Ojas Chahal, 16yo. Kitchener, Canada
Are you prepared for the “real world”?
This is a question that many Canadian teens are faced with, and honestly, that many are unable to answer. The transition between high school and the “real world” in Canada is difficult to define, as teens may pursue a variety of different paths. For example, while some students opt for further education at a college or university, others instead choose to enter the workforce right away, or select a different route entirely.
A large problem concerning this transition is that many teens are uncertain of the path they want to follow after high school. Thus, it is also difficult for them to determine what will be required financially, because each path has different financial stipulations. This issue is propagated by the fact that career planning plays an insignificant part in the core school curriculum in Canada.
Often, when students sit down with counselors to chat about their postsecondary plans, they are asked questions such as “What type of degree do you want?” or “What type of institution do you want to attend?” and “ Do you have any experience with apprenticeship?”, which they cannot answer. Additionally, there is pressure from parents and other family members to follow a certain path, depending on socio-cultural contexts.
According to a study by Think Tank Canada 2020, the average teen spends approximately $29,568 CAD on higher education. In Canada, there isn’t really a state university system like there is in the U.S. For example, most universities are publicly funded, as education is a constitutional responsibility of the provinces. Private schools are relatively new and mostly at the undergraduate level. Consequently, the heavy expenses associated with attending private schools are not apparent to teens in Canada.
To ease the financial impact of postsecondary education on teens in Canada, the government provides student loans. In fact, about ¼ of full-time Canadian students participate in these student loan programs.
Yet, although the government provides loans to ease the financial impact of postsecondary education on teens, many teens do not understand the process of loaning. This is because most teens haven’t made any long term purchases by the time they finish high school, so they haven’t been exposed to the loaning process. This, coupled with the fact that career planning is an insignificant part of the school curriculum in Canada, leaves teens with a large gap in their level of financial preparation.
There are various potential ways to resolve this issue. I’ve listed some of the most prominent ones below:
Getting a bank account started and having a debit card. The importance of this action is that it will teach teens how finance works - for example, the concept of purchasing, as well as the role of financial institutions such as banks in our society.
Setting a budget for yourself. Even if a parent pays for your expenses, it’s essential to have a budget. A good way to divide your budget is according to the duration of the expenses: long-term (vehicles, housing, education), middle-term (clothing, groceries) and short-term (video games, films, music) purchases. The first steps in setting a budget should be to set some goals for yourself, and track your earnings. This will allow you to determine your budget more effectively. After setting a budget, you should track your expenses and see where you can save some more money.
Finding a personal finance website that works for you. If you’re not the most organized individual, there are many online sites that provide help with managing your budgets (e.g. Mint, Oink).
Start saving early. Expenses are usually lower for teens, so high school lends a great opportunity to beef up your savings, whether from an allowance given to you by other family members, or even a job you may have.
Linking to the previous one, getting a job. This is particularly difficult for teens because they already have so many things that they need to balance, such as school, extracurriculars, and other activities. However, teens who work not only have a better understanding of balancing their finances, but also balancing their time as well. In addition, apprenticeship opportunities are available for teens in Canada. These programs allow teens to focus on a career path that matches their skills/interests while also meeting the requirements of their high school diploma. The apprenticeship involves the completion of courses in selected fields, earning industry certifications such as first aid and CPR, and obtaining workplace skills through cooperative education placements.
Finding a mentor. Developing a connection with a mentor in your field of interest, such as healthcare, law or art, is important because a mentor usually has had many years of experience in their field. This This includes financial experience as well, for example, on how to manage your money.
Even though the lack of financial literacy in Canadian youth is a large issue, it is important that, as individuals, we consider taking some of the actions mentioned above. Even if it’s something as simple as reading blog posts like these, the steps we all take now will help us be aware of these issues and improve financial literacy for youth in the future.
Citations: Munro, Daniel. Skills and Higher Education in Canada. Canada 2020, May 2014, canada2020.ca/wp-content/uploads/2014/05/2014_Canada2020_Paper-Series_Education_FINAL.pdf.
Social Development Canada. “Government of Canada.” Canada Student Loans Program Statistical Review – 2015 to 2016 - Canada.ca, Government of Canada, 19 Apr. 2018, www.canada.ca/en/employment-social-development/programs/canada-student-loans-grants/reports/cslp-statistical-2015-2016.html.
Government of Ontario. Specialist High Skills Majors, Government of Ontario, www.edu.gov.on.ca/morestudentsuccess/SHSM.html.