There are lots of things about college that are difficult, and fortunately not all of them have to do with academics or socializing. Figuring out your finances in college can be just as challenging, and if you make the wrong financial choices during this time, it can set you back financially for years to come. To help you avoid making the big financial mistakes most college students make, I’ve listed the 10 biggest ones below.
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| The 10 Biggest Financial Mistakes You Should Avoid Making in College |
1) Don’t spend your budget on anything else but tuition
Many students think they should be earning a return on their tuition dollars by finding ways to spend their budgets on anything else but tuition. Staying focused on just paying for your classes can ensure you actually graduate and don’t end up with student debt. Paying for food, entertainment, travel and activities should all be considered separate from your education budget because there’s no guarantee you’ll have time to actually enjoy them between studying, working and other responsibilities that go along with being a student. Instead of living like an adult (with an income), you should live like a college student (without one). This means eating campus food instead of dining out every night, limiting travel or spending money to important experiences, like study abroad programs.
2) Buy used textbooks
Textbooks, especially ones on sale, can be costly. To save money and avoid financial mistakes, buy used textbooks whenever possible. Look online and at student book exchanges to compare prices. Sometimes you’ll find a bookstore willing to match or beat online prices so it doesn’t hurt to try asking! If you wait until last minute to buy your books and are rushing around like crazy trying to get them all, stop for a moment and consider whether all that stress is worth a few extra dollars (or cents). Many students have spent hours holed up inside The Student Bookstore during finals because they had no time for studying or missed opportunities with friends. When was it decided that academics take priority over having fun?
3) Live with your parents for a year
To save money and get your financial life off to a strong start, consider spending your first year after college living with your parents. Your rent and utilities will be free, and you'll have a great excuse to sock away as much cash as possible into savings. If you do decide to move out, it'll be with a hefty nest egg under your belt — which can come in handy when dealing with expenses like buying furniture or making down payments on rent. There's no need to spend much time thinking about whether that is a good idea for you; if it works for someone else, it might work for you too.
4) Get a part-time job on campus
There’s a good chance you’ll work during college. Whether you go part-time to make some extra cash or full-time to help with tuition and other expenses, getting a job on campus can be an easy way to supplement your income while learning more about financial management (i.e., how not to overdraft on your bank account). Getting a part-time job on campus might not seem like it’d provide valuable lessons for future endeavors, but having a real job can teach you important skills like showing up on time and accepting constructive criticism. The most important thing is that you begin early—it's hard to build that résumé when college ends.
5) Plan your meals carefully
Making sure your meals are planned carefully and budgeted accurately will keep you from running into financial trouble while in college. Many colleges have meal plans, which can help prevent your checking account from taking a hit every time you head to campus for a meal. If you choose not to buy a meal plan or prefer to prepare your own meals, it’s important to take careful stock of how much food is necessary for an effective diet versus how much money is available in your account. There are many easy ways to save money on food—and cooking at home is often cheaper than eating out.
6) Look into student discounts
For example, you should look into student discounts for Internet service. (Depending on your school, you may already be covered by an arrangement with one or more providers.) Forgoing paper and pens to go 100% digital also can save a lot of money. Investing in a tablet or laptop (or both) is much cheaper than buying high-end office supplies, and these devices make it easy to stay organized and communicate digitally with friends as well as professors and advisers. And while there are plenty of financial mistakes you should avoid making while studying abroad, there are also loads of ways to save money abroad too; that includes flights from home, special housing accommodations if applicable, low-cost local transportation options like walking or biking rather than taking a taxi everywhere—you get the picture.
7) Avoid credit card debt at all costs
The interest rate on credit card debt is much higher than it is on any other type of debt, so even if you don't carry a balance, you'll still be paying off credit card interest for years. By all means, avoid using credit cards at all costs—just put your money in an interest-free savings account instead. If you must use a credit card, make sure that you pay it off at least once per month. Even better, don't just make minimum payments—pay as much as possible to get your balances down as fast as possible. It's better to have a small amount of credit card debt that's paid off than a big chunk of it that isn't.
8) Avoid expensive fitness activities
There are tons of different ways to stay fit and healthy on a budget. Walking, running, or biking for transportation can burn up extra calories throughout your day without breaking your bank. (And if you’re walking or biking for transportation, you should be able to squeeze in some other activities—like getting to class—without burning too many calories.) Ditch expensive fitness classes at gyms and replace them with free classes at community centers. If you have time before or after class, get in a workout using stairwells or extra time on your walk home from school. These small changes will help you save cash while improving your health! Use these tips wisely and avoid making financial mistakes like spending too much money on an expensive gym membership that you don’t use regularly.
9) Use free resources for studying
In addition to taking online courses, students can take advantage of free resources for studying. A study from a Harvard professor showed that using free resources for studying like Wikipedia and Khan Academy resulted in higher grades. This is likely because these kinds of tools help students focus on what they don't know rather than assuming they know everything. The takeaway: If you're struggling with a subject, try turning to one of these free resources first. It might not be that you don't understand something—it could just be that you have forgotten it.
10) Know the difference between wants and needs.
If you’re like most people, you will pay for things that are just wants and not needs. If you don’t know the difference between the two, it can be hard to save your money and spend wisely. The way around that is to get in the habit of asking yourself if something is a want or a need. Do I really need to buy more clothes? Why do I want that new video game? It can be hard at first to make these choices, but the more you practice it, the easier it becomes. With time and experience, you will make better decisions with your money.
Conclusion
Most people who enter college lack a basic understanding of how to navigate financial matters. This can lead to unwise choices regarding spending, savings and credit. If you want to graduate from college without crippling debt or other serious financial issues, avoid these mistakes.
