There is a weird dichotomy with college students. On the one hand, they are very creative with saving money. We’ve all hear stories of surviving on a food budget of $3 a day to living a whole semester rent-free by sleeping in a van and showering in the school gym.
On the other hand, college students are notorious for making basic financial mistakes, partly due to inexperience and partly due to the realities of college life.
Here are the three biggest mistakes that college students often make.
1. Treating Credit Cards like Free Money
Credit card companies love college students because college students tend to do exactly what credit card companies want them to do: rack up huge balances, pay the minimum payment and allow interest to balloon.
It’s a good idea to get a credit card while you are in college so you can build up your credit score. However, if you follow the pattern described above, then it will be counterproductive. You won’t build up a good credit score and you’ll start your adult life deep in the hole.
2. Eating Out a Lot
Eating out is a huge, unnecessary cost. Its appeal is obvious: you get instant gratification, great food and no dishes to wash. On the other hand, you waste hundreds of dollars a month.
If daily you grab a morning coffee, lunch on the go and then find yourself out to dinner with friends three times a week that adds up to almost $450 a month on food that doesn’t even fill your pantry.
Save eating out for special occasions. Cook at home more and/or use the meal plan that you’ve already paid to use. Take the money you would spend on lunch each day and deposit it into a savings account where you can watch the money grow but still have it available for a special occasion.
3. Complacent with Financial Aid
Many students take out far more loans than needed because it seems like the obvious way to fund your education.
Instead, take the time to research and apply for scholarships. You don’t have to be fresh out of high school to take advantage of the many scholarships available for furthering your education. Taking time now to find financial aid will save you money and stress in the long-term.
These three mistakes are simple, but avoiding them will save you A LOT in the long term.
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