15 Money Mistakes College Students Make
- Managing money is an important skill you’ll learn in college and need throughout your life.
- Creating a budget to avoid overspending, paying student loans on time, and avoiding excess debt can help you get off to a good financial start.
- Understanding and making money a priority can lead to long-term financial success.
It’s college time – that exciting period in your life when you can experience all kinds of amazing learning opportunities that go beyond the classroom. You’ll discover talents and interests you didn’t know about 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, from your first day, you’ll have to figure out how much money you have and how much money you’ll need to meet your expenses and pay for 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.
- Overspending. Even the best and brightest students make the mistake of spending more money than they have. You can avoid that by knowing your expenses and income and setting a monthly budget. Check out these popular budgeting apps that can help you master Budgeting 101.
- Not saving money. If you work a part-time job or over the summer, get in the habit of saving. Having savings can help you manage unexpected expenses and sleep better at night.
- Paying bills late. Ignoring or paying student loans and other bills late will cost you. It can result in high fees and a lower credit score that could hurt you when you need to buy a car or apartment or home later in life. It could even affect your ability to get a job because some employers perform a credit check before making hiring decisions.
- 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, contact the servicer on your student loans. Also, make sure you understand the long-term impact of your student loans and adjust your plans accordingly. For example, if you expect high monthly student loan payments after graduation, focus on finding a job after college versus planning an extended European vacation.
- 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 will cost you. So, it could be a blessing if you didn’t get into that over-the-top expensive “dream school,” which you could be paying for long after graduation.
- 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.
- 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 other places. Take advantage of discounts wherever you can.
- 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. Look for ways to reduce the amount you have to borrow either by getting a part-time job, commuting to school, or serving as an RA.
- Maxing out credit cards. Speaking of debt, make sure you avoid credit card debt. With interest rates so high, carrying a credit card balance can be a budget-killer. Avoid using credit cards to pay tuition; there are far better options for you. If you have a credit card, try to pay off your balance every month to avoid costly interest fees. If you already have high-interest credit card debt, check into transferring it to a lower-interest rate card or work toward paying more than the minimum payment each month.
- Not applying or appealing for financial aid. College costs are super high and continue to rise year after year. Financial aid can help ease some of the financial burden. To apply for federal aid, you and your family must complete the Free Application for Federal Student Aid (FAFSA). If you have applied for financial aid and your circumstances have changed (i.e., a job loss in your family), write an appeal letter to your financial aid office.
- Not applying for scholarships. Scholarships are free money and are available throughout your college career, so why not apply? We just so happen to know a good one. Check out our $5,000 Murray Watson Jr Scholarship.
- 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.
- Eating out/ordering in too often. If you have a meal plan (which isn’t cheap), why spend extra money ordering in or eating out? That’s money you could use toward your expenses or extras.
- Not considering private loans. Not all student loans are alike. We recommend you use federal student loans first. If you still have unmet need, private student loans are a great way to bridge the gap. Not all private student loans are alike. For example, a student loan from a non-profit private lender, like Brazos, can help you get a lower rate that could save you thousands of dollars. Click here to see Brazos private loans.
- 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!