The majority of students expect to achieve several key life moments – own first car, draw a great salary, pay off student debt, get married — within the first five years after graduating from post-secondary school, according to the 2016 RBC Student Finances Poll.
Yet, first- and fourth-year students differ on how quickly they will achieve some of these milestones. First-year students are more confident than their fourth-year counterparts that, within five years of graduation, they will:
- Earn their first $100,000 (64 per cent versus 55 per cent, respectively)
- Settle down with a partner (55 per cent and 49 per cent, respectively)
- Have kids (40 per cent and 29 per cent, respectively).
“A lifetime passes from the moment you receive your acceptance letter and when you graduate from post-secondary school. The survey results show that goals and priorities evolve as perspectives and realities come into focus the closer you are to finishing school,” says Laura Plant, director of student banking, RBC.
Universal focus, conventional view
Overall, the survey suggests undergraduate students have a conventional view of when they will check off key milestones. Students at all levels have a universal focus on paying off debt before buying a home, getting married or having children. Here is their post-graduation timeline:
- Within first year: Half of students (51 per cent) look to move out of their parents’ home
- Within two years: own a car (55 per cent)
- Within five years: 78 per cent of students expect to pay off student debt. Almost half (49 per cent) expect to buy a home in that time frame, while 53 per cent think wedding rings will be exchanged.
“I admire that most students have a roadmap for their life moments and that they aren’t afraid to have it all. Earning the first $100,000 is a huge goal and could go a long way to achieving the future students envision for themselves. The key to achieving their plans in a realistic way is to have a detailed financial game plan and to regularly review those plans as life happens,” says Plant.
No matter how big or small the goals, here are four financial habits that will set up students for personal money management success in and out of school, according to Plant:
- Create a budget: Making a personalized financial plan is about you and your priorities. Knowing exactly where your money is going will help you stay on track for your short- and long-term goals – whether it’s the latest gadget, a spring-break getaway, or planning a wedding.
- Save: Saving on a regular basis is better than not saving at all. Start small and increase the amount as your income grows. Bonus tip: let your money work harder for you by setting up automatic transfers from your daily chequing account into a separate high-interest savings account or guaranteed investment certificate to be used towards your big plans.
- Build credit: Used wisely, a credit card is a powerful way to build a credit history. Showing that you can responsibly pay back borrowed money will come in handy when applying for a loan to buy bigger things like a car or a home.
- Check-up: Regularly review your progress and make adjustments to stay on track.
More resources and tools for students and their parents are available at RBC Student Solutions. It’s never too early to learn about budgeting and finances, find out more about your financial future.
About RBC Student Finances Poll
The online study, conducted by independent research company MARU | VCR&C, was of a nationally representative group of students enrolled in a Canadian college or university from March 14th to March 24, 2016. The total sample size was 1,507 with a margin of error of ±2.5 per cent.
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RBC helps communities prosper, supporting a broad range of community initiatives through donations, community investments, sponsorships and employee volunteer activities. In 2015, we contributed more than $121 million to causes around the world.
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