Common Money Mistakes That Students Make
Updated: Apr 3, 2020
The following is an article “Common Money Mistakes That Students Make” by Marc Primo.
You are never too young to learn about money and never too old to commit financial mistakes. That is just the truth and if you are still in school, getting a crash course on how to manage what you have in your wallet is the perfect time more than any other.
Your transition from high school to college life usually comes with some major adjustments. For starters, most students get this sense of responsibility in handling class and social schedules, adjusting to dorm life, and stretching the budget or saving up. While the first two can be quite manageable, handling your finances can prove to be one that’s most tricky and challenging.
To help you avoid falling deep in debt or running out of cash while on campus, here are a few easy to follow tips you can try out.
Getting wild with your credit cards. Most debt stems from the misuse of credit cards on unnecessary purchases but having one is really not that all bad since it may come in handy for financial emergencies and give you rewards points. However, not considering the entailing interests of borrowed money, failing to pay on schedule, and overdrafting can put a student deep in debt. According to www.creditcards.com, more students at age 18 already have their own credit cards and the numbers grow even higher as they age.
Last year, 67% of students aged 18 to 24 are using the magic stripe but the real question is: are students today responsible enough to establish their credit scores at a young age? Of course they are but only with the proper financial education from their parents. All a student needs to do is understand the entire process from making a purchase to being religious about monthly payments and keeping a good credit score. Ground rules need to be set and overdrafting must be considered a major no-no. If students know how to use their credit cards and avoid wanton spending then they may even enjoy the returns of a good credit score in the future when they become independent.
Not working. This tip is not for everyone but if you are really determined to learn the ins-and-outs of money while still in school, you will have to get a job. In the U.S. there are a handful of on-campus jobs students can take which offer lenient schedules and workload so that they won’t interfere with study time. And even if you apply as a waiter in a restaurant near campus or take part-time evening shifts, the opportunity to build up your savings and ease the stress that regular expenses bring can be truly worth it.
Not planning your budget. Most students will always remember wanting that special item from the store window so much that they discipline themselves to save up some money to score it. That is called budget planning which is essential even as early as when you’re in college and trying to cover all your expenses. It’s pretty easy to be complacent about money when your parents are well-off and provide you with a handsome weekly allowance, but even that cannot guarantee that you won’t commit money mistakes. Worse, you may develop the wrong notions about spending and miss the important lessons about saving up. Try to come up with a simple budget which you can manage daily and identify which aspects of your college life you can cut back on or how you can efficiently track your purchases. Take note that one of the main purposes of planning a budget is that you set aside a little for savings for emergencies, so reserve a column for that.
Remember, small amounts can eventually balloon into something substantial. When that happens your financial management journey becomes much easier as you grow into adulthood.