Back to school isn’t just for younger children and teenagers. Many college students are getting ready to go back to school as well. From moving into dorms to budgeting for text books, soon enough many cities across the country will be swelled with eager students.
I never had the typical college experience, but many of my classmates from high school did. As we were all figuring out our options during our Junior and Senior years, I wish someone had imparted some of these financial tips for college students. Student loans can add up quickly if you aren’t careful and though you can certainly find free money for college, it still couldn’t hurt to be financially smart when it comes to college.
For many individuals, college is the first time they will face the world of credit card offers, bills, loan offers, spending temptations and budgets.
In a small way, it really is a taste of the real world because the financial responsibilities lie solely with the student. With this new responsibility, many students have to make very important decisions on how they spend their money. Unfortunately, mistakes can easily be made without proper planning and budgeting.
Essential Financial Tips for College Students
The common money mistakes most people make when they start out are not keeping track of expenses, being unaware of credit card purchases, spending all their money at one place at one time and bouncing checks.
Not Keeping Track Of Expenses:
One of the most common mistakes people make with their finances is not keeping track of where their money goes when it is being spent. A typical scenario would be a college student using their debit card to purchase snack food items from the campus bookstore or convenience store.
While using the debit card may be convenient and the cost of the items comes to 5 to 10 dollars, those dollars will add up if this transaction occurs every day. Being unaware of the amount spent, a student makes his usual trip one day and finds out that his card is declined. The student, in disbelief, wonders where all the money went to, so he goes to the ATM machine.
Upon discovery, he finds out that his account has been overdrawn and that he spent a total of $200-$300 on snacks alone. This mistake is a very easy one to make with a lot of people due to the amount of the single purchases themselves.
However, these small purchases do add up to a large amount of money of you are not careful.
Being Unaware Of Credit Card Purchases:
Credit cards are very tricky things because they are a very quick and easy way to spend money that you do not have. The worst thing you can go is to use that credit card for each purchase they make; even if the purchase itself is a candy bar or a bag of chips.
Just like your bank account, these expenses will also add up into big bucks including minimum monthly payments. In addition, your credit rating might be affected because credit cards also come with a credit limit and once those come close to, or reached, your credit score might become lower.
Spending All Their Money At One Place At One Time:
If all the money is spent at the beginning of the semester, them there might not be enough for when you need it in the middle or the end of the term.
Basically, bouncing a check means that you write one for more money than you have in your checking account. These checks will result in what is called an overdraft. Banks will charge anywhere between $20-$30 or possibly more for each check written that is more than the account to cover the expense, which would add up to quite a bit.
Unfortunately, other banks may hear about your overdraft history and might refuse to give you an account.
By staying on top of your purchases and managing your money wisely, you can avoid these common money mistakes. Consider making a budget at the beginning of each semester. That way you have a clear picture of how much money you have to spend. It might be easier to make your budget for the Spring, since you can use your Fall expenses as a starting point.
What financial tips for college students would you like to share?