Financial Tips For College Students

by Lisa Sousa

For a lot of students, college is just a taste of what the real world is like. For the first time, they will have to face a world full of credit card offers, loan offers, spending temptations and budgets. It is a very well known that the stereotypical college student's diet consists of pizza, beer, ramen and macaroni and cheese. It is also known that college students are also very poor and typically earn very little money through their jobs if they are employed part time. Unfortunately, like many of us, they will also make a few mistakes along the way if they are not careful.

What Are Common Money Mistakes People Make?

One of the most common mistakes people make financially is not keeping track of the money they spend. A typical case scenario is when a student uses their debit card to purchase some snack food at the local or college convenience store. This snack comes to a total of five to ten dollars each trip. Five to ten dollars may not seem very much, so the student makes daily trips to this place, unaware of the mounting expenses. By the end of the month or term, this student goes to make a purchase and their debit card is declined. Upon discovery, they find that their bank account has been overdrawn and that they have spent a total of $155-$310 in snacks alone. This mistake is a very easy trap to fall into because the purchases themselves are only a few dollars each but quickly add up to one large amount if not careful.

Another mistake is not being aware of the purchases made on credit cards. Credit cards are very tricky things because they can be a very quick and easy way to spend beyond your means. One of the worst habits a student can get into is to use their credit card for each purchase they make; even if it is just for a bag of chips. Just like your bank account, these expenses can also add up on your credit card which in turn, can make what you owe a lot more including the minimum monthly payments. Credit cards also come with a credit limit and once those come close to, or reached, your credit score might become lower. Which might affect your credit rating.

People also make the mistake of spending their money all in one place and at one time. Such is the case of the beginning of a school term for many students. Spending most if not all the money at the beginning would leave you having little or no money left over for the things needed.

Another mistake to avoid if all possible is bouncing checks, writing a check for more than what you have in your checking account. Bouncing checks will result in what is called an overdraft. In the case of an overdraft, banks will charge you 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. This might result in other banks learning about your history of bouncing checks and therefore might refuse to give you an account.

These are only a few mistakes that people make financially; whether they are starting out on their own in college or even in the real world. These are also mistakes that other people might make as well. However, there are ways to help improve your financial situation and to avoid these, and many more costly mistakes.