The six most common financial mistakes college students make
If you’re a college student, managing money on your own is just one of many brand new adventures. The combination of newly found freedom and a lack of money management experience can result in some costly, real-world fumbles. At a time when you’re just beginning to build your financial reputation, steer clear of these six common money mistakes:
1. Borrowing too much
If you’re borrowing money to pay for college, make sure those funds are dedicated solely to school expenses. Remember that once you graduate, you’ll have to repay that debt. Don’t compound it by financing your annual Spring Break trip just because it’s listed on the school calendar. Make smart decisions about what qualifies as an educational expense and only borrow the amount you really need.
2. Not living on a budget
Creating and living on a budget is a must for a college student living the college life. There’s likely a limited source of income that includes an allowance (if you’re lucky), wages, and savings that need to be closely monitored and spent with care. Go old school and use a notebook, a spreadsheet or an online budgeting tool to help manage your budget and keep track of your monthly spending. Otherwise, you’ll be living a life of ramen noodles.
3. Relying on credit cards
It’s easy to fall into a trap with credit cards. If you use your credit card to pay for an item, the odds are you’ll spend money that you don’t have and rationalize it by saying that you’ll pay it off by making monthly payments. Use a credit card if you need the item, it fits into your budget, and you can pay it off at the end of the billing cycle. End of story.
4. Stopping the scholarship search
It’s true that many scholarships are awarded to incoming college freshman, but there are a significant number of scholarships available to current college students. Most people hit the snooze button sophomore year and miss out on available cash. Continue to search for and apply for scholarships and grants throughout your college career so that you can fund your education and keep your debt at a minimum.
5. Skipping class
Whether it’s partying too hard, oversleeping, unpreparedness, or just plain laziness, there’s no real justification for skipping class. When you’re not in attendance you’re not learning the material, which obviously increases your chance of failing the class. Before you graduate, you’ll need to repeat the class and PAY FOR IT AGAIN. You don’t need a Ph.D. to know that’s a total waste of time and money.
6. Missing deadlines
Maybe it’s buying game day tickets in advance to take advantage of the discount, being conscious of the last day to drop a class so you’re still eligible for 100% refund, or returning rented textbooks on time in order to avoid the late fee. Whatever the case, there’s money at stake when you miss deadlines. Most of the time it’s because you’re disorganized. Get a calendar, mark the dates as soon as you know them and review your calendar daily. Huh, look at that, money in your pocket. Shocker.
The bottom line
We know, you’ve heard it a hundred times…”College life is an exciting experience, but it also brings a new set of responsibilities.” If you take away anything from this, we hope you’re just more aware of these financial pitfalls and do something to avoid them. We promise we won’t let on that we gave you any advice and when you’re finally feelin’ good about your debt management, you don’t even need to thank us!