College is an exciting milestone for everyone. This is your first taste of adulthood. For a lot of you, it is their first time staying away from home, and thus you will require making all the hard decisions by yourself, one of which is financial decisions. While managing money, college students tend to struggle for assignment help. Students who have never received any formal financial education may make possible money mistakes that might have dismal consequences in the long run.
As a college student, you have to go through a lot, like identifying how to pay for college, earn money for daily expenses and then still manage to get a good education. Unfortunately, some financial mistakes can damage you and might linger for decades. As a college student, you must ensure all your finances are in proper order. Identifying these mistakes will help you stay prepared for what you need to stay away from. Here are a few common money mistakes college students are likely to make along with suggestions to avoid them.
1. Spending More Than Needed
College students often, due to peer pressure or to impress others lose sight of what they want and need. As a result, students end up paying all their money for the things they want, thus leaving them with little money for the things they need like tuition fees, books, travel or allied expenses.
Pro Tip: Your first priority should always be for things that you need, and after spending money there, if you are left with money, you can spend it on the things you want.
2. Not Maintaining a Proper Budget
College is the best time to get into budgeting since this is the time yo has fewer financial responsibilities. The habits you set at present will e useful for the years to come. As a college student, you will live with a very limited budget. So, if you are not careful with your spending, you will only be wasting your money on things you probably do not need.
Pro Tip: Taking care of simple things like using a credit card with discretion and using a digital expense manager can help you overcome the urge to overspend.
3. Abusing Credit Card Usage
Mismanaging credit cards is another money mistake college students seem to make, which gets them caught in a cycle of debt. So to avoid making mistakes with credit cards, students first must determine if the credit card is really a good option for them. College students who are using it should wisely handle them by setting a limit for spending and avoiding purchasing what they cannot afford.
Pro Tip: Before you make any purchase using a credit card, make sure that you can pay up the credit balance in full each month to save money on interest. Students must stay aware of proper credit card management habits, or it might affect their credit score, which will further hamper their financial life. When choosing your credit card, go through all the application materials – especially the fine print- to understand what fees may be charged. However, they should be aware that the introductory interest rate will not last.
4. Misusing of Student Loans
Students between the ages of 25 and 34 have a loan debt of about $33,817.56. Although most student loans tend to be federal student loans, students also have the option of personal loans that helps them bridge the gap between the things they receive from the government and what they require to cover the remaining expenses in college.
Sometimes, students are qualified to get more funding than they require for their school year. But, according to a feature article of 2013 from US News, young adults who received more money than they actually needed ended up using the loan for a lavish lifestyle which led them to debt balances that seemed impossible to pay later.
Pro Tip: Students must accept the loan amount required to cover their education-related costs like textbooks, hostels, study materials, dorm expenses, and field trips. While it may be tempting to use it for non-educational purposes, you must remind yourself that you will eventually need to repay the amount, and every dollar you are borrowing will build up interest.
5. Saving Too Little
College students or young professionals tend to develop a habit of spending money like there is no tomorrow. Saving money is something college students should learn from this stage since it can play a safety net for discretionary spending in the future. There are hardly any college students who practice saving allowance to prepare themselves for a rainy day. Saving a fair amount will eventually lead you to treat with little luxuries you had put off.
Pro Tip: Open a savings account that auto-debits a certain amount, small or big, and transfers it to your savings account.
6. Spending Uncontrollably
When it comes to making money mistakes, unnecessary spending tops the list. College years are anyway notorious for overspending. Some unnecessary spending generally seen among college students are buying expensive gadgets, upmarket outfits, luxury shoes or overindulging in fun activities.
Pro Tip: Students who use the money from a student loan to buy personal items must remember that this act provides only momentary happiness. So, keep a check on such habits for the long run for such behaviour can spell financial doom even beyond college life.
When you are in college, you might think that personal finance can wait since you have not started to earn money or do not possess enough money yet. But college is actually the best time for learning how to save money, create a budget and not get into the temptation of overspending. This is the right time to build your skill for managing your money effectively and efficiently.
Instead of pondering over the money mistakes you have already made, take it as a lesson to correct and work on them. You will realize that the best lessons in life are learned out of mistakes.
Author Bio: Anne Gill is one of the most reputed finance consultants in the UK. Her clients range from college students to adults who ask for financial guidance or suggestions. She is also a part of MyAssignmenthelp.co.uk, where she offers finance assignment help solutions to students.