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Making a budget helps beat debt
Rodney Noriega had a scholarship during his first year studying for his business degree at Simon Fraser University in British Columbia. But after that, he needed student loans to continue his education.
"Usually they would give me more than what I needed, so I spent it on lavish things. In my first year, there were a lot of credit card companies trying to get me to sign up for them. Cell phone companies also had these student packages that sounded good. Later on, I realized those are dangerous because I wouldn't have the money to support myself and pay off whatever money I owed to them."
Rodney says that many people his age have a lot of difficulty making sacrifices and thinking for the long term. They enjoy immediate gratification and don't think about the consequences their spending habits might have on their financial situation. Rodney admits his financial situation is ironic since he studied accounting. But he thinks real life application is a whole other story. "I was not educated in terms of how to spend my money, how to make budgets and how to discipline myself," he says. "I didn't have a job right after graduation and I was concerned as to whether or not I was going to be able to pay off my student loans right away—and interest was adding up."
Then Rodney discovered the Financial Consumer Agency of Canada's (FCAC) website fcac.gc.ca. Its tip sheets How to Beat that Debt, Before You Sign Any Contract: 10 Things You Need to Know, and Making a Budget and Sticking to It, not only taught him benefits and risks of credit cards, but they also helped him learn to budget and reduce his debt significantly.
Rodney’s testimonial was recently featured in a video Success Story produced by FCAC.
Source: Financial Consumer Agency of Canada (FCAC)
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