Common Money Mistakes Most College Students Make

Ah—freedom! The long-awaited escape from childhood and into the world of being an adult. Saying goodbye to Mom and Dad and heading towards your first college dorm is a thrilling adventure. Unfortunately, being an adult brings not only freedom, but a huge amount of responsibility. Don’t screw up by making financial mistakes at the brink of adulthood.

Did you know that college students tend to rack up thousands of dollars in debt each year? And that’s not counting student loans! Student debt is even one of the leading reasons that college student drop out.

Here are some common mistakes that many college students make with their finances.

Not Having a Budget

A budget can be a simple thing, especially when the cost of housing is not on your list. Without it, you could easily blow through $5000 in the first month of school. To set your budget you need to break down how much spending money you have, whether it’s from your parents, your savings or a part-time job. Then ask yourself what you have to buy — such as meals, clothes, notebooks, etc.

Figure up how much those items will cost you, and give yourself some extra padding on them in case your figures are low. Now what is left? That is the amount you can spend on extra items like Friday night fun, extra clothes, and a spring break adventure. If it’s not enough, then consider ways to earn some money while in school. Even if it’s mowing grass or babysitting, things you probably did plenty of in high school, it is a source of income and can help you enjoy the fun side of college a bit more.

Accepting Credit Card Offers

Your parents may have provided you with a credit or debit card to cover your basic expenses, but you will also be slammed with credit card offers upon entering college. These are so tempting to use for nights out with friends, for lunch at McDonald’s every day, to impress that cute girl in Freshman Orientation, and even to head to the beach with your BFF for Spring Break.

But doing so will easily rack up thousands of dollars in debt — debt that could end up causing you to drop out of school. It’s not worth it, so don’t go there. Just walk on past them or throw them away.

Using Student Loans like Free Money

Many college students seem to confuse student loans with scholarships or grants — funding that doesn’t require repayment. But student loans are exactly what they say they are — loans! They carry a low interest rate and they usually don’t start accumulating interest or require payments until you have graduated, which are good things. But don’t think that means you can take them out and use them for anything you want and not face consequences.

While it may be better than credit card debt, accumulating tens of thousands of dollars of student loans will burden your post-graduate life. Keep student loans at a minimum or avoid them all together. Find alternative ways to afford your college lifestyle and tuition.

You can have a fun, rewarding and successful college experience without falling into financial disaster. You simply have to avoid the financial mistakes that your friends may be making. Being responsible financially now will also make you a better candidate for that fabulous position you want to land when you graduate.

That’s it for now. Until next time Divas, wear your heels well and Be Blessed!

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