The Worst Student Money Mistakes and How to Avoid Them
For many students, college is the first time out in the real world and mastering money is a major milestone on the road to independence. Some rise to the challenge while others stumble slightly, while still others fall flat on their face and need reconstructive surgery to repair the damage. To avoid being the latter, here are the most common student money mistakes and how to avoid the financial turmoil caused by them.
Not knowing enough about credit cards before you get one. Many credit card companies sponsor giveaways and other events at universities. The whole point is to push credit cards on unsuspecting students. Don’t fall for it! These cards usually have good introductory rates but when a couple months go by the real rates kick in, you’ll be left wondering how your $200 balance turned into $600 in the blink of an eye. If you want to get a credit card, read Choosing Your First Credit Card to get good tips on what to look for in a card.
Not keeping track of bank account balances is dangerous when out of college let alone with the unusually small, limited budget you have while in college. Overdraft fees will kill you. Repeat: overdraft fees will kill you. Keep track of the money in your account by either balancing your checkbook the old school way or if you are tech-savvy (Which you should be. You’re reading a blog after all), do your banking online. If you do the online stuff, you can usually get setup to receive emails when your balance is low.
Not having a job, even when you have time to do so. College is expensive and it’s not getting any better. Why not alleviate some of that by getting a job? Some students are too busy to get jobs, that’s understandable. But for those that spend half the day outside of class, getting a job, internship or starting to freelance are perfect ways to earn at least a couple extra bucks so you won’t have to live on Ramen. And maybe you won’t be too deep into debt by the time you graduate.
Letting friends pressure you into spending money may be the quickest way to rack up debt, especially when coupled with having a credit card. Going out to eat, concerts, movies and beer money are the biggest culprits that will drain your bank account. To avoid this mistake, give yourself a budget and stick to it. Don’t let your friends influence you to spend money you can’t spend. I’m not saying that you should never spend any money on entertainment. Instead, find activities that have a low cost or no cost at all. There should be a happy balance between fun and saving. Allow a budget for going out a few nights a week. After all, you’re in college; so have some fun.
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