More Money Podcast - 090 Listener Series - How to Graduate University with Almost Zero Debt

Episode Date: February 9, 2017

Want to learn how to set yourself up for financial success before graduating university? Listen to my interview with podcast listener Allison about how she'll be able to graduate almost debt-free. Long description: If you want to set yourself (or your kids) up for success, it is crucial to understand the consequences of taking on too much student debt. Yes, it is one way to be able to afford a post-secondary education which in turn could lead to a job with a good salary...but it could also hurt your chances of living a life that's not tied down to years of debt-repayment. For this episode, I chat with one of my podcast listeners Allison from Manitoba, and she shares what she's done so when she graduates she'll only have a few small amount of debt to pay off. This includes her working year-round and during the summers, living extremely frugally, and not using all the student loans she was granted. She is one financially savvy 21 year old, let me tell you. And I know from personal experience because she did pay attention to her finances during university, she'll have a much easier time after graduation. Being debt-free (or close to it) after graduating will not only offer you more freedom and opportunities, but you'll realize that you've already got some great financial habits. You'll also be able to achieve some of your financial goals sooner and build wealth quicker thanks to the magic of compound interest. One resource Allison mentioned a few times, and inspired her to take on this frugal lifestyle, was Mr. Money Mustache. He's actually Canadian (woot woot!) and is mentioned by listeners all the time, so make sure to check out his stuff! I also mentioned in this episode that I interviewed my sister who graduated university almost a year ago. Here's the video of our interview (and she said she was nervous to do a Facebook live stream with me, ha!). My Interview with My Sister About Money After Graduation Listen to the episode I recorded with my younger sister just after she graduated university: http://jessicamoorhouse.com/53 Join the Community I mentioned at the end of the episode that I have a private Facebook group all about Money. Life. Balance. We're over 500 strong, and I'd love for you to join us! Helpful Resources I spent a good chunk of the past few years creating resources to help you with your money, life and adding more balance into the mix. Check them out on my resources page. Got a story that you think would be good to share on an episode on of Listener series? Please email me! For more podcast episodes, check out the podcast page. Show notes: jessicamoorhouse.com/90 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, and welcome to episode 90 of the More Money Podcast. I'm your host, Jessica Morehouse. I cannot believe I've just said 90. That is 10 episodes away from 100. I'm going to be in the triple digits soon. Where did the time go? Time flies when you're podcasting, I suppose. So this is Thursday, so it means it's another listener series episode. And I'm so excited to talk to my next guest, Allison from Manitoba, Canada. Me and her have been going back and forth over email for a few months trying to figure out a good day to chat. So finally we did. I'm so glad because she has a very unique story. I don't feel like I've really shared too many episodes about this topic. The one that really just comes to mind is when I interviewed my younger sister, Sarah, about her experience of having just been graduated from university.

And kind of we talked about kind of the student life and all that kind of stuff. And so Allison is in her last year of university. She has one more semester to go and then she's done her degree. So proud of her. That's so awesome. But not just that. She has been able to do this with a very minimal amount of debt, and she is completely financially independent. So even though she does have a little bit of student loans to help her out, she works like crazy. She is very financially savvy and frugal, and she's doing it all by herself. And we're going to talk all about how she's able to do this and all that good stuff right now. Thank you, Allison, for joining me on the show. I'm so glad we finally set a date. I know there's

some back and forth, mostly me being like, oh, wait, oh, wait, sorry. So I'm so glad that we're chatting finally. Yeah, yeah, no, it's great. I know I was feeling really bad because I was like in the middle of exams and like, oh, for sure. I've got a few jobs and school and stuff. So yeah, it was totally. We're both busy. Both busy people. But yeah, so yeah, like you mentioned, so you're a student, you've got exams and all that stuff. You're in your last year as I know it, but I would love to, you know, we'll kind of go into where you are now because you've, you know, accomplished, I think, something that a lot of students cannot, which is basically being financially independent, not drowning in debt and setting yourself up for, you know, kind of an easier ride once you graduate and kind of start your new life working. So, but I would love to know, were you, at what point did you kind of really start thinking about your money and your personal finances and what even, like, drew you to go to university university what are you studying okay well I mean like I grew up in a household where

my parents talked about money but it was often more of a like scary thing like it was a lot of like you've got to pay your debt always yeah that was what I grew up with, which is actually not a bad way to grow up. But I, my parents are from a smaller town, and there is a university there, but not the program I'm in, which is a Bachelor of Health Sciences. So I moved away at 18 to come to school. And there was a little bit of an RESP there that first year. So that was fine. And I kind of just like flailed around and was like, I don't know. I don't need to worry about this until whenever, next year. So your RESP, it covered you for your first year, but then you had to figure out another situation for the rest of your degree? Yeah, exactly.

And I'd kind of just been in the boat of like, like a lot of people I know and like people my age, you know, it's like, oh, well, I'll just get loans and they'll be from the government. So it's not really that bad. And then I'll worry about it later. Yeah. And that was way more comforting, you know, than like. Oh, of course. And it's like everyone else is doing it.

So you don't it doesn't seem like you're taking a loan from the bank, which seems a bit foreign. It's like student loans. Everyone's got those. Yeah, exactly. Exactly. And it's like friendly and like, okay, you're doing it for a good reason because you're going to school. So yeah, that was my situation. And so I did apply for student loans in my second year. And it actually, I'd have to say that's almost where it started for me because at the school I go to, if you have a certain amount of student loans

there are student jobs on campus that they'll open to you oh nice like help you pay for schools you're taking out less yeah so that's great yeah no it's so great and that's one of those things like I'm always like raving to people like there's so many things for students if you look for it but it's not like advertised or open you know like it's kind of something you dig around to find and did you have to dig around for that like where did you find that oh my god it was such a fluke I like I um had been looking for a job and I'm like I've worked before and I'm bilingual and I've always been somebody who like worked one usually like two jobs just because I liked having money and I was

not having any luck and I was so blown away because I was like what am I doing wrong this is freaking me out so I went into the career services office and I like explained it and I was a little frantic and they were like oh well actually like do you have a student loan and I was like I do and they were like well actually we have this student position. Would you be interested in working for us? And I was like, yes, literally anything. Just give me a job. So I started there. And that was like my first experience with work study. And it was like very part time and very casual, but it was on campus and it was great. And it like helped me learn a lot about everything else that was going on on campus and then that summer I finished and I I had decided I was going to stay in the city that year I wasn't going to move home because I found it kind of like in I don't know I just found it difficult to like move home and then have to move back four months later, whatever. So I was looking for a summer job. And somebody from career services was like, Oh, well, there's something similar

at this other organization in the city, you should apply. And so I did and I got that job. And that was sort of a game changer, because it was a lot more money for me. I was like, Oh, like, I maybe could save up enough for the summer to pay for tuition. And I was like, oh, like, I maybe could save up enough for the summer to pay for tuition. And I should add, like, I'm from a province that has a really cheap school. Like, I don't know that this option would exist other places. Like, I was actually in Toronto this weekend, and I was, like, talking to my boyfriend and his friends who live there and I was just like what like you guys say what yeah yes it does definitely help that I go to a

very like cheap school and like the cost of living in my city is low um but about that time too I'd inherited a little bit of money from my grandma's estate because she passed away and I was like I can't waste this I need to like figure out what the absolute best thing I could do with this is to like be a responsible human and I don't know I don't even remember how I think I stumbled across Mr. Money Mustache in like the Globe and Mail or something yeah I was like curious and I started like I devoured like every single post of his in like a period of a few months and I was like wow there's this other way like it's there's an option there like a direction I could move in that I like that isn't just like

be my parents or not there's anything wrong with that but like okay you don't need to like be panicked all the time that you're never going to have enough money for all of these things that you're supposed to want to do. And so, yeah, that summer I like got my life together. I was like pretty vigilant about like negotiating my phone bill and like moving to a cheaper place for rent. And so, yeah, I managed that year on my own completely. Nice. Yeah, it was so awesome. It was such a, like, kept me going much more than, like, it was a really motivating thing

just to be able to do it on my own. Because, yeah, I don't know anyone else that's in my boat right now. Um, a lot of my friends here live with their parents, which is way more normal if you're going to school or, um, they just have a lot more debt. So, yeah. Yeah. And then this year I did take out some loans, but just for tuition, not for living expenses. And my situation has kind of changed.

I took on a few more like contracts and odd jobs that I think I'm probably actually going to start making payments on my loan right now before I've graduated. Yeah, that's awesome. Yeah. Often when I'm born in class, that's what I'm doing. I'm like, how can I throw a little bit more at this? Because I don't like the idea of it. Oh, absolutely. I was the exact same way. I didn't have, like I was able to, I had the luxury of living at my parents, not having to pay rent. But when I was in school, I always worked and saved up and, but I did have to get a loan my last year.

But once I graduated, it just irked me so bad. It was only $5,000 I owed, but it just drove me crazy that, you know, if I prolonged this loan payment thing, they could be taking thousands of dollars from me through interest. And I knew this just because I guess I was just very much more aware of it. And but my, you know, lots of my friends, they had no idea that they had to pay interest on their loans. And so I made it like my goal to get it paid down before another year went by. And I did, but it wasn't easy, And I'm sure you're kind of in the same boat because you're still in school. You're also working and then trying to pay off this

loan while you're still doing that. I mean, that's very inspirational. I'm sure because I think a lot of people just don't think it's possible, but it can be. Sometimes you just have to try a couple different avenues totally yeah and like I live in a really car dependent city and so I've been I don't know pretty adamant like no I'm not getting a car I know how much of a money suck that would be and I can't for sure I just I can't do this like loan repayment thing with that but on the other hand, like this past spring, I did save up some money to go abroad to like Israel and Egypt for a few weeks. So like I'm willing to like splurge on something and like maybe put off the loan a little bit, but not a lot of other things that I know other people are totally into, which is fine. Yeah, absolutely. So I'm curious, do you have,

because you're still, you still have one semester left or? Yeah, this is my last one. Oh, that's exciting. It's always the hardest because you're like, I just want to be done. I know. Yeah. And I'm in this one like capstone course right now. And my prof is like, you know, when you guys go to grad school, I'm not going to. Yeah no not going it's like nope i'm done for a little bit yeah i remember my prof's talking about grad school a lot i'm like are you kidding i'm done with school for a bit i just want to live my life now get groceries delivered across the gta from real canadian superstore with pc express shop online for super prices and super savings try Try it today and get up to $75 in PC Optimum Points. Visit superstore.ca to get started. But I'm so curious, you know,

what are your plans, I guess, for your debt repayment? Like, do you kind of have a plan of attack? I guess it kind of depends on what your, you know, income situation is after school, but like, do you have a date and, you know, what are your kind of goals for, uh, to get debt free? Totally. I'm like, so type A I've got, I like, like by the end of this year, I want it gone. So I should mention, like, I'm in a province too, where this, the provincial portion of my student loan is actually interest free. It's just a portion that has interest. And of course, like the federal portion makes up more than the provincial portion. But again, kind of

a benefit relative to some other situations. So I threw some like weird fluke student loans gave me way more money than I needed this year. And I was a little and it's just it's all done through this like arbitrary calculation. And so I got all this extra money and I was like, okay, well, I don't need this. This like freaks me out that it's here. And I just stuck it in my savings account. So it's collecting interest. That's nice. And that's probably something most people don't do. They're like, oh, oh free money I guess I'll just spend it yeah exactly so I mean all of that is going directly back to the loan right away um I plan on using all of my tax return and again the province I live in gives you like a 60 tuition rebate if you stay so I'm like estimating that that'll be about $5,000, which will take me down quite a lot.

And then if I absolutely need to, I'm going to see how comfortable I am. But I do have some money in a TFSA that I've been like kind of saving up for the past few years that I might just tap into to get rid of it completely if I'm feeling a little like handsy about it. And what are your plans for, I guess, after university? What is your ideal job? Yeah, I don't know. So I'm in the Faculty of Health Sciences. And I spent time at the Career Services office. And my actual job right now that kind of came from that is I'm a career coach for newcomers. So all of my days I spent like resumes and cover letters and job search. So I've got the tools. Yeah, that's super helpful. I should do. I'm in that contract is part time. And I'm on the fence kind of thinking about whether or not I should go into medicine. That was my original plan and little short story.

When my grandma died, it was the result of a medical error, and I was very like, ooh, I don't like that. It's dumb. I don't know if I want to be. So this summer I'm planning on starting my MCAT, so I'm thinking I'll still be part-time, which will limit my loan repayment a little bit. But then again, it'll keep me under that federal threshold that I actually have to pay it back and that it's collecting interest. So if that stays the same, I'm still going to try to wipe it out this year. And if I'm working full time, then it would likely be in sort of a like employment services or HR

position. And so I don't think it would be an issue to, to completely wipe it out. Yeah, definitely. So you mentioned that you're going to take the MCAT. So you have, you know, a possible desire to go into the medical field that would also mean more school and possibly more loans. How do you feel about that? I know, I know. And it's funny. Because again, like going back to Mr. Money Mustache, I'm only 21. If I just kept saving at the same rate I'm saving now and worked full time, I'd probably be okay to kind of like semi-retire in my 30s which is crazy like very appealing um but it's also like when I really love my job right now and I find it very meaningful and like it really gives me a sense of purpose and I don't know if I want to give that up

for something I'm not as yeah no that's not a guarantee like that um but I'm gonna I've got some friends that are doing that and I'm watching them and seeing how it's going and again like doing my research like the province I live in I guess they just need people so bad if you practice in Manitoba you get loan loan, like loan forgiveness, and they'll actually give you return of service bursaries while you're in school too. So if you agree to serve six months, you get $12,500, which covers an entire year of tuition here. And then, yeah, if you did have to take out loans through the government, they will forgive it if you work an additional amount of time. So there is the option to be loan free.

And I could probably keep my current living situation if I was in the city and doing that. So I haven't worried too much about it in that way. It's like the program here is pretty cheap and whatever. But yeah, it would mean more time of regular life. It seems like kind of a theme is definitely knowing what province to study in. And I think a lot of people, I mean, you are from Manitoba, so it kind of was an easy decision. But I think a lot of people, when looking at what university they should go, everyone wants to go to the best school, of course. I'll tell you from my experience, no one really cares what – in Canada, anyway, no one really cares what university you went to. As long as you did well and you have some kind of

work experience, at the end of the day, they just want someone who can do the job well and has some good references um and has a degree but i've never been like oh you went to that university great that's a great school and i did go to a good school no one cares so i think it's very important if you're anyone listening is uh in the process of thinking of going to university and picking a school definitely look into the benefits of each province because Manitoba sounds like there's some major benefits. Yeah. Well, I think like we've got, we've had a new provincial government now for about a year and they are

talking about some, some changes. So I think things will change, but I know my sister's choosing to go to universities right now and she's like leaning towards Calgary. Sarah, like look at this kind of stuff because like you know it's just like for her and because we're from a bilingual family i was like you should just move to quebec establish residency and then yeah go there because

it's even cheaper than here like is it oh wow and plus I mean beautiful province beautiful province lots of like history yeah oh yeah it's amazing yeah absolutely I mean I don't know if I'd you know do anything different I mean I loved being in BC and it was nice you know still living with my parents and being with family but I think you know the future when I look to like having kids down the road and going through this situation helping them find a school I would definitely I think, you know, the future when I look to like having kids down the road and going through this situation, helping them find a school, I would definitely I think, A, I want them to have the, you know, financial freedom to be able to choose whatever school they want, not necessarily the province they're from, but also for the benefits. Because I mean, yeah, some of those are, you know, they can really change your life. I'd say, you know, there's a big difference between graduating university, you know, almost debt free, or you're, you know, you're pretty close to it, or with like $50,000 in debt, like that can really, I mean, change your options, quite honestly, it'll make you maybe decide to choose a job that you wouldn't normally,

but you need the money right away. So it's, you know, you'll make you maybe decide to choose a job that you wouldn't normally, but you need the money right away. So it's, you know, you're setting yourself up for success with as little as you can in the debt situation. Yeah, yeah, no, I'm for sure. And I do know a few people that have like 30, like whatever, a little bit more if they're in medical school. But yeah, it does, it totally does limit you. And it just changes. You know, you don't have the freedom to like, yeah, sure, small things like vacations or days off or whatever. But bigger picture, you just don't have as many options, right? Because you pack up and like, go to Japan for a year just because you want to and teach English like that's not gonna. No, and it to happen. No, and I don't think a lot of people,

especially younger people in their early 20s or even in high school realize that when you do graduate with that much debt, it does take a long time to pay off. And it kind of in that, because it takes so long to pay off, it kind of delays some of the things that maybe you'd be able to achieve sooner.

Like some of your saving schools really aggressively investing while you're young to really, you know, take advantage of compound interest. And I mean, I still have friends, I just turned 30. I have friends my age that are still paying off their student loans from their undergrad that happened like seven years ago or eight years ago. So it's definitely, you know, something to take into consideration. If you can avoid student loans, try your best or just try not to take out as many as possible. And I think, yeah, lots of people just don't understand the consequences of taking out big loans and using up all that money. I mean, you were given more money than you needed. And I'm pretty sure

most people in that situation would just use that as an opportunity. Oh, great. I can, you know, fund, you know, my trip with my girlfriends or I'll, you know, rent a nicer place, get some nicer furniture or whatever. But you were kind of savvy enough to realize that. Or if I do that, that means I have to pay that back and that will kind of stall me in the future. Totally. Yeah. Well, and like with the extra amount of money I got, it pushed me into, I think, $10,038 on my federal loan. And I just hated that it had gone up to five digits. I was like, there's no way in hell. So no way. No way. So kind of wrapping up what are, you know, from your experience as a student, what are some, I would love to know, because it seems like you're very financially savvy and you kind of live fairly uh frugally and you're very conscious consumer what are some tips that you would like other um students to know

to kind of lead by your example and you know not graduate with a boatload of debt biggest one just like know your systems like do the legwork to figure out what your school offers or what your province offers or if there's um because chances are there's stuff there but again it's not always easy to find and it's not always um super accessible at your first look but if it's there you should use it because it's there for you. Exactly. Yeah, would it be another one? I don't know. Just like take, go to Mr. Money Mustache and like, absorb some of those things about like, like, like cars, like, do you need? Do you really need one? Can you? can you not, does it matter if people

think you're weird? Cause you like bus everywhere. Cause I bus everywhere and people do sometimes. But it's like, well, you're getting close to debt free. And I guess, um, another big one is, you know, actually working during school. When I was in university, I had a lot of friends who said that, no, I really need to pay attention to my studies. So I don't want to be distracted by working, which made no sense to me because I understand that mentality. But in the game of life, once you're out of school, guess what? Like, you're not going to just be able to focus on one thing. Like, you know, like, that's, that's a nice dream world to just be able to go to school and focus on that. But a, it'll, it'll be tougher for you to find a job after school because you'll have absolutely no work experience. And I mean, my personal experience, the years of customer service, you know, work that I had, that's what helped me get my first job out of school. So and it also Yeah, you can make money. So don't be afraid to get a job or two while you're still in school. Yeah, no, that is such a huge one. I have some friends that do choose not to work or work in like things that, yeah, it sucks because you're coming out of it with nothing and you're competing with people who

do. So exactly. Lots of people with the same degree and maybe the same grades, but guess what? They also have work experience. Who do you think is going to get the job? So yeah and it just honestly I find even with school it gives you such a better perspective on like okay this isn't the end of the world and like in real life this is maybe how it would be different because it can get kind of stressful to be wrapped up in only one thing and be like yeah like it's nice to actually have, like, I honestly, like, when I was in university, I loved going to work because it's, you know,

something completely different. You had a different set of friends, different tasks to do. And sometimes it was menial work, but you're kind of happy just to have something that you didn't have to think critically about. Yeah, totally, totally. And again, you're like meeting people and you're making connections. And it's, I think it's good just from like a balance standpoint, as long as you're able to balance it. Absolutely. And I'm all about balance. So totally on the same page with you.

Well, thank you so much, Allison, for joining me and sharing kind of your story. But also just, I think it's so important to share like how people are doing things. Because there's so many people that when I was your age, I'd be like, how is this person, you know, how do they afford that? Or how did they get that opportunity? And it's because I never asked those questions I never knew. So I'm glad I can now find out how people do the things they do. Yeah, yeah, yeah. Awesome. Well, thank you for having me. This was great. And that was episode 90 with Alison from Manitoba, Canada, yeah. Awesome. Well, thank you for having me. This was great. And that was episode 90 with Allison from Manitoba, Canada,

sharing her story about how she was able to do a four-year degree, university degree without much debt and basically setting herself up for success because she's not burdened with thousands of dollars of loans awaiting her for the next decade. I highly recommend this strategy. It's what I did. And honestly, I don't know where I'd be if I graduated university when I did, which is right after the recession, and also have a boatload of debt waiting for me to pay off. I don't think I would have been able to move out of my parents as soon as I did. I wouldn't have been able to do a couple of parents as soon as I did. I wouldn't have been able to kind of do a couple of different side gigs. I probably, you know, just in general wouldn't have had as many choices and opportunities. So hopefully you can learn a little bit from Allison's journey and experience. So if you want to check out the show notes, I am going to include some information,

some tips on everything we talked about in this episode. So make sure to go to jessicamorehouse.com slash 90 for all that good stuff. And again, I'm always looking for new listeners to join me for another listener series episode. I've got quite a few slots that are still empty. So if you would like to share your story, and I know you would, if you're listening, how fun would that be to chat with me? Just shoot me an email. It's as easy as that. Jessica at jessicamorehouse.com. Shoot me an email and we'll see if you would make a good fit for one of my future episodes. And I also mentioned another episode you'd probably want to check out is the one that I did with my younger sister, Sarah. She just, at the time, she had just graduated university and she was visiting me in Toronto.

And we just chatted about what her future plans were. And so and she was also able to do it without ever getting a student loan. She worked the entire time. She lived at her parents' place to save money and was just pretty frugal and smart with her money. So make sure to check that episode out. It is episode 53. So you can find it quickly on iTunes or just go to jessicaborehouse.com slash 53 and you can listen to it right away. We even actually did, it was a podcast episode, but it was also we did a Facebook live stream. So if you want to watch the video too and see what we both look like, check it out.

And without really keeping you here any longer, thanks for listening. And I'll see you back here next Thursday for another episode of the Mo Money Podcast. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.