Brought to You by Our Partners at College Ave Student Loans
Managing your finances without the close supervision of a parent can feel both exhilarating and intimidating. Sure…the newfound freedom can be exciting, but the pressure to do everything perfectly can be overwhelming. To help you stay on track, our partners at College Ave Student Loans put together a list of the most common financial mistakes college students make.
Mistake 1: Failing to exhaust scholarship options.
Scholarships are the best way to reduce education-related costs. Since you are not responsible for paying them back, you’re essentially receiving free money (a.k.a – the best kind of money). By choosing not to search extensively for scholarships you qualify for, you’re missing out on a huge financial opportunity.
Get more tips for scholarship success here.
Mistake 2: Not making loan payments while in school.
By making payments on your loans – even if it’s only $25 a month – you reduce the amount of interest that accrues while you’re in school. Reducing the amount of interest accrued reduces the overall cost! The earlier you start, the better.
Mistake 3: Not understanding the terms (and cost) of a loan before accepting it.
Student loans are a huge financial undertaking. Make sure you understand the terms and cost of the loan before accepting it. Unlike scholarships, loans must be repaid so it’s important to understand how they work.
A rule of thumb is to avoid borrowing more for school than you plan to make in your first year after college. Researching potential jobs and salaries will give you a good reference point.
Get started by learning the difference between Federal and Private loans.
Mistake 4: Not setting up a budget.
The easiest way to make smart financial decisions while in college? Pay attention to your money! Start by setting up a budget so you don’t end up spending more than you have.
Check out The College Student’s Guide to budgeting here.
Mistake 5: Racking up credit card debt.
Credit cards should not be used to splurge or to fill in the gaps within your budget. Credit card debt generated during college can affect your credit score for years to come. Ultimately, it can hurt your chances of getting things like a car loan or mortgage down the road. Spend wisely and always pay on time!
Mistake 6: Skipping – and potentially failing – classes.
How is it financially irresponsible to skip classes? Your classes cost money! Every time you skip one, you’re throwing away the money that went into paying for it. Furthermore, skipping classes increases the likelihood of failing classes. However, you don’t get a refund if you fail! Instead, you have to pay to take the class…..again.
Mistake 7: Not taking advantage of free opportunities.
One of the biggest perks of being a college student is the array of discounts and freebies that become available to you! Avoid paying for items you can get for free. Pass on the expensive, monthly gym membership and take advantage of the campus gym. Skip your weekly trip to the movies and check out the free movie nights on campus. Keep an eye out for what’s available and put your student status to good use!