Your time in college is a memorable one. You don’t want to get swallowed up by debt and get your start into adulthood making the wrong financial decisions.
You want to avoid these financial mistakes in college that you probably don’t even know you’re making. Keep reading to uncover these 8 financial mistakes that college students are making.
1.Messing Up Your Credit
Going into college I had a small credit line on a starter credit card. I opened the credit card to build credit because I was moving into an apartment complex and credit was required. I used the card sparingly and made payments on time to build my credit history.
After transferring to a larger university around my junior year, I saw many more opportunities to open credit cards. There were offers for free food and other enticing offers in exchange for applying to a credit card and as a starving college student, I took advantage.
I remember getting a free Subway meal in exchange for a credit card application and I was approved! The bank sent me 2 credit cards and upon graduating, I had over $2K in credit card debt.
Financial mistake #1!
Don’t mess up your credit in college. Now, while having credit card debt doesn’t “mess up” your credit necessarily, it does put you out into the workforce with additional debt that you might not need.
Steer clear of offers like this and be super mindful of your credit while going to school. If you do get credit, make sure to make payments on time and check in with your creditor periodically for opportunities to lower your interest rate and take advantage of other benefits.
2. Borrowing More Than You Need
Student loans are a must for many students today. It’s just something that is required to fund a college education, for a lot of people.
Don’t get trapped in the student loan game, borrowing more than you need.
It can be tempting to take a student loan overage or get extra loans for living expenses, room and board when you can just get a job or live at home to save money on college expenses.
When I was in college, in my senior year I felt trapped. I was working a full-time job and going to school full time and I had been doing this for years (I was a 5-year graduate). My senior year was tough, and it was getting more burdensome to map out my work schedule around my crazy school schedule, so I took that year off and took out a five-figure student loan for living expenses.
Financial mistake #2!
It felt great at the time, having the burden of work lifted off my shoulders and not having to worry about juggling any more but 10 years later, I’m still paying on that student loan!
Avoid this if you can.
3. Choosing the Wrong Degree
This is a big one. The problem with picking the wrong degree is realizing it halfway through the degree plan and switching. This lengthens the time you are in college and adds to your school debt.
Financial mistake #3!
It can difficult, straight out of high school to figure out what you want to do with your life, but you have to think about this like a job. If you’re unsure of your future career, take some time to talk to professionals in industries you have interest in. You can also shadow jobs, interview people, look at “a day in the life of” videos on YouTube, and more.
Choosing in the wrong degree can result in attending college past 4 years, which will be more expensive and cost you your most important asset, time.
4. Stopping the Scholarship Hunt Once You’ve Started School
Searching for scholarships and student aid is not a one and done deal. The search should be ongoing, while you are attending school.
Financial mistake #4!
There is so much money available to students that is going unawarded, in part because students aren’t searching for it!
Pro Tips for College Aid:
- Complete your FAFSA every year
- Reach out to your network
- Search scholarships online
- Talk to your academic advisor
Completing Your FAFSA
This is a must-do if you want to get college aid. Do this every single year like clockwork.
Reach out to your Network
This is often overlooked. Your network is the people around you, like family, friends, your church, organization’s you are a member of, your parents’ workplace, etc.
- Kiwanis club
- Health insurance
- Auto insurance
- Chamber of Commerce
The internet is a hub for student scholarships. You have to dig down and search. Be consistent and you might find some golden opportunities.
Talking to Your Advisor
Use your counselor at your disposal. This is their industry. They will be in the know about scholarships and financial aid opportunities to fund your college education.
5. Spending Out of Control
This is a financial mistake #5. If you don’t have a budget, you are at risk for your spending going out of control. This is one way I grew my credit card debt to over $2,000 while in college!
There are many ways a college lifestyle can lure you into spending more money:
- College parties and events
- Spring break and school breaks/vacation
- Indulging in eating out and drinks with friends
Check out personal finance tools like Mint, which can help you manage your entire financial picture right from your cell phone.
6. Attending College Beyond 4 Years
Most experts are saying that today, a typical college student will not graduate in 4 years.
This wasn’t the case 20 years ago.
Financial mistake #6.
If you take longer than 4 years to graduate, you are adding tons of debt to your financial picture:
- College tuition, room and board
- Other college-related expenses (parking, meal pass, travel)
- More interest on student loans
Not to mention, you are delaying your entry into the work force for your career you are studying for.
Petersons shares 5 tips to graduate in 4 years or less:
- Decide on a major
- Take a full course load
- Understand your university’s requirements
- Check in with an advisor
- Fill in gaps as needed
Aim for completing your college education in 4 years.
7.Work While Attending College
If you really want to stay on top of your finances you should be working, even if it’s part time. Working will produce income to offset a lot of your college expenses so they don’t pile up and overwhelm you after graduation.
You can even work non-traditional jobs like:
- Completing online surveys for money
- Starting a side business
- Make money with these Fiverr alternatives
- Deliver food for UberEats earning around $11/hour
This is financial mistake #7. If you’re in college, get a job.
8. Not Taking Advantage of Money-Saving Opportunities
There are tons of ways to save money in life. Busy college students can forget this or be too busy with school to execute these money hacks.
Financial mistake #8!
Take a look at these money-saving opportunities:
- Saving on groceries with grocery apps
- Use gas apps to save on gas
- Negotiating down monthly bills like cell phone, subscriptions, etc.
- Exploring cheap or free entertainment (no-spend weekends, etc.)
- Avoid paying full price for everything
There you go! Are you making these financial mistakes in college? Comment down below to share your thoughts and learn more about saving money in college.
Jason from Frugal for Less believes it doesn’t take living in a box to build your wealth or be able to save $13,000 in just 10 months. In today’s age, there’s a ton of ways to save money, but there’s another million that can take your money away and he’s here to sort the two by compiling all the ins-and-outs of how to save your money to the maximum by living on the frugal side.