The Financial Guide for Post-Secondary Students — Part 3

Bank Accounts and Services

Whether you deal with a bank, credit union or “caisse populaire,” this section will explain the main products and services offered by these institutions. This section will help you understand this world to better protect, manage and save your money. In order to save every dollar you have worked so hard to earn, you must compare savings accounts with chequing accounts and understand the different service charges.

Bank accounts

Why use a bank account?

• Safety:  A bank is a safe place to keep your money when you are not using it.
  
• Savings:  A savings account is a way to save your money.
  
• Earned interest:  On some bank accounts, the bank adds a sum of money called interest.
  
• Access to a variety of banking services:  A bank account is not just a place to store money. Many people use banks to pay bills, to write cheques, to use automatic teller machines, etc.
  
• Record keeping:  With a bank account, you can receive a statement of account to help you keep track of all of your withdrawals and your deposits.
  
• Convenience:  It is easier to manage your money with a bank account with all its related services. Just think of bill payments and Interac payments.
  
• A reference tool:  When you need financing, your bank account certifies that you manage your finances well.

Source: Inspired by the Canadian Bankers Association brochure Helping You Bank

Types of bank accounts

• savings account
• chequing account
• mixed account

All banks offer three main categories of accounts. Depending on the financial institution, the accounts will have different names. But whatever name is used, each type of account will have most of the same features. Look at these features and your personal needs to decide which suits you best.

Savings accounts

The bank usually pays interest on this type of account. It is possible for you to withdraw money when you wish. However, service charges may be higher compared to the other types of accounts. This type of account is a good choice if you do not need to use your money right away or if you do not intend to have much account activity.

Chequing accounts

Chequing accounts are specially designed for transactions. You can make in-branch withdrawals or get money at an automatic teller machine, by cheque or by direct payment. Chequing accounts usually have lower service charges. However, the interest rates are usually lower, if there are any. Open a chequing account if you wish to use it regularly for paying bills or personal expenses.

Mixed accounts

This type of account is part savings and part chequing. You can do chequing account transactions in addition to getting a certain interest rate. It is ideal if you want to save some money but you also want to keep some handy to cover day-to-day finances. For example, some institutions offer high-yield saving accounts allowing you to benefit from the flexibility of a chequing account while you earn some interest based on your bank balance.

Student accounts

Once you have chosen your type of account, you can also benefit from accounts that are specially adapted to certain clients. Among others, there are accounts with modest fees and accounts for children, students and seniors.

If you are enrolled in a post-secondary institution, you could qualify for a student package. These packages generally give students a whole list of services at a fraction of the regular price. This table, available on the Financial consumer Agency of Canada Web site, lists all the different student accounts offered by certain financial institutions and describes their cost and their content: www.fcac-acfc.gc.ca/Tools/CoB/PDFs/Table2.pdf

Bank services

Electronic banking services

Electronic banking services are being used more and more because they are convenient and economical. They allow you to complete various transactions.

• Internet banking:  account transfers, bill payments, balance checking and account movements, credit and investment services.
  
• Telephone banking:  account transfers, list of your last transactions, bill payments and account balance verification. In addition, by dealing with a bank representative, you can use credit and investment services.
  
• Interac direct payment:  In-store purchases.
  
• Automatic Teller Machine (ATM):  withdrawals, deposits, account balance verification, bill payments, account transfers, bankbook updates and access to your accounts through ATMs of other institutions.

Other bank services

Financial institutions offer numerous other services that can be of some use to you. For example, you can get traveller's cheques, foreign currency and insurance at these locations. In addition, as you probably already know, financial institutions offer a large variety of loans and investment options.

Did you know? Fees can be a lot higher for consumers who do not use the right service option or who are not careful with the amount of transactions they do.

Service fees

Financial institutions may offer you numerous services when you open an account with them. You may have the option of carrying out banking transactions electronically, as previously mentioned, or through a bank branch. Fees generally need to be paid for these services according to how frequently they are used. Financial institutions offer service packages to their clients, to reduce frequent banking transactions-related costs. There exists a vast number of services specifically tailored to the needs of various clients.

As a consumer, it is important that you determine your banking behaviour in order to choose the service package that best suits your needs. By doing so, you will avoid paying extra fees for services you don't need. It is important that you visit various financial institutions to benefit from a service package that best suits your needs, for less. In order to help you in your decision, the Financial Consumer Agency of Canada has developed an interactive tool called the Cost of Banking Guide, which lists packages offered by most financial institutions in the country, including special packages for children, students and the elderly. Take a look at this tool by clicking on “Publications” on the FCAC Web site at: www.fcac-acfc.gc.ca . You may also receive a hard copy of the publication free of charge by calling: 1-866-461-3222.

In addition to packages offered by financial institutions, the guide contains information on ATM fees, offers tips to consumers on how to save, and provides a checklist to help you figure out your needs.

ATM costs

Aside from independent operators, who operate ATMs not owned by financial institutions, most financial institutions charge extra fees, known as convenience fees, to non-clients who use their ATMs. These fees are added to Interac, also known as Network Access Fee, and regular account fees.

When you withdraw money from one of these ATMs, you may have to pay up to $4 in fees per transaction (meaning regular account fees + Interac fees + convenience fees).

To learn about fees related to various ATMs, including independent ATMs, please visit the table on ATM withdrawal fees on the FCAC Web site: www.fcac-acfc.gc.ca

Tips to help save money

• Ask questions. Your financial institution can help you in determine which package best suits you.
  
• Shop around for the most cost-effective package that best suits your needs. FCAC's Cost of Banking Guide can help.
  
• Depending on the service quality you receive (loans, investments, etc.) at your financial institution, you may be able to negotiate lower monthly fees for your package.
  
• Use electronic and automated services (Internet, telephone, ATMs, etc.) since they usually cost less than walk-in service.

Use your own financial institution's ATMs to avoid paying unnecessary fees.

If, to eliminate monthly fees, you choose a package that requires a minimal balance, be sure you maintain that balance at all times. Even if the balance falls under the minimum for only a day, you will have to pay the monthly fee in full.

Try to minimize the number of transactions you make (one larger withdrawal can cost less than many small ones).

Source: Financial Consumer Agency of Canada

Would you like to know more?

• Visit the Financial Service Charges Calculator on Industry Canada's Office of Consumer Affairs Web site at: www.consumer.ic.gc.ca/bankfees
  
• Get the brochures Helping You Bank, Getting Value for Your Service Fees and Safeguarding Your Interests published by the Canadian Bankers Association. They are available for free at: www.cba.ca
  
• The Financial Consumer Agency of Canada Web site, www.acfc-fcac.gc.ca , is an excellent resource that provides pertinent information on banking service packages, such as low-cost accounts and specialized accounts, and service fees.
  
• Consult your financial institution and do not hesitate to ask questions.

Tips on How to Save

Students are often on the lookout for ways to save money. Who doesn't want to make more with less?

Here are some tips on how to save some cash: 

Debts: 

• Pay your debts on time. Interest charges add up quickly. You will save significant amounts of money by paying off amounts owing as quickly as possible.

Rebates: 

• Always ask if there is a student rate.
• Keep an eye out for coupons and specials for restaurants, movies, shows, groceries, etc.
• Take advantage of rebates! The movies are cheaper on some nights, and perhaps your favourite restaurant offers 50% rebates on Thursday, etc.

Schooling: 

• Always return your books on time at the library. That way you will not have to pay late charges.
• Buy your books second-hand.
• Sell school books that you do not use anymore.

Transportation: 

• Check the billboards at your school for car pooling.

Food: 

• Make a grocery list to avoid making unnecessary purchases.
• Shop for groceries on a full stomach.
• At the grocery store, buy no-name products. They are cheaper and often just as good.
• Prepare lunch at home whenever possible. You will save by not eating out every day. Make your meals ahead of time. If you know that you have something to eat at home, you will be less tempted to buy meals on your way home.

Insurance: 

• Get information from your insurance company: some offer reduced rates for car insurance when the vehicle has theft prevention devices.
• If you have both car and house insurance, find out if your insurer offers reductions when you have more than one item insured with the same company.

Banking services user fees: 

• Favour electronic and automatic services (Internet, telephone, ATM) at your financial institution.
• Reduce the number of operations you perform in order to minimize your service fees.
  • Make one big withdrawal instead of many small ones.
  • When you are paying with direct payment and the merchant allows for it, make a cash withdrawal at the same time.
• Avoid using ATMs other than the ones from your financial institution. You will avoid additional service charges. Private ATMs are particularly expensive to use.

Would you like to know more?

The www.canlearn.ca Web site offers a vast array of practical tips to help you save. It is an excellent reference.

Employment

Earning your own money

Personal finance is often a sensitive subject. However, the ability to fully or partially support yourself financially is a sign of independence, resourcefulness, autonomy and maturity. Financial support from parents may be an option for certain students, but financial independence is a step that everyone will have to take at some point in their lives.

Although there are numerous different loans available to you, it is also important for you to know that abusing them is a good way to get into debt. Loans are meant to fill the gap once you have combined your personal finances and contributions from your parents, if applicable. This section aims to help you find a job during your post-secondary education in order to lead you to financial independence or close to it.

This section begins with work during the school year, followed by summer employment. It will help you make the best decisions from a financial and experience perspective.

Tips before starting

First and foremost, it is very important to stress one point: Working during the school year is supposed to help you and should not harm your studies. Studies must come first! Do not sacrifice regular study or class hours for a job.

Of course, the ideal situation as a student would be to not have to work or to have a job that you really enjoy. However, sometimes we must balance the necessity of earning money against having our dream job when we are still students. A job can help pay for books, tuition fees, rent, as well as social activities.

Employment during the school year

Your current job

If you have the chance to stay at home during your studies, you may be able to keep your current job. By keeping this job, you avoid having to look for employment which, as everyone knows, can be quite nerve-racking.

There are, however, certain disadvantages in keeping the job you had in high school. The first disadvantage is the salary. Furthermore, you are limiting yourself in terms of experience and diversification. Today's employers attach importance to a candidate's acquired experience. It's beneficial for your resume to display a variety of jobs in diverse fields.

Working for your school

The administration of a post-secondary institution, depending on its student population, can require the participation of more than a hundred employees. What better opportunity for an institution to show that it has confidence in its programs than to hire its very own students? A number of positions are available to students with flexible hours and salaries.

• Where to look:  Generally, all students can apply for a position at the institution's placement office. You can also find some useful information by visiting the school's financial aid office or you can consult their Web site.

The private sector

There is generally a big market of private sector employers in a concentrated area around colleges and universities. The density of the student population means there is a demand for services that cater to students, and these services often rely on student staff.

There are advantages to earning your own money while gaining life and work experience. As students become more and more qualified, employers have no choice but to offer higher wages than employers who hire high school students. You might even have the chance to work nights or weekends, allowing you to concentrate on your classes during the week.

On the other hand, it is very likely that the private sector will be more demanding in terms of how many hours you have to work. The employer who hires and trains a student expects a certain level of commitment on your part. However, do not forget the real reason why you are in school: to study.

• Where to look:  Visit different businesses in person and present yourself to the owner or manager. Bring a copy of your resume to leave behind. If the person in charge of hiring is not there, ask when would be the best time to meet with him or her.

Co-ops and internships

As mentioned before, employers attach more and more importance to the diversity that a candidate can offer. Therefore, there are various partnerships between post-secondary institutions and private companies aimed at hiring students for a determined period of time, called a co-op placement or an internship.

These internships generally last one semester, a period during which the student will work for the employer in question. Students are usually paid for their work during that period. Therefore, you can acquire experience, establish important contacts and possibly accumulate a significant amount of money since wages are generally reasonable.

Perhaps the down side to co-operative education programs is the fact that you usually do not get credits for the work term. Therefore, for every co-op session, you delay your graduation date.

• Where to look:  The best place is your post-secondary institution. These programs are well administered and well managed. You will have to apply for the program, after which the administration will guide you through the hiring procedures.

Summer employment

Home for the summer

A certain number of students return home for summer to save money. Many of these students already have jobs waiting for them upon their arrival, which means they don't have to hunt for a job. For those who do not already have a job lined up, the steps for job hunting are the same as looking in the private sector during the school year. Simply present yourself at different businesses and offer your services for the summer. Try to find a job in a field that you will enjoy. After all, you will be spending most of your days there. Some jobs will have a relaxed atmosphere, while others, such as seasonal work, will be more arduous. It is up to you to determine which you will enjoy the most while still earning enough money.

Public service

Jobs within the public service are popular with students. Working for the government offers a number of different opportunities to students, such as part-time, full-time, summer or winter employment for the country's largest employer, the Government of Canada.

The public service offers a multitude of positions in a wide variety of fields. It offers good wages, regular hours for most positions, a chance to establish good professional contacts and the chance to explore the work world while being trained and gaining valuable experience.

• Where to look:  The best way to post your candidacy is to register with the inventory of the Federal Student Work Experience Program (FSWEP) at: www.jobs.gc.ca . Supervisors of the different governmental branches must choose candidates from the names found in the inventory.

Private sector

This topic was addressed in the Employment During the School Year section. The procedure is the same except for the fact that you do not have to worry about conflicts with your school schedule.

Placement agencies

Placement agencies have also gained popularity over the last few years. These agencies are private companies that other companies can consult to find candidates that fit certain criteria. The agency then refers the candidates, from its inventory, who meet the requirements set by the companies.

Putting a Roof Over Your Head

What about housing?

One of the biggest decisions you have to make once you are accepted into a post-secondary institution is where to live. Whether you are a part-time or full-time student, you will have a number of choices regarding housing. Each option has its advantages and disadvantages. It's a question of choosing the best option for you.

Some students live in university dorms, others in off-campus housing, or even in the family home. Today, post-secondary institutions and certain developers are well equipped to satisfy the multiple needs of students. It's up to you to choose among the numerous choices available.

Where can I live?

Living at home

You may choose to live at home during your studies, especially if you have family commitments or commitments towards an employer and if your school is not too far. You could decide that this is the most comfortable and, of course, the most economical choice available.

Universities now offer such a wide variety of courses and programs that it is more and more likely that the program of your choice will be offered by your local college or university.

Also, the Internet now makes it possible to earn a diploma or a certificate by studying at home.

Despite the numerous advantages of living at home, many students choose to leave home. Sometimes it is in search of independence or of a lifestyle in keeping with the post-secondary experience. Other times, in order to begin your studies in your chosen field, you must attend a college or university in another city. Whatever the reason, you will have to make important decisions to keep your finances on track.

Leaving home: leaving on the right foot

The choices

What are dorms?

Dorms, or residences, are buildings maintained and managed by colleges and universities entirely dedicated to student housing. A dorm can house dozens, hundreds and, in some cases, thousands of students from all over the world. These buildings often include furnished single or double rooms and common washrooms, meeting rooms, laundromats and, in some cases, kitchenettes that can be shared by a group of students. There are also dorms that offer meal plans. This is a big advantage as well as a relief for those who worry about making meals.

In many places, priority is given to first-year students for room choice. However, regardless of what year you are going into, apply without delay to ensure that a place is reserved for you. The dorm of every college or university has its own procedures for obtaining a room. Contact your school's housing services to learn more about the advantages offered by dorms.

If you wish to ask for certain special services, you will find that most dorms are equipped to handle different needs. However, the number of places available for people with special needs is limited. It's better to apply for these services when you apply for admission. Again, for more detailed information on the steps to follow, consult your school's housing services.

Renting off-campus

Another possibility is to rent an apartment off-campus. This option works if you're looking for independence and freedom. Consider renting an apartment with a group of friends or renting a room by yourself. Consult your school's housing services; they can help you find an apartment. There are often many apartments near campus.

Dorms vs apartments

When choosing housing, make your decision based on comfort, availability and financial capabilities. Leaving the family home comes with a feeling of independence and responsibility, but it can also have an emotional impact. Make sure you choose a place where you will feel at ease.

Life in a school dorm has advantages that allow those who are leaving home to adapt to an independent lifestyle without being hit with too many responsibilities: 

• Settling accounts:  Accounts are normally settled with one monthly payment in dorms. This payment includes all living costs, that is all bills, services, etc., are included in one bill. This monthly payment is paid to the dorm administration, who makes sure all services are included.
  
• Maintenance:  Dorms are maintained by the school. You don't have to worry about maintenance or repairs.
  
• Proximity to classes:  Dorms, in most cases, are very close to classes — usually a few minutes walk. This eliminates transportation costs and can make it safer to get home at night if there are other sutdents around or if your school offers a walk-home service.
  
• Emphasis on student life:  Obviously, the post-secondary experience includes a social element. Life in a dorm allows for an easier integration with organized activities, introduction sessions and the simple fact of being surrounded by other students.
  
• No lease to sign:  Generally, a dorm room is rented for four or eight months in accordance with the school year. This is a big advantage, because apartments almost always come with a 12-month lease. Students who live in an appartment but return home during the summer will have to find someone to sublet for the summer or have to pay even though they do not live there.

If you want a completely independent life along with more responsibilities, living off-campus is the choice for you.

• Independence:  All maintenance and account management responsibilities are yours. However, these responsibilities also come with the freedom of choosing for yourself in order to shape your lifestyle the way you like it, while remaining within your budget.
  
• Making it your home:  Living off-campus means you can maintain and decorate your place as you see fit, as long as the owner does not object. Making it your home gives you a sense of belonging and accomplishment.
  
• Sharing fees:  Most students living in apartments have roommates. This presents the advantage of possibly sharing rent and other services (cable, telephone, etc.) which lowers the costs to each individual. Be careful when choosing a roommate. If that person does not pay his or her share of the rent, leaves or damages the premises, you could be solely responsible for paying amounts that are due or damages.

The lease

A lease is a tenancy agreement in which the landlord and the tenant agree on the costs and the obligations concerning the premises. This agreement requires the tenant to pay the amount agreed on in the lease on the first day of every month and obligates the landlord to offer the housing described in the lease. It also ensures that the landlord follows the rules of the province and municipality. For example, the plumbing and the electrical system must be adequate.

The lease indicates the length of the rental agreement (determined or undefined), the name and the address of the landlord and the tenant(s), a description of the unit, the amount of the rent and the services included in the rent.

The lease must be signed by both parties, and copies must be distributed to each party.

Housing laws vary from one province to another. It is wise to consult the housing ministry in your province.

• Note:  When signing a lease, you are bound by its conditions. It is difficult to free yourself of those obligations. Be certain that you are ready to accept. On the other hand, the same applies to the landlord; who must also respect his or her obligations. That is why it is important to keep a copy of the agreement in case of a dispute or a disagreement.

Searching for an apartment

Looking for an apartment can seem like a long and difficult process. However, there is a large variety of services and sources available to make this task easier.

If your choice is to live in dorms, only the school administration and its housing services manage the rent of its units. As mentioned earlier, because places are limited, it is better to contact them as early as possible.

If you want to live off-campus, you will have to start searching for what will eventually become your very own palace. There are a number of sources to help you in your search: 

• Personal contacts: Friends, family or anyone who might know someone or know of places to rent.
  
• Newspapers: Many landlords post advertisements in local newspapers indicating available units with the number of rooms, prices and contact information. This is often a good way to find an apartment because all you need to do is make a phone call and an appointment to visit the unit.
  
• Posters: Many are put up by people looking for roommates or subleasees. Look for notice boards around campus and at local businesses.
  
• The post-secondary institution's housing services: All of these services have information banks made up of available units off-campus. Many of these institutions even own several buildings off-campus that can be rented only to its students.

Tips

When you are looking for housing, it is essential that you ask several questions and that you get well acquainted with the location before committing yourself. Visit the apartment during the day and bring a parent or a friend to get his or her opinion. Always turn the tap on to make sure there is running water. Open a window to make sure that it is not stuck. Here are some examples of questions you can ask: 

1. How long is the lease?

2. What is the average cost of the utilities (heating, hydro, cable)?

3. Is the apartment warm?

4. Are the household appliances included?

5. Is it a safe, noisy or busy community?

6. Who else lives in the building? Are they students, retirees, office workers, etc.?

7. Where can I do laundry?

Request that the locks on your unit's door be changed before you move in.

Moving

Obviously, the easiest way to move is to hire a moving company. This involves the least amount of work but it is also the most expensive. Rates depend on the amount of rooms, the number of things that need to be moved and the travelling distance.

However, if you have to travel a long distance, it would be wise to consider this option since moving companies are insured and equipped to meet your needs. Many of them even offer student rates, something you can ask for when ordering the service.

If you choose to consider moving services, reserve a vehicle in advance, especially if you are moving in July or September.

• For more information about moving, visit Industry Canada's Office of Consumer Affairs' Web site at: www.consumer.ic.gc.ca/moving

The alternatives

The most economical way, if possible, is to move yourself or with the help of friends and family. Getting help from them can also serve as an occasion to get together. If you have friends that will also be moving, you can each take your turn at helping one another move so everyone gets help.

If you are willing to do the work yourself but you do not have the required vehicles or equipment, there are several truck and trailer rental companies. Once again, rates depend on the travelling distance and the duration of the rental. Rates are usually lower on weekdays and higher on the first day of the month. It's possible to save some money if you can move when it will cost less. Keep in mind that in order to rent a truck or a trailer you have to be at least 25 years of age or older. One of your parents may have to rent and drive the vehicle for you.

Service connection

Once you have decided where you will be living, you must choose the utilities and services you want and get in touch with the different companies offering them.

• Electricity:  This service is more of a need than a choice. Do not forget that hot water, and some heating systems, use electricity.
  
• Heating:  This is also a necessity. Ask the landlord what kind of a heating system is used in the building and which company is the supplier.
  
• Telephone:  Today, many people have cellular phones. But most people still have a regular telephone. Work out how the bill will be paid with your roommate(s).
  
• Cable:  Some students think that cable is not important to them. Either they don't expect to watch television regularly or they prefer spending their money elsewhere. This is a personal choice.
  
• Internet:  Most post-secondary institutions have computer laboratories with Internet connections available to students. If you do not order Internet access at home, you will still have access to it. But once again, it is a personal choice and you might decide that it would be more convenient to have Internet access in your room or apartment.

Warnings

• In order for everything to be in place when you move in, make sure to order all the services you want at least two weeks before the moving date.
  
• When opening an account for heating, electricity and telephone services, the companies often require a deposit of approximately $100. This amount will be credited to you when the account is closed.
  
• You can always add or eliminate services. If you realize something is missing, you can always contact the company. However, if you have signed a contract and you want to cancel a service, you will probably have to pay a penalty fee.
  
• It is very important to pay your bills on time. The supplier has the right to cut off your services without notice if you wait too long to pay for them.

Tips on how to save on service costs

Heating often represents up to 50% of residential energy consumption. This is a good place to save. Here are some tips: 

1. When leaving the apartment, lower the heating to about 17 degrees, turn off the lights and make sure to turn off your appliances (computer, television, etc.).
   
2. Windows are the source of 20% of heat loss. Make sure they are closed properly and that they are well insulated. Ask the owners to install a plastic film along the windows during the winter months.
   
3. Wash your dishes by hand instead of using the dishwasher.
   
4. Hot water is responsible for another 20% of your bill. Avoid taking long showers too often.