Failure to Launch: Why Post Grads Are Putting Off Financial Milestones

Why post grads suffer with failure to launch

Forget the gangly teenage years – post graduate life is an awkward time.

Especially in a culture like North America’s (and most cultures for that matter) where the pillars of stability are finding a career, buying your first home and starting a family, many young adults are finding themselves failing to launch.

Student Debt Found To Cause Major Financial Delays

A seesawing job market and astronomical tuition costs are main causes behind young adults’ slow starts. According to a poll by TD Canada Trust, 30 per cent of post grad students take on more debt than they expect to and 40 per cent struggle to make minimum repayments on student loans in the first two years after graduating

The Next Phase Is Out Of Reach For Post Grads

Among the milestones stubbornly staying the back burner was home ownership – 40 per cent admitted debt was keeping them from buying their first home. Thirsty six per cent are in stasis waiting to start a family, 23 per cent are postponing getting married and 18 per cent are still living with their parents while they wait to repay their debt.

But it doesn’t have to be that way, says Shahz Beig, an associate vice president at TD Canada Trust.

“A Master’s degree offers the opportunity to delve deeper into a field of study, but the balancing act of borrowing heavily to finance education versus saving for the future has to be taken into account,” says Beig. “For students making the personal decision to begin post-graduate studies, it’s vital to create a financial plan and work with an expert to find smart financing options, like a student line of credit, to help pay for school.”

Kickstart Your Finances… And Your Life

To help ease some of the concerns surrounding returning to school, Beig – a recent post grad student himself – shared some insight on managing finances while in grad school.

Budget: Keep a tight reign on your daily cash flow. Organize what’s coming in via loans, scholarships, bursaries, work and savings and know what’s going out. Keep track of your expenses and don’t overlook things like entertainment and personal items.

Save: the most self-explanatory but oft-overlooked. Create a home for your savings in a tax-efficient account. Apply for bursaries, grants and scholarships. The Lifelong Learning Plan (LLP) allows students to withdraw up to $10,000 a year from an RSP to finance eligible education, to a maximum of $20,000 over four years, says Beig.

Plan: Develop a realistic plan for paying back debt as well as saving for life’s milestones. Meet with a financial advisor if you need a hand putting a plan in place.

 

Related Topics

Buying A Home / Debt Repayment / Lifestyle / Mortgages / Personal Finance

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