“We’re pregnant and still have student debt!”

 

Balance debt and RESP

Most couples I know are full of good intentions as soon as planning a family becomes a real conversation. We want to ensure all our financial ducks are lined up neatly in a row before a baby, things like securing a good-paying job, buying a home, and paying off outstanding debts.

The delightful reality is that ‘you’ve got a baby-on-the-way’ news can come at some surprising and less-than-ideal financial times.

For instance, you might in fact find yourself pregnant and living in a tiny rented apartment, halfway through a graduate thesis and still carrying student debt from a previous degree. At least, that was the case for us when our first child was born.

I’m happy to tell you however that it’s more than possible to deal with your student debt and work towards a healthy family budget – including saving for your child’s own education.

Ways to save and pay down debt

Apply for debt-relief

Under the federal government’s Repayment Assistance Plan, students and graduates can get help to reduce the size of their student debt. Depending on factors like your household income level and the size of your family, you can apply for reduced monthly payments or no monthly payments at all. In some cases, a portion of your student debt can be ‘forgiven’ entirely by the loan provider, shrinking the amount you’ll have to pay overall.

Consolidate debt

If you’re carrying more than one student loan, and any other large debts like outstanding credit card balances, it’s a wise idea to see if you can put them all together under one low-interest loan, such as a line of credit. If you own a home, or are thinking of buying, you can also look into consolidating your debt with your mortgage, for one monthly, lower-interest payment.

Deduct at tax time

Students and families can benefit from lots of tax breaks when it comes to filing their income tax every year, and your student loan is no exception. Don’t forget to check if you can claim a non-refundable tax credit for the amount of interest paid on your particular student loans.

Tighten your budget

It’s worth noting that until your student debt is paid off, making some budget-friendly changes to your spending and savings habits will help you get there faster. From shopping for the arrival of a baby to buying groceries and even travelling on vacation as a family, there are plenty of ways to trim costs and save money – ensuring you can pay off that debt and live affordably with children long after it’s gone.

My final piece of advice to anyone expecting a baby and who still has student debt on board is: “Don’t panic”.

Two of my kids were around to see their dad get his PhD, just like I got to see my own father cross the stage at his grad school convocation when I was five years old.

And just like my parents and plenty of other families we know, we’ve made student life and our student debt a distant memory, while establishing a healthy budget and showing our children the value of a post-secondary education at the same time.

You’d almost think we planned it that way.

Carmen Kinniburgh

Carmen Kinniburgh is a freelance writer and editor in Thunder Bay, Ontario, covering topics as diverse as parenting, Canadian science and research, local business profiles and federal initiatives to protect endangered species. Born and raised in Alberta, Carmen has also lived in Southern Ontario and Manitoba, where she worked as a professional communicator for universities and national health charities. An avid reader and novice-but-determined cooking enthusiast, you’ll also find her hiking, camping, canoeing and globe-trotting with her husband, three kids and the family dog.

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