15 Money Mistakes College Students Make

15 Money Mistakes College Students Make

BIG Ideas:

  • Managing money is an important skill needed throughout your life and can lead to long-term financial success.
  • Creating a budget to avoid overspending, paying your bills on time, and avoiding excess debt can help you get off to a good financial start.

It’s college time – that exciting period in your life filled with all kinds of amazing learning opportunities that go beyond the classroom. You’ll discover talents you didn’t know about, develop new interests and learn how to interact with people from all different backgrounds and places. Pretty cool, right? You’ll also learn a very important skill you’ll need for the rest of your life – managing money.

Yup, you’ll have to figure out how much money you have, how much money you’ll need to pay your bills, how much money you should set aside for all those extras that make college life so much fun – like the concerts, road trips, and of course, late-night pizza deliveries. (You have to have those!).

Money mistakes to learn from

Since college is likely the first time you’ll live independently and make your own decisions, it’s the ideal time to build your financial knowledge and confidence. An easy way to do that is to avoid some common financial mistakes college students make. Let’s take a look at 15 of them.

      1. Overspending. Even the best and brightest students make the mistake of spending more money than they have. You can avoid that financial mishap by setting a monthly budget, and sticking to it! To make this easier, check out these budgeting apps that can help you track your income, spending and expenses!
      2. Not saving money. If you work a part-time or summer job, get in the habit of saving a little bit from each paycheck. Having savings can help you manage unexpected expenses.
      3. Paying bills late. Paying bills late will cost you! Not only can paying bills late result in fees, it can also result in a lower credit score. This could hurt you when you need to buy a car, home, or qualify for an apartment or other loans later in life, and it could even affect your ability to get a job because some employers perform a credit check before making hiring decisions.
      4. Ignoring student loans. When it comes to money, ignorance is not bliss. Know the amount you borrowed on your student loans, the interest rate you have to pay, and when repayment begins. If you’re not sure about the details of your student loans, contact your loan servicer.
      5. Attending a school they can’t afford. It’s easy to be lured in by an expensive school because of its reputation or amenities, but it could cost you. So, it might be a blessing if you didn’t get into that over-the-top expensive “dream school”.
      6. Choosing the wrong major. Not all majors offer the same career and earning potential.  So, know the job opportunities available in the field you are considering. Use the Department of Education’s College Scorecard, which provides earnings information by school and program.
      7. Not taking advantage of student discounts. Your student ID is more than just a pretty picture. It can help you save money with discounts at movie theaters, museums, and some subscription services like Spotify or Amazon Prime. Take advantage of discounts wherever you can.
      8. Taking on too much debt. You already have a heavy backpack to carry; you don’t need to be more weighed down with the burden of excessive debt from student loans after graduation. Look for ways to reduce the amount you have to borrow like commuting to school, taking some classes at a local community college for transfer credit, or even buying used textbooks!
      9. Maxing out credit cards. Speaking of debt, make sure you avoid high-interest credit card debt which can be a budget-killer. If you have a credit card, try to pay off your balance every month, and on time, to avoid costly interest and late fees.
      10. Not applying or appealing for financial aid. College costs continue to rise year after year, but financial aid can help ease some of the burden. To apply for federal aid, complete the Free Application for Federal Student Aid (FAFSA).
      11. Not applying for scholarships. Scholarships are basically free money and are available throughout your college career, so why not apply? (P.S. – We just so happen to know a few good ones. Check out our $5,000 Murray Watson Jr Scholarship and our $1,000 No Essay Scholarship!)
      12. Not taking advantage of opportunities to work. With college costs so high, it’s not a bad idea to get a part-time job or side hustle to give you some extra spending money, or help with tuition and living expenses. Just make sure you continue to focus on your studies, too!
      13. Eating out/ordering in too often. If you have a meal plan, why spend extra money ordering in or eating out? That’s money you could use toward your expenses, put away in savings!
      14. Not considering private loans. Not all student loans are alike. While we recommend that you use federal student loans first to take advantage of any federal loan benefits or public loan forgiveness that may be available to you after graduation, you might still have unmet need. If so, private student loans are a great way to bridge the gap. For example, a student loan from a non-profit private lender, like Brazos, can help you get a lower interest rate that could save you money. Click here to see Brazos private loans.
      15. Not making money a priority. Money management is one of the most important things you’ll learn in college. There are tons of blogs and resources available that can help you build your knowledge about budgeting, saving, and borrowing. Learn as much as you can – your future depends on it.

      Brazos is here to guide you along your financial journey

      For more than 40 years, Brazos Higher Education has been helping make education more affordable for students and parents. As a non-profit, we can offer you low rates on student loans and personal service to help you get off to a great start. Contact us today!