Congratulations, you’ve been accepted to post-secondary school! While the next chapter of your life will be exciting, one of the first questions you’ll need to answer is, do you need a meal plan?
If you’re living on campus, then it is likely that a meal plan is required by your school. That said, every school typically offers different plans depending on how many meals a day you’re looking for. While there’s no denying the fact that meal plans are convenient, many students will agree that they’re expensive and don’t make the most financial sense.
Since many people won’t maximize their meal plans, the best thing you can do is understand how they work so you can minimize any dollars wasted.
What is a meal plan?
Meal plans are prepaid credits offered by schools to its students. While prices will range from school to school, one major university based in Ontario charges $2,850 to $5,150. Depending on how you look at things, this could be cheap or expensive.
The most important thing to note is that meal plans are typically required if you’re going to be living in an official residence. First-year students usually only have access to the more expensive plans, while upper-year students, and any student living off-campus, can often choose any plan.
To pay for your meals, you’d tap your student card or a provided meal card. The cost of each meal would then be deducted from your balance.
What’s included in meal plans?
Meal plans are typically divided into two portions: basic and flex. Basic dollars are used at any dining hall on your campus. With flex dollars, students redeem meal credits at other food vendors located on campus, such as Starbucks, Tim Hortons, PizzaPizza, Subway, etc.
It’s worth noting that dining halls have evolved over the years. It’s not cafeteria style, where much of the food is prepared and served in bulk. Quite often, meals are made to order and use sustainable ingredients. In addition, these dining halls open early and close late to serve the many students that live on campus.
Having these options can be highly appealing to students since they don’t need to grocery shop, cook, or clean. Many major schools also have multiple dining halls and themed nights, so the food options change regularly.
Are meal plans worth it?
From a straight math standpoint, meal plans are usually not worth it. Using the example above, let’s say a student chose the most expensive meal plan at $5,150. Since the school year lasts eight months, the student would have access to the meal plan for about 243 days. Assuming the student is eating three meals a day, that works out to $7.06 a meal. This assumes you’re eating every meal on campus.
Admittedly, $7.06 a meal doesn’t sound too bad, but it’s better to break it down monthly. On the most expensive plan, your monthly food budget would be $643.75. If that sounds expensive, that’s because it is. According to Canada’s 2023 Food Price Report, the average male between 19 and 30 will spend $3,971.15 annually on groceries across Canada, while women of the same age spend $3,457.74 on average. That works out to $330.93 and $288.15 a month, respectively.
Clearly, buying groceries and cooking yourself is significantly cheaper than taking a meal plan, but it’s not that simple. Many residents don’t have access to a kitchen or full-size fridge/freezer, so cooking and avoiding food waste will be difficult. The food price report also doesn’t factor in any restaurant meals. Dining out with your peers is an essential part of student life.
What happens to unused meal plan money?
Okay, so you know that meal plans aren’t worth it, but if you live in residence, you don’t have a choice but to take it. Even if you were to select the cheapest plan, there’s a good chance you’ll end up with some leftover funds as you approach the end of the school year. What happens then?
When buying a meal plan, make sure you understand what happens to your balance when the school year, or even semester, rolls over.
In most cases (but not all), your school will allow you to use the funds the following year. The problem is, if you’re living on campus again, you’ll just be adding those funds to your new balance. If you are in your final year or transferring schools, you’ll likely lose those funds. What many students end up doing to prevent this is burning their funds on things they can take with them, like pop, packaged meals, and snacks. Some students will also treat their friends to meals just to get their meal balance to as close as zero as possible.
The bottom line
Student meal plans rarely make financial sense, but they’re often mandatory for anyone that’s living in an official residence. That said, meal plans do save students the trouble of cooking and cleaning, which allows them to focus on their studies. That alone could be worth it.
Barry Choi is an award-winning personal finance and travel expert. He regularly appears on various shows in Canada and the U.S., where he talks about all things money and travel. His website - Money We Have - attracts thousands of visitors daily, looking for the latest stories on travel and money.