Being a college student isn’t easy, there’s a lot of pressure coming at you from all sides: school, friends, parents, and yourself.
Balancing everybody’s expectations while maintaining healthy finances can seem like a monumental task, especially since this is your first time handling this kind of thing.
But the truth is… if you know what to look out for, you can avoid it.
Here are the top 5 most common financial mistakes college students make…
Instead of using your loan for books, tuition, room & board, many students will choose to finance their extravagant lifestyle of partying, clothes, gadgets, and eating out.
These school loans you’ve worked so hard to get should be paying for your education, not your social life…so use the money efficiently.
You’ll be paying it off for many years to come.
Even responsible adults can rack up some hefty credit card debt, but students, who have no viable income besides their school loan money, and what cash mom & dad give them, have no business getting multiple credit cards.
This is a recipe for credit disaster because now students will not only have their school loans to repay when they graduate but large credit card balances.
Sallie Mae, the largest student loan lender, says that most graduate students have an average of $5800 in credit card debt.
Racking up huge credit debt and not paying your bills on time is a good way to ensure that you can’t purchase a car, rent an apartment, or even get a cell phone after you graduate.
Keep the credit cards to a minimum, and pay your bills on time to keep your good credit rating. You’ll thank yourself in a few years.
Being a college student generally means living on a fixed income.
Whether it be your financial aid money or money from a part-time job, or even money from Mom & Dad, the cash is usually limited, and setting up a budget is important.
A monthly budget doesn’t mean you can’t do the things you want to do, but simply a plan so you know the “must-pays” actually get paid.
Figure out exactly what bills and expenses you have every month and plan for those first.
Any money left after that can be budgeted for social/recreational things like movies and going out.
Instead of going to your local community college for your pre-req classes and spending $500 a class, many students feel they have to go to the 4-year university straight out of high school.
Many ends up returning home and going to a local college anyway, but attending a local school first is a good way to save money, and get those required classes out of the way cheaply.
After you’ve completed these courses, transfer to a 4-year school to complete your undergraduate degree.
This will save thousands upon thousands of dollars that you would have racked up on student loans, and been paying off well into your 30’s.
So many of the bad financial decisions students make is a result of poor financial education.
Students haven’t been taught by their parents or high school teachers the importance of maintaining a good credit score, paying bills on time, and budgeting income.
Smart spending during the college years will ensure that the money you make after graduating will be spent on things you want, not credit card payments, collection companies, and school loans.
And these great habits will last you a lifetime.
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