Saving for School by Gail Vaz-Oxlade

Gail Vaz-Oxlade is a Canadian personal finance guru. She was the host of television shows “Til Debt do us Part” and “Princess”, which is where I first learned some of her lessons. I am actually super passionate about both personal finance and national debt / state budgets, but I took a break from reading non-fiction because I went back to school around the time that I started this blog. I’m looking forward to reading more for learning over the next little bit, now that I don’t have to focus on boring old text books!

saving for school

I LOVE this book. It is perfect because it is super easy to read. Let’s face it – books about money can be intimidating to read. The average person worries that they won’t be able to understand it, or that they will be faced with some hard truths … maybe that they’ve messed up so bad they won’t ever be able to sort it out or that they are going to have to make big changes to create the future they want.

It’s easy to put aside for “later” and never really get into it. Don’t do that!

“Saving for School” is short and sweet. The book itself is small, like the size of a Harlequin Romance paperback. And it is only 84 pages. I read it in a couple of hours … in the same room where my parents and sister were talking and my nephew was (loudly!) watching soccer. There were a lot of distractions around. I promise you can get through it too.

Gail has a way of writing as if she is sitting down next to you explaining. Her books don’t come across as academic or “lectury” to me. It could be a friend or a parent trying to explain something, only with Gail, I’m sure it isn’t well-meant but completely inaccurate advice.

So who is “Saving for School” written for?

Anyone with an interest in post-secondary education. That could be a parent of a teenager or a pre-schooler, or someone planning to become pregnant.

It could be a grandparent, uncle, church leader, or the student himself (or herself).

I’ve already graduated from university, but even I found some tips to help me pay back my student loans in a way that reduces the interested that I pay, and how to do the calculations that will tell me how much interest I’ll pay based of different payment options.

Ideally though, the earlier you (parent/student) start planning for post-secondary expenses, the more prepared you will be, both in the knowledge of how to take advantage of the system and how much things cost, and in how much money you will have managed to squirrel away for tuition and other expenses.

“Saving for School” helps explain the ways to get free money from the government.

FREE MONEY FROM THE GOVERNMENT?!!! Is it possible?! Yes!!!

Truly. I’m not taking about OSAP, I’m talking about the Canadian Education Savings Grant money. You don’t have to pay it back. And you can earn interest on it in the mean-time. I did have an RESP from my parents, which covered the academic expenses for about one year of uni. But I didn’t have any idea of the CESG or whether my parents were able to take advantage of it or not. If a little bit of planning and strategic saving can give you $7200 (plus whatever interest you earn on that!) for each child’s education, you want to take advantage of it!

Other ways to save for university: apply for scholarships and bursaries. I’m not that smart (remember, I dropped out of school and it took me a while to go back … seriously, I’m not Harvard Med material over here) or that poor. I still got entrance scholarships that were renewable for each year, and bursaries. Apply even when you don’t think you will get anything. Easy money! You can apply directly to your university and to scholarship websites like… :

http://www.scholarshipscanada.com/

Scholarships, grants and bursaries for Canadian students

You can also make money by working during high-school and university, or borrow from a family member or the bank. Predictable response, I know. Sorry.

I like that Gail reminds the reader to make sure that a young adult goes off to university with lifeskills, like how to shop at the grocery store, or do laundry. Moms and Dads have a tendency to want to do everything for their child, but that isn’t actually helpful. A parent’s role is to raise a competent adult who knows how to do things for themselves so that they are prepared to handle what life throws at them.

I would add a point of my own here – it is awesome to have activities and hobbies as a child and a teenager and this should be continued through adulthood. It is fun and healthy! After all the purpose of life is to be happy, not to work that 9-5. But if you can guide a child into some activities that may be lucrative later in life …. not the worst thing either.

I feel that most of my hobbies are not something that I can market to make money in the “no-collar” economy when I need a little more. I had friends making minimum wage at McDonald’s and friends making twice that working as lifeguards and swim instructors during school. Guess who ended up with more money and fewer hours at a job?!

Yup. Splash splash.

Same with less organized hobbies, like sewing or knitting, playing a musical instrument … these are all things that a poor university student (or newly employed-broke-dying under student debt young adult) can leverage at certain times to make money, by selling a product or teaching others. My nephew loves hockey and soccer, but it would be hard to make extra money as a soccer instructor, especially mid-way through the academic year which would be January. In Canada. His sister could be a great swim teacher through, if she stuck with it. She is “artsy” too, maybe she could sell her skills in that division.

Probably getting a little off track of the book review, but I think the point is really important and as an Auntie, I try to hammer it into those kids’ heads. They think they understand now but they won’t really until they are halfway through university and eating Ramen noodles three times a day. I don’t want them to be without marketable skills when they realize it.

“Saving for School” teaches the reader the most effective ways to leverage your savings – whether it is $20.00 a month or $200.00, to put someone through university. It covers how to engage a financial institution to create an RESP (registered education savings bond) and get the CESP (grant money) and the great tool that TFSAs (tax free savings accounts) can be to keep your money out of the tax man’s hands. It gives some advice for how to prepare a child to become a responsible university student and how to establish a credit history as a young adult.

I HIGHLY recommend it and hope you pick up this book.  If you feel it wasn’t for you, you only wasted about two hours. And I’ve searched about five local library systems and they all had a copy. So you can go borrow it for free.

* * * * *

xx

P.S. Gail has a website with tools on it. Check it out here.

P.P.S. Still stuck on that comment I made about paying off student loans and interest calculators? I copy and pasted this from Gail’s website for you. Credit to her please!

Let’s say, for example, that you have a $20,000 loan at 8%, and you want to have your student loan paid off in 3 years, which is 36 months.

First, the interest: $20,000 x 8% ÷ 12 (months) = $133,33. That’s the interest part of your monthly payment.

Now the principal repayment: Take your total principal of $20,000 and divide it by the number of months you want to take to pay off the loan, in this case 36.

So, $20,000 ÷ 36 = $555.55.

Add the principal amount of $555.55 to $133.33 in interest and your monthly payment is $688.88.

That’s a good indicator of what your monthly payment will be on the loan. It’ll actually be a little less since interest is calculated on a declining balance (as you pay off your loan, the principal goes down, so the amount of interest goes down).

The government of Canada has a website that offers a loan repayment calculator (http://tools.canlearn.ca/cslgs-scpse/cln-cln/40/crp-lrc/af.nlindex-eng.do) to take the math out of the exercise, if you’re number-challenged. You can enter up to three scenarios at a time to see how much you’ll have to pay monthly along with the interest you’ll pay over the life of your student loan.

Happy saving!

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