Whether you’re in college now or about to be, there is no time like the present to start thinking about your financial situation. It’s important to be as conscious of your finances as possible so you don’t wind up in trouble when you graduate (or before graduation, if you’re really negligent).
1. Ignoring the budget
I had a strict budget for my first year of university –and it worked! In my second year I got a job and had an influx of pay and scholarship money – and threw that budget out of the window. By the end of the year I had less (as in zero) money in my account then I did when I was living off of a tight budget with no income. The thing is, when you graduate and you want a job, you’re going to need to spend money on living expenses, which can go out of control if you’re not used to budgeting.
2. Misuse of funds
Even if you have a ‘budget,’ it may not be appropriate. If you are getting extra money through loans, bursaries and scholarships it can be pretty tempting to go on a shopping spree once your tuition is settled up. The money feels like it’s free because it just winds up in your account – but it’s not. If it’s a loan, you’ll have to pay it back, plus interest. When you graduate, you’re also going to have new expenses. If you’ve saved, you will have less stress in getting your life together. If you haven’t, you’ll be scrambling to pay back old debts as you acquire new ones.
This mistake is debatable. Some people feel being a full time student is a full time job. I however worked three jobs at one point, which meant 14-hour days plus commuting and catching up on living while awake at home. I personally needed to be that busy because it forced me to keep a structured routine of study, work and fun. Besides structure, it’s good to start getting experience as soon as you can because that experience could set you apart from those graduating with you. But the best part about a job? The income!
4. The wrong credit card
On just about any college campus you will find little kiosks trying to get you to sign up for a credit card. Avoid these at all costs. You may get a cool new (poorly made and ugly) backpack or towel if you sign up, but you’re risking your future. Often these cards have high interest rates and fees that will end up costing you money. Go into your bank, sit down with a bank teller and discuss the best type of credit card to start building your credit history, without potentially ruining it.
5. Not researching
It might not feel like it, but there are options out there for you to save money. Sometimes it’s blatant, like campus restaurants offering student discounts if you flash your student card. Other times, you may need to ask. Certain retail stores offer percentages off your total purchase and many entertainment activities offer student rates. If you don’t research where you spend your money, chances are your missing out on opportunities to save.