide you
with valuable rewards.
Do NOT ...
- Pay bills late.
- Borrow money to pay off another debt or loan.
- Obtain a new credit card to pay off an old one.
- Dip into your savings to cover everyday expenses.
(Source: Capital One Canada. For more tips and advice, visit
For the Canadian Back to School Study. Braun Research was engaged to
conduct 502 interviews with men and women throughout Canada who are
18-25 years of age and were planning to attend post secondary school in the
fall. All respondents were emailed using a random sample of panelists. Surveys
were conducted online from July 18th - July 25th, 2008. The margin of error
for the study is plus or minus 4.4 percentage points. Interviews were verified
under separate email to determine truthful screening.
Sampling for this study was conducted using a panel of pre-selected,
opted-in Canadian residents between the ages of 18 and 25 who were screened
whether or not they were college bound this coming fall. All interviews were
conducted using Braun Research's proprietary online software.
Statistical weights were designed from statistics from the Ministry of
Education www.edu.gov.on.ca/eng and the Canadian National Census
About Capital One
Located in Toronto, Ontario, Capital One has offered Canadian consumers a
range of competitive MasterCard(R) credit cards since 1996, when the company
first introduced the Platinum MasterCard(R) in Canada. Capital One Canada is a
division of Capital One Bank, a subsidiary of Capital One Financial
Corporation of McLean, Virginia (NYSE: COF)
For further information:
For further information: Laurel Ostfield, (416) 549-2753,