First and fourth-year university students have different expectations on major milestones after university, according to a recent Royal Bank poll of roughly 1,500 students.
The poll found that 64 per cent of first-year students expect to earn their first $100,000 in five years or fewer after graduation.
In comparison, 55 per cent of fourth-year students expect to do the same.
Forty per cent of first-year students said they expect to have children within five years of graduation, compared to 29 per cent of fourth-year students.
“I think what’s telling is that there is a lifetime that passes between first year and fourth year of university or college,” Laura Plant, Royal Bank’s director of student banking, said via email. “The future is not as straightforward as one initially thinks.”
Despite the gap for earning $100,000 and starting a family, students of both grades shared similar timelines for other milestones.
Fifty-five per cent said they expect to own a car within two years of graduation, and 78 per cent said they expect to pay off student debt within five years.
These are reasonable expectations for buying a car and paying off debt, said Chuck Grace, a finance lecturer at Western University’s Ivey School of Business.
He said the biggest issue facing young adults is buying a house, adding that it’s improbable for post-graduates to afford a down payment under normal circumstances in less than five years.
First-year Carleton University sociology student Reanna Rosso said her biggest worry after graduating will be debt, since she wants to go to law school.
“I’m going to be trying to save up as much money as I can,” she said of her financial plans for university.
She said she plans to get “a job in a nice city” and have kids within three years after law school.
Eric Nguyen, a fourth-year Carleton commerce student, said he has high hopes for his financial future after graduating and gaining more professional experience.
“I’m not too sure what type of salary I’m going to get,” he said.
“I thought that $100,000 was nothing, but ever since I started working co-op [with] the government and seeing how much people get paid in general, I realized that not everyone gets paid at that level.”
Nguyen added that hearing from mentors about their career paths made him “realize the true cost of how money is earned.”
Grace said the biggest mistake students and recent graduates make is they don’t save or plan ahead.
“Too many students graduate and wing it paycheque to paycheque,” he said. “Sometimes their eyes are bigger than their wallets.”
While he said personal finance is a large, often complicated subject, Grace recommended making a plan and setting goals.
That way, he said, students are more focused on reaching financial milestones and can adjust their plan when necessary.
