Inflation is straining the finances of post-secondary students, significantly driving up the number who will now be relying on their parents for a place to live and the funds to complete their schooling, according to the RBC 2023 Post-Secondary Students & Financial Readiness Poll.
The poll compared responses of post-secondary students in 2023 and 2013 and found that almost half (47%) indicated they will be living with their parents this school year, compared to 36% 10 years ago.
In addition, poll findings underlined the greatly increased dependence of today’s post-secondary students on their parents’ money, with 43% assuming their parents will take care of their financial needs, compared to only 29% in 2013.
“It’s important to note, though, that these students aren’t just looking to their parents for financial support. They’re relying on their parents for help in developing their financial goals too,” explained Jason Storsley, who leads the Youth and Young Adult team at RBC as senior vice president, Everyday Banking & Client Acquisition. “Family conversations about money are invaluable. And in our social media age, it’s great to see this family connection remains as strong as ever.”
Poll respondents were also thinking through how they could help themselves financially during their time in post-secondary education, including:
- Working part-time while going to school (49%)
- Reducing non-essential expenses (47%)
- Preparing a budget and sticking to it (45%)
- Regularly monitoring where money is spent (45%)
- Carefully avoiding debt (40%)
- Looking for student discounts everywhere they shop (40%)
- Paying with cash or debit wherever possible (25%)
Post-secondary students are looking at how to keep expenses down after they graduate too, by pushing out some of their post-graduation major life goals. As just two examples:
- While more of these students indicated they plan to buy a home after they graduate (83% in 2023 versus 74% in 2013), more now will be delaying that purchase for five years or longer (43% versus 25%).
- Two in three (66%) plan to marry (versus 52% in 2013), but the percentage who are pushing that timeframe out to five years or longer has doubled (40% versus 20%).
Regardless of their cost-cutting efforts, 45% expect to graduate with up to $20,000 in debt – a big increase from 30% who expected to have the same amount of debt in 2013. However, more of this year’s student body expects to pay that debt off within up to three years (59% versus 39%), and fewer expect to have debt greater than $40,000 (9% versus 15%).
A key challenge in managing costs while at school and paying off debts post-graduation: The vast majority (96%) of poll respondents admitted they were not good at handling money, with 88% commenting they still had a lot to learn about managing finances and 54% stating they were much better at spending than saving.
“Here’s where we can provide support,” added Storsley. “We have tips and free resources that anyone can readily access online. And in all our branches, we have advisors ready to help students get on track with their finances while they’re in school and stay on track with them after they graduate.”
To help de-stress the start of the school year, RBC has also put together its biggest ‘back to school’ bonus package ever. The 2023 RBC Student Banking Bundle offers post-secondary students up to $275 in value – including $100 for simply opening a no monthly fee RBC Advantage Banking account for students – and the RBC International Student Banking Bundle includes a special offer for international students.
For more information – including tips, advice and resources – please visit the RBC Student Hub.
RBC 2023 POST-SECONDARY STUDENTS & FINANCIAL READINESS POLL
FAST FACTS
Selected Findings – 10-Year Comparison (2023 versus 2013)
|
RESPONSE |
2023 |
2013 |
|
|
Will live at parents’ home while going to school |
47 % |
36 % |
|
|
Assume parents will take care of financial needs |
43 % |
29 % |
|
|
Rely on parents for help in developing financial goals |
69 % |
68 % |
|
|
Intend to buy a home more than 5 years after graduation |
43 % |
25 % |
|
|
Plan to get married more than 5 years after graduation |
40 % |
20 % |
|
|
Still have a lot to learn about managing finances |
88 % |
72 % |
|
|
Are much better at spending than saving |
54 % |
50 % |
|
|
Expect to graduate with debt ranging up to almost $20,000 |
45 % |
30 % |
|
|
Expect to pay back all student debt within up to 3 years |
59 % |
39 % |
RBC 2023 POST-SECONDARY STUDENTS & FINANCIAL READINESS POLL
FAST FACTS
Selected Findings – 2023 National and Regional
|
RESPONSE |
NAT’L |
BC |
AB |
SK/MB |
ON |
QC |
AC |
|
Will live at parents’ home while |
47 % |
45 % |
55 % |
47 % |
46 % |
52 % |
32 % |
|
Assume parents will take care of |
43 % |
46 % |
42 % |
52 % |
44 % |
41 % |
37 % |
|
Rely on parents for help in |
69 % |
67 % |
77 % |
72 % |
71 % |
60 % |
68 % |
|
To manage finances while
|
49 % |
46 % |
53 % |
40 % |
51 % |
50 % |
46 % |
|
|
47 % |
54 % |
42 % |
39 % |
43 % |
52 % |
57 % |
|
|
45 % |
37 % |
54 % |
32 % |
46 % |
46 % |
48 % |
|
|
45 % |
48 % |
52 % |
42 % |
43 % |
44 % |
49 % |
|
|
40 % |
45 % |
47 % |
34 % |
39 % |
35 % |
43 % |
|
|
40 % |
47 % |
42 % |
30 % |
44 % |
32 % |
34 % |
|
|
25 % |
32 % |
23 % |
19 % |
28 % |
18 % |
30 % |
|
Expect to graduate with debt |
45 % |
40 % |
41 % |
50 % |
48 % |
46 % |
43 % |
|
Expect to pay back all their |
59 % |
55 % |
56 % |
58 % |
57 % |
66 % |
53 % |
In addition to starting early, it’s also helpful to leverage the right tools at the right life stage. RBC offers a variety of tools and resources that parents should use when considering helping with their children’s finances:
- Kickstart the conversation – With post-secondary students sharing that their parents would be their primary source for help in developing their financial goals, it’s never too early to start having these conversations. Including an RBC advisor in these discussions can provide students with valuable tips and resources and help them learn more about managing their money, ways to use credit effectively and the value of saving and investing.
- Teaching real life money management skills from a young age – RBCx Ventures’ Mydoh is a youth money management app and Smart Cash Card (a digital and physical Visa Prepaid Card) that makes it easy for kids and teens to make smart money choices that fuel their passions, while giving parents transparency and oversight. And with the Mydoh app, there are two different experiences customized for both: while kids and teens gain real life money skills for the cashless and digital economy, their parents can instantly transfer money, coach and guide, or just keep an eye on things. With Mydoh by Me, kids and teens can even design a custom Smart Cash Card, allowing them to express their unique personality.
- Thinking critically about finances – As post-secondary students are surrounded by so many sources of information, having the know-how to sift through what is accurate and what is misleading is crucial to learning how to spend, save and invest wisely. That’s why RBC has collaborated with McGill and The Globe and Mail to offer a free Personal Finance Essentials course to help Canadians enhance their financial knowledge and skills.
- Learning to invest – Increasingly, post-secondary students are investing for both short- and long-term goals, but as investing comes with risks, it’s important to learn how to do so in an informed way. RBC Direct Investing offers a Practice Account, available at no cost to RBC Online Banking and RBC Direct Investing clients, as a risk-free way to test out investment strategies and place buy and sell orders – using $100,000 practice dollars. In addition, the Inspired Investor Trade magazine posts timely information and insights, including helpful guides on a variety of topics in the Investing Academy.
- Preparing for the future – RBC Future Launch provides access to programming, tools and resources designed to help young Canadians gain new skills, grow their network, get work experience, and enhance their mental wellbeing.