Financial Literacy: Your Guide to Budgeting, Savings, and Taxes

Being a student here at Waterloo, there are many expenses to account for. From tuition, rent, textbooks, and more, learning how to be more financially literate can be a great help to make your undergraduate experience easier.

The recent financial literacy event, “Budgeting and Tax Workshop for University Students” hosted by students from the University of Waterloo’s School of Accounting and Finance helped students learn how to effectively manage their money. If you were unable to make it to the workshop, here is a recap of what you missed… 

Budgeting: 

• Budgeting is the process of creating a plan for your income and expenses 
• A budget summarizes all your inflows and outflows, this is the money that is coming in and out of your account.  
• The purpose of a budget is to help you understand where your money is coming from, where your money is going, how much you are saving, and how to reach your financial goals.  
• Your budget can include essential needs, educational expenses, hobbies/entertainment, and your wants. 
• You can use this template to start budgeting. Note you will need to sign in with your UWaterloo email to access it.  

Your Guide to Savings Accounts: 

• Tax-Free Savings Account (TFSA): a tax-free savings account used for long term savings. TFSAs have an annual contribution limit of $7,000/year. You can check your TFSA contribution room through your Canada Revenue Agency (CRA) My Account.  
• First Home Savings Account (FHSA): a registered savings account for first-time homebuyers to save for a home with tax benefits. You can only carry forward up to $16,000 of unused contribution, however, your investments grow tax-free.  
• Registered Retirement Savings Plan (RRSP): a retirement savings account with tax deferred growth.  Here your investments also grow tax-free.  
• Investment Accounts: a long-term account for your investments. This account has no annual contribution limit and no restrictions on withdrawals. 
• Your Bank Savings Account: a low-risk savings account with no annual contribution limit and no restrictions for withdrawals. This earns minimal interest. 

Financial Goals and Savings Accounts: 

• Financial planning involves managing money for immediate and future needs 
• Short-term Goals: can include covering rent and paying off your tuition. For short-term goals it can be helpful to open up a savings account and to start small, working your way up to the amount needed. 
• Long-Term Goals: can include paying off student loans, and larger purchases. You can save for long-term goals using a TFSA, investment accounts, your bank savings account, FHSA, or RRSP. 

Filing Your Taxes: 

• Around March-April, we receive tax slips from employment income (T4s). April 30th is the due date for personal taxes and payments. It is important to know that if you file late, the CRA will charge interest.  
• The most common tax slips include your Employment Income (T4), Investment Income (T5), your Tuition Slip (T2202), and your scholarship and bursary income (T4A).  
  • You can learn more about what those are supposed to look like here: Budgeting and Tax Workshop Handout. 
• Tuition credits are available for students. These reduce taxable income based on eligible tuition fees. It’s important to file taxes, especially as a student, to ensure you get the benefits and credits you’re eligible for! 
• You can find resources at Waterloo to help with your taxes here. 

General Advice: 

• Use Budgeting Tools: there are plenty of apps, spreadsheet templates, or budget plan resources you can use! Use this template to start budgeting. Note you will need to sign in with your UWaterloo email to access it. 
• Take Advantage of Student Perks: save money by using student discounts in stores and for subscriptions when you can. You can check out a list of all our deals at WUSA Member Management. 
• Have an Emergency Fund: work towards building an emergency fund with 3-6 months of expenses for unexpected situations. 
• Use Free Resources:  
  • Accounting and Finance Student Association (AFSA) Tax Clinic offers free tax filing for students. 
  • The CRA has a page dedicated to helping students file their taxes and answering commonly asked questions like why filing a return is important and more information about tax credits (aka free money) for students. They also have dedicated resources for international students.  
  • You may be able to go to a community tax clinic organized by the CRA if you have a modest income and a simple tax situation. Click here to Find a tax clinic.  
  • Check out the handout for information and tips: Budgeting and Tax Workshop Handout.

Managing finances effectively as a student sets the foundation for a secure future. Whether it’s budgeting wisely, saving for emergencies, or understanding taxes, these financial skills are invaluable for long-term stability. 

We hope this crash-course on financial literacy helped you become more informed about your finances! 

Alexandra Minard 

Communications Assistant