Whether your parents taught you at a young age how to handle money, or you’re ready to get a grip on it now, it’s never too late to be financially responsible. In many cases, college is the first experience we have that requires managing rent and other expenses. This is also a time period where college students make many mistakes. Below we have listed some common mistakes college students should avoid. If you’re aware of these lessons now, you won’t have to look back and regret your financial mistake later.
Credit Cards = Infinite Money: Almost everyone has a credit card, and understandably so considering many credit card companies offer rewards points for your usage. Credit cards are easier to use because you don’t have to fiddle with cash, and even if you don’t have the money at the moment, you can still make a purchase. Awesome, right?
Mix college and a credit card together and you have a pretty destructive combination. Let's say in college you need school supplies – you charge it, a new outfit for a party – you charge it, stuff for the apartment – you charge it, and you need to eat three meals and some snacks – you charge those too! Well, after four years of only paying the minimum balance on your credit card, you have now accumulated a nice pile of debt. That’s not a good situation to be in.
Credit cards build credit, so take them seriously. Do as much as you can to get free money for college with scholarships and grants, and work a part-time job to support your spending habits. It’s okay to have a credit card, but it’s important to pay it off in full each month.
“I’ll just wing-it.” This attitude is pretty popular among seniors struggling with senioritis, but don’t let it creep its way into your finances. If you don’t set up a budget, it’s easy to overspend. When you’re older, you’ll gain more responsibilities and will be unfamiliar with how to distribute your income. The fact is college is only temporary, and many times your income is sporadic. Learn how to save now while you don’t have as many responsibilities and you’ll be better off down the road.
Making College your Career: You’re at the end of your college career and you’re fighting a rough economy as you search for a job. School is all you’ve known since a very young age, and moving on is very scary. You could just apply to graduate school, right? Well yes, you can; however, are you doing it because it’s necessary for your career goals, or because you’re scared? By staying in school, you’re increasing your debt, along with the stress you will have after you graduate. Maybe think twice before going into graduate school, unless it’s necessary for your field.
Peer Pressure: Not knowing how to say “no” can be detrimental to your pocketbook. There are so many opportunities to spend money in college: meals with friends, party supplies, vacations, and more. One of the biggest mistakes a student can make is not putting their foot down and saying no when it is needed. Stick to your budget. If you can’t afford it, just say no. True friends will always understand.