Act with Brio!
Do you have a student line of credit? Pampered by your financial institution, you may be offered a huge amount of credit. According to your program of study, your limit will be based on your needs and could be as high as $275,000.
Use for the necessities
The purpose of a line of credit is first and foremost to cover your living and education expenses: books, instruments, new computer, etc. However, swayed by the people around you or by your own emotions, you may be tempted to make impulse purchases that are really beyond your means.
It’s very easy to go into your credit line and buy now THE high-end bicycle or THE dream trip! You have the illusion that you have extra income to cover your expenses, but it is actually a debt that you will have to pay back sooner or later, with interest.
Money and... you!
Does money slip between your fingers as soon as you have a little? Are you overcome with an irresistible desire to buy something, even if you can’t afford it? Do you spend more when you’re stressed, tired or depressed? For some, spending is a way to relax, to boost their energy or to lift their spirits.
Do the people around you or your peers influence your spending choices? Are you the type who is easy to persuade, to the point where you end up buying something you don’t need? Do you fall easily for all the online product and service offers? How do you react in these situations? Your answers to these questions indicate your ability to responsibly manage your debts and may be a warning sign before you plunge too deep into debt.
Recreation, travel, it’s possible: it’s okay to dream! The important thing is to budget for these expenditures. It’s easy to do by following these practical tips:
- Keep an eye out for transportation and hotel discounts.
- Choose an economical destination (cost of living, exchange rate, etc.).
- Organize the details of your trip according to your budget (activities, type of lodging, transportation, etc.).
By preparing far in advance, you’ll be able to budget for these expenditures. This will also enable you to be realistic and to save so as to manage your debt responsibly.
Pay less later
Any spending you do now that was not budgeted for must be added to the list of debts you will have to pay off. You may think this is not a problem because your future professional income will be more than sufficient. However, by making a few simple calculations and adding up all your superfluous, unnecessary expenditures, you will quickly see that the monthly payments you will have to make will take a large chunk out of the big salary you are expecting to earn.
Do the calculation!
Good financial exercises
Credit is useful when it is used wisely. In case of doubt or before making a costly decision, speak about it with your financial advisor. With his expertise and his knowledge of your reality, he can help you adopt good habits and learn to manage your debts responsibly.