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This is Why Side Hustles are the New Student Debt Destroyer

There’s a generational challenge happening these days in Canada, and student debt is a big part of it. Millennials are graduating with more debt than in the past; today, the average post-secondary student leaves school owing over $28,000. This is daunting, especially if you’re unable to find work right out of school.

In Newfoundland, there are some student debt saving measures for current students — provincial grants have replaced loan programs, creating a more forgiving system for many who would seek government assistance. But that amount does not necessarily cover the full cost of tuition, books and room and board.

There’s also no guarantee of income, though, for those who graduate with student debt. More than 12 per cent of Canadians between the ages of 15-24 are unemployed, and over a quarter are “underemployed,” meaning they are working in jobs that don’t require their degree. Student debt without a job can lead to delinquent payments, which could create debt problems so early in adult life.

The solution to help earn money and pay off student debt that many are moving toward is a “side hustle.”

What is a side hustle?

Otherwise known as the gig economy, this is when people work a side job in their free time to either augment their full-time income, or act as part-time income while looking for other opportunities. This can provide extra income to make debt repayments, or provide spending money. Many young Canadians are embracing this: working from home, in retail, or other freelance work.

You side hustle can help with student debt relief

Your side hustle can help you earn more income, which can then be put toward student debt. But extra income can be spent irresponsibly if you do not budget and track your spending. If you’ve taken on a side hustle, take the time to regularly review and update your budget. An extra $500 per month toward paying off student debt can help you avoid seeking out formal debt relief solutions down the road.

In this podcast, our Licensed Insolvency Trustee (LIT) talks about how to avoid accumulating student debt while you’re in school, and how to manage it once you graduate into the workforce.

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