It’s easy to make mistakes as a freshman in college. After all, it’s a new environment with new challenges and new responsibilities. Unfortunately, that kind of environment also makes it possible to make financial mistakes that could stay with you beyond graduation.
If you’re just venturing forward on the college life, you certainly don’t want to lose money because you weren’t prepared. Here are some common money mistakes that college freshmen make and how to avoid them.
Not Creating a Budget
You’re going to have to budget your money while you’re in college. This may not sit well, but you could have less money in college than you did in high school.
Create a budget that details your monthly intake and expenses. Be realistic when it comes to assuming expenses that are still a bit of a mystery. If you find that your income doesn’t exceed your expenses, then you’re going to have to make some adjustments.
The most important part of this process, though, is to exercise the discipline to stick to your budget once you’ve created it. The smartest budget in the world will be of little value to you if you don’t follow it.
Overusing Credit Cards
Some financial companies are happy to provide college students with a credit card that can be used for emergency purposes. They’re even happier when those college students use their credit cards frequently for non-emergency spending.
The problem with credit cards is compounded (literally) with the exorbitant interest rate that accompanies them. Some credit cards have interest rates well into the teens.
If you must have a credit card, stick to the “emergency only” policy with it. However, it might be best if you disciplined yourself in your younger days to live on a “cash only” policy.
So you’re in school now. You don’t need to worry about scholarships any more, right? Those are things that only high school students should be interested in, right?
Wrong. Keep looking for scholarships while you’re in college. You might be able to save yourself thousands of dollars in tuition by stumbling across just the right scholarship program.
Succumbing to Peer Pressure Spending
So you’re out with your friends one night at a local club. All your buddies are whipping out their credit cards buying food, novelties, and drinks. You want to fit right in, so you’re tempted to take your credit card out and start spending along with everybody else.
Resist that temptation. You’ll not only demonstrate that you’re a person of principle to your peers, you’ll also save yourself some cash in the process. It’s really a win-win.
Prioritizing your social life over your studies
College is an investment. In fact, it’s a very expensive investment. You’re simply wasting your money (or the money of the person who’s paying your tuition) if you’re not taking your academic progress seriously.
Make sure you’re making good use of your tuition by doing everything you can to get excellent grades.
Even at great schools like the University of Southern California, you can make financial mistakes during your freshman year. However, with just a little bit of up-front knowledge, you can avoid money problems and establish habits that will serve you well for life.