How to make enough money to pay for university: High School Students

Money is a wicked resource; it can make or break, it can rise and fall, it can do many things or do nothing at all, and yet, it is a piece of paper (or a synthetic polymer if you’re in Canada) that runs the entire scheme of social institutions, investments, purchases, debts, etc.

How fascinating is it that though it is of high importance as it pretty much rules everything around us (and arguably, our own actions), we are not taught in schools about how money has a time value. Imagine if kids were taught personal finance from a young age, making it as mandatory as gym class, or English, surely those are also important topics, but would it not also be fair to put kids into the right investment shoes? I suppose what has happened is that the state, and the education system has left this to the parents as their responsibility, which is acceptable because school does teach us quite a few other extremely valuable skills like communication, socializing, writing, reading, mathematics, which without we could not even understand how to properly use money. In essence, this is mere idealistic visualization of a future of kids, that from a young age, understand investments and how to make money work for them. In addition, it is important that schools align themselves with the market, and teach ready to use skills that make it easy for kids to get part time or full time jobs while they are say, in high school, and for those four years, they save money for university.

Let’s take an example, in the 11th grade when they are of legal working age, a student gets a part time job that pays them minimum wage of $15/hour and they work after school from 4:00 pm to 6:00 pm Monday to Thursday and Saturdays 1:00 pm to 7:00 pm. They would work a total of 14 hours per week and make $210.00 in gross income, after paying taxes in the province of Ontario, they would take home a net pay of $199.45 per week. At the end of the month, they would have a total of $797.80. After one year, 52 weeks of work, the 11th grade student would have $10,371.40 of net pay after taxes. This would mean that if they worked grades 11 and 12, while achieving high marks in school, under a flexible part time employment schedule of 14 hours per week, they would take home a net pay of $20,742.80, leaving them with almost half of the cost of university. If they are keen on doing an investment of time and money, they could take a victory lap, working the same hours, and earning an extra $10,371.40 per year, leaving them with a total of $31,114.20 to either invest in university, post secondary studies, travelling, a business idea, etc. This is the type of calculations that school does not do a good job of teaching us, but we could benefit greatly if schools worked alongside industry to help students achieve financial goals and independence from a young age by giving them part time paid work, while maintaining high marks and a valuable savings account. This also, does not take into account if the student invests the money or say, puts it into a GIC for a period of two years. What amount would they have then? If after year one, they paid themselves $2000 for personal expenses and entertainment (a decent sum for a young person) and put the rest into a GIC for two years, they would earn $424.44 dollars with an interest rate of 2.25% and with a three year GIC they would earn $661.58 at 2.30% interest. If they simply saved the whole amount of income after two years of work because their parents agreed to help them with expenses, they would accumulate $1,415 of interest in the first year at 2.25% and $2,196.62 with a three year GIC at 2.30%. Not bad, for a young person to accumulate that amount of money at such a young age with limited responsibilities to end up with a five figure bank account when most young people would be in debt or not paying attention to the time value of money.

Helpful resources and calculators:

1. Interest calculator https://www.getsmarteraboutmoney.ca/calculators/compound-interest-calculator/

2. What is a GIC? https://en.wikipedia.org/wiki/Guaranteed_Investment_Certificate