Will Student Debt Measures Offset Cost of Living in Yellowknife?Nov 26, 2015
As a bankruptcy professional in Yellowknife will tell you, there have been many recent measures announced surrounding student debt in the Northwest Territories. In June, the territorial government announced a $2,000 Northern Bonus, which would be paid annually toward reducing the student loan debt of any recent grad working in the Northwest Territories for up to five years. And students from the NWT who return or stay home after their post-secondary studies will see thousands of dollars in remissible student debt forgiven for each year spent in the territory. These measures are aimed at reducing population shrinkage after the NWT saw its largest decline since 1999, whereas both Nunavut and Yukon had population growth.
There is no doubt that the Northern Bonus will be an incentive for recent grads with student debt. But it won’t pay off the full cost of their education—the average student loan debt in Canada is around $27,000. And with the elevated cost of living in Yellowknife, including an average rent of $1,682 per month (for a two-bedroom apartment) and some of the most expensive internet services in Canada, some recent grads could find themselves stretched thin and considering debt relief options such as consumer proposals.
Consider the costs of living on your own
For recent grads who’ve just finished school, and are looking to return to Yellowknife, the Financial Consumer Agency of Canada (FCAC) offers a full tutorial about moving out on your own. This covers the costs of moving out, renting versus buying, rental agreements and more, and also includes worksheets to help you track expenses and evaluate properties. November is Financial Literacy Month in Canada, sponsored by the FCAC, and a good time to take a look at your financial situation and improve your financial literacy.
Do you know how to budget?
With the price of groceries in Yellowknife rising twice as fast as the rest of Canada, budgeting becomes even more important for a recent grad. Once again, the FCAC is here to help with a comprehensive budget calculator that lets you add up the cost of all your expenses compared to your income and savings to see how much you’ll have left over at the end of the month. There is even a section dedicated to debt, where you can keep track of your student debt payments on a monthly basis. If you’re looking to improve your financial literacy, building a budget is a good place to start.
Bankruptcy isn’t the only way out of debt
Across the country, Canadians are seeing their debt increase, with the average household debt ratio hitting 164.6 per cent, or $1.65 of debt for every dollar we earn. Even with the government’s student debt relief proposals, consumer debt can still be a concern, and there are several steps you can take to address it. The FCAC website offers some solutions, and you can also look into credit counselling or debt consolidation loans.
It might be a good idea to visit a debt help professional in Yellowknife if you find yourself struggling to make ends meet. But that doesn’t necessarily mean filing for bankruptcy—there are other alternatives to consolidate debt and reduce your monthly payments, such as consumer proposals. With a consumer proposal, you will calculate how much you can afford to pay toward your debts each month and develop a timetable to pay off creditors over a certain number of months or years. Once the proposal has been filed, your creditors can’t take any action against you, and then you can add the consolidated debt payment to your monthly budget instead of keeping track of multiple consumer debts.
Do you have any spending tips for coping with the cost of living in Yellowknife? Are you taking a look at your finances for Financial Literacy Month? Share your thoughts with BDO by joining the conversation on Twitter using #CountMeInCA #BDOdebtrelief