Craig Norris from CBC K-W’s The Morning Edition interviewed founder, Ryan Chen-Wing on August 25. In their discussion, Ryan explained the benefits of creating a budget and also shared tips on how students can stick to their budgets for their upcoming school year. He also discussed why it is crucial to plan budgets ahead of time and to be honest about spending habits. The transcript of the interview can be viewed below.

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Read the full article on the CBC K-W website.

Transcript of CBC K-W Interview:

Craig Norris: A new poll released yesterday by CIBC found that over half of university and college students will run out of money before their school year ends. That means many students are going to be looking for part-time jobs or coming to the bank of “mom and dad” for loans, but the school year doesn’t have to end with students in the red. Ryan Chen-Wing is the founder of the Waterloo Banking Project – a financial start-up run by students for students at the University of Waterloo and the Wilfrid Laurier University. He says, starting the school year with a good budget is all that it takes to stay in the black. To tell us more, he joins me in the studio this morning. Good morning, Ryan.

Ryan Chen-Wing: Good morning, Craig.

Craig: Very easily said, “Oh, I gotta make a budget.” Is it that simple to just make a budget?

Ryan: It’s simple, but it may be difficult right? I think people feel some reluctance to face up to their finances, but it doesn’t have to be that way and we try to get students talking and thinking about it. It really doesn’t have to be a taboo subject and it’s very important. A little work you put in before the school year starts can really pay off in terms of less stress, and being able to focus on your studies for the rest of the year.

Craig: When we run a household, you often do it on a budget, but what are the unique budgeting challenges that students face?

Ryan: One big difference between the situations students face and what a normal household might face, is that they don’t necessarily have a regular full-time income to cover their expenses. So they’re not just looking at the pay-period for two weeks, or a month, but they have to look at the whole year. Another important thing they have to keep an eye on their budget and how much debt they can take on over their whole degree, and that makes it more important to plan ahead even though students don’t have that much experience.

Craig: So why do you think then that so many students find themselves short on cash when spring exams roll around?

Ryan: Well, it’s just that because their budget period is so long and often its’ hard to plan so far ahead. That’s part of what we try to do to help students, but if parents are concerned, or students are concerned about their peers, it’s important to start a conversation about it and that’s what we want to be a part of with Waterloo Banking Project.

Craig: When you say concerned, do you mean mental health issues and things like that? You’re worried that people are becoming too stressed?

Ryan: Not just that, but just concerned that they may be take on too much debt or not make financial decisions that match their values.

Craig: What kind of tips then do you give students when they come seeking budget advice?

Ryan: The very first thing is to face up to it, right? It’s better in the long run to take a look at your finances and add things up. Because if in September, I know I don’t have enough money to finish the term, then I can find a part-time job. If I don’t discover that on my own until November, then a lot of options are closed to me because that time has passed.

Craig: Where are students wasting the most money?

Ryan: It varies. A big part where students’ behavior ends up incurring more expenses is just in the discretionary spending. That’s not necessarily the biggest part of a students’ budget, but it’s the one where you can make the most difference with your behavior. Certainly there’s variation in the amount of rent you might pay. Once you’ve chosen your university and your program, you can’t change that much even though that’s a big part of your expenses. However, I think that when students’ look at their discretionary spending, whether they make their own dinner with food from the grocery store, compared to going out. There’s a big difference that can add up over time. A piece of advice I can give on that is having a separate food budget that’s grocery food, and not to take from that to go to the restaurant.

Craig: I am not steoreotyping students by any stretch of the imagination and you already know what I’m going to say, I can tell by the look on your face. And that is, what about entertainment budget? Vis-à-vis maybe going to bars and things like that.

Ryan: Well, certainly I think that that sort of things are important. IT’s important for students to socialize and fully take part in student life. And I’m not going to say to any student or any person that they can or can’t spend something. They have to make that decision and go ahead and do it if you enjoy it and if you can afford it. And you only know if you can afford it if you plan ahead, have a budget and track that expense. I myself have a so-called entertainment budget, I don’t call it that, I call it unrestricted. That can mean going to the restaurant, going to the movies, it can mean buying candy if I want, or even buying a beer. And that’s all in the same budget, and it doesn’t come from my food budget if I’m going to go buy a hamburger from a restaurant.

Craig: Do you think that it’s possible for students to stay solvent in the black only using cash flow and cash that they got from summer gigs?

Ryan: Not normally, co-op can help because normally those jobs are a bit higher paying and definitely full-time. But I think most students require student assistance from OSAP or other provincial student-aid plans and then it’s definitely important that they earn some money over the summer but I think student income could almost never cover the full cost of being a student.

Craig: So are part-time jobs just pretty much obligatory in a lot of cases?

Ryan: I think so, and even more so now that expenses are higher. In some ways it’s important for students to have almost any kind of part-time job because generally that’s good experience. In terms of being in a work environment and working with other people and working in a structure.

Craig: What can students do? It’s always good to finish a budget year with some money left over so what can students do during the school year and at the end of the summer to better prepare for the following year?

Ryan: So one thing is to track your expenses. So that’s a bit different than budgeting. It’s important to both plan ahead and project and set out how much money it makes sense to spend on different things over time. But then also, you have to track your spending against it. So, writing down and categorizing whatever you spend. There are programs out there that help you track your spending or you can download your transactions. I do it where I record it manually into a spreadsheet myself. You have to find something that works for you. But it’s definitely important to track your spending so you can look at your behavior against what you expected to do.

Craig: This is all great advice Ryan, thanks so much for this.

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