With inflation at its highest, it's time to start skipping those $5 coffees
This summer Canada’s annual inflation rate peaked at its highest since 1991. While these relatively poor economic conditions affect all Canadians, it has taken a greater toll on post-secondary students who are dealing with a multitude of different expenses beyond their necessities, such as tuition, student fees, health insurance and course materials.
Of course, inflation is to blame for the increase in student spending over the years. However, these economic circumstances do necessitate better financial planning from students to ensure they maintain a healthy lifestyle and effectively reduce their outstanding student loan debt.
Before students can begin financial planning, however, they must break down the biggest barrier standing in their way – differentiating between their needs and wants. This is easier said than done. It takes responsibility, and more importantly, a strong sense of self-discipline.
Everyone is guilty of impulsively splurging their dollars from time to time but habitual spending on needless items can quickly add up, especially during the current period of inflation. It takes practice to question whether a purchase is absolutely essential and budgeting can help. A survey by the Financial Consumer Agency of Canada found that Canadians, under the age of 35, who budget are less likely to graduate with student loan debt compared to non-budgeters.
A survey by the Financial Consumer Agency of Canada found that Canadians, under the age of 35, who budget are less likely to graduate with student loan debt compared to non-budgeters.
Just as students plan out time to study and complete assignments, it is worthwhile to create a budget that sets limits on weekly, monthly and annual spending. This may involve tracking regular purchases to gauge where money is being spent unnecessarily. For some that inessential spending may look like $5 coffees every morning or a spontaneous purchase of a pair of $200 shoes. The point is these dollars could be better spent elsewhere.
On the other hand, some students may be having trouble even affording their necessities, causing them further stress and anxiety.
With the immense pressure students face in their everyday lives, it is understandable budgeting is not always a priority. Students may feel overwhelmed or simply lack the time to even think about planning out their finances.
Whatever the case may be, all students must improve their financial literacy. Not only are these skills valuable for dealing with educational expenses, but it provides students with the confidence and capacity to make well-informed financial decisions later in life. There are many resources offered by Mac’s Money Center and the Government of Canada can help improve your financial literacy.
If this was not convincing enough, consider that being mindful of personal purchases and effective budgeting also promotes the development of financial wellness. By managing their money, individuals prevent and mitigate the stress invoked by poor financial conditions. In these ways, an individual’s financial health has a tremendous impact on their overall health and well-being.
Whatever the case may be, all students must improve their financial literacy. Not only are these skills valuable for dealing with educational expenses, but it provides students with the confidence and capacity to make well-informed financial decisions later in life.
In the current economic climate, students face the rising costs of tuition, rent, food, clothing, entertainment and, not to mention, higher interest rates on student loans. But inflation does not have to completely ruin your morning stops at the coffee shop. With effective financial planning, you can become financially independent and still treat yourself to those $5 coffees without hurting your wallet.
On Mar. 23, the Ontario government announced a plan to make financial literacy a component of the new curriculum for the Grade 10 Careers course. This is welcome news. I entered university with next to no understanding of finance, personal or otherwise, and could have done without the onslaught of BuzzFeed-style personality quizzes doled out in my careers class.
The announcement to rectify this knowledge gap at elementary and high school levels is a commendable one. The idea of incoming first years understanding how to manage their finances is appealing.
But this announcement and this commitment to change at the high school level are not enough.
Students are taught from an early age to be afraid of anything related to math, numbers and even simple arithmetic. This is presumably because, for generations, teachers have been taught to be afraid of doing, and, for that matter, teaching math. That has real, tangible effects and nowhere is this easier to spot than in teachers’ colleges.
In an effort to equip student teachers with basic numeracy skills, some universities are scrambling to develop crash courses and last-minute reviews. Queen’s University is creating a new class on essential numeracy skills for all primary school teachers. Lakehead University distributes a mandatory two-hour math competency exam for teachers aiming for Grade 1 to 10 classrooms where calculators are prohibited and, according to a Toronto Star report, about one-third of students fail the test the first time around.
While McMaster does not have a specific education program, many grads see teaching as a career they wish to pursue following their undergrad. But if those prospective teachers are pursuing teaching from humanities or social sciences, they are potentially lacking in both math skills and confidence. The average Bachelor of Arts degree does not require students to take multiple, if any, mathematics courses. This means that the last math courses they took could be as far back as their final mandatory Grade 11 math class.
Couple that with the infuriating stereotype that arts students pursue reading and writing because they can’t do more advanced arithmetic, and the university is setting future teachers and future students up for failure.
This is pervasive at McMaster. From Welcome Week presentations and cheers to the deans of Faculty of Humanities dedicating their speeches at awards ceremonies to jokes about arts students’ poor math skills, the myth that humanities and social sciences students are neither smart enough nor dedicated enough to excel in mathematics is offensive and hurtful.
As a student whose program bridges humanities and science disciplines, this is particularly upsetting. I was required to take a university level math course for my degree. During the time that I was in Math 1M03, I had to block out jabs from peers in both STEM faculties and my own to remind myself that I could pass a math course.
It’s fantastic that the Ministry of Education wants students to graduate to adulthood with some basic financial skills in their tool belt. As these math review courses in education faculties at various universities become more entrenched, I think we will see a difference both in teachers’ and students’ confidence in their math skills. But before that happens, we need to see a lot of changes on a lot of levels of administration.
At the university level, undergraduates in arts programs don’t need to hear the jokes about how bad they are at math. They don’t need to hear them from their peers and they absolutely do not need to hear that from the heads of their faculties. It’s insulting. It’s condescending. And it perpetuates a wide range of other stereotypes about gender and demographics that are more numerous and complicated than I can address in one article.
Math is hard, sure. But so is reading over 100 pages of courseware a week. So is writing so many essays a semester that you develop a formula for two, three, four thousand word papers.
Academic challenge shouldn’t be scary. And no one should make that clearer to students than their teachers, no matter the level of education.
By: Spencer Nestico-Semianiw
Financial literacy is a problem on post-secondary campuses. In Canada. In Ontario. At McMaster.
The unfortunate reality is that this statement is not repeated nearly enough across universities or within our levels of government. Yet Canada has seen a huge focus in 2016 on student and youth issues. Ontario’s provincial government introduced sweeping changes to the Ontario Student Assistance Program, Trudeau’s Liberals brought much-needed expansion to the Canada Student Loans and Canada Student Jobs programs and initiatives to indigenize universities and better support student mental health are well under way. These are vital steps that need to be taken. While celebrating the progress made on these issues however, politicians and university staff cannot forget an extremely important determinant of student well-being and future success: financial literacy.
Financial statistics show the situation is grim. In the Spring 2016 National College Health Assessment by the College Health Association, 34.3 per cent of student respondents admitted that finances had been “traumatic or very difficult” for them in the last 12 months. This was higher than all other options except for academics, the death of a family member or friend, career issues or intimate relationships. In the 2016 First-year University Survey Master Report by the Canadian University Survey Consortium only 77 per cent of students stated that they had successfully transitioned in the area of managing their finances between high school to university.
Even more concerning is that several studies have found mixed results around whether current financial literacy courses are effective in teaching students literacy skills. A 2009 study by Mandell and Klein found no measurable difference in financial knowledge between students who had taken high school financial literacy courses and those who had not, while evaluations of British Columbia’s mandatory life skills course Planning 10 have provided similar mixed results on student financial literacy takeaways.
By sitting down with McMaster’s Student Accessibility Services and the Student Wellness Education Lower Lounge, it is clear that staff perceive financial stressors as a notable driver of student mental health challenges. The connection is intuitive; difficulty to afford university education or curtail rising debt are inherently stressful, and are exasperated by a lack of financial literacy skills. As a result, financial literacy not only impacts the well being of our students, but stresses already incapacitated campus universities.
Where can we go from here? Recommendations made by the Task Force on Financial Literacy include integrating financial literacy into elementary, high school and post-secondary education, while including a financial literacy component into the Canada Student Loans Program. A continuous concern by student groups such as the Canadian Alliance of Student Associations and the Ontario Undergraduate Student Alliance is that programs such as CSLP and OSAP are often extremely complex, and can inhibit students from understanding their finances and the arduous processes of applying for aid.
When meeting with the McMaster Alumni office, it is clear that more can be done to help successfully transition graduating students into the workforce. As graduation brings a plethora of new financial challenges, including financial aid repayment, investment opportunities, mortgages and debt management, it is more important than ever that the federal government and universities invest in a financially literate graduate pool.
When evaluating the progress universities are making in areas important to student success, one must ask a perennial question. Who are we leaving behind? And amongst many groups, students without financial literacy skills stand out strikingly.
Disclaimer: the author of this article works for the Student Success Centre.
