Avoid These 4 College Money Management Mistakes

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“I’ve been absolutely terrified every moment of my life— and I’ve never let it keep me from doing a single thing I wanted to do.”
-Georgia O’Keeffe
“You have brains in your head. You have feet in your shoes. You can steer yourself in any direction you choose. You’re on your own, and you know what you know. And you are the guy who’ll decide where to go.”
-Dr. Seuss
“Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not.”
– Dr. Seuss

Nobody was more “freshman” in college than me. I went to a university where not one high school friend attended. I really had no idea what I wanted to do with my life and had no confidence I would figure it out. I had never really managed my own time in the past and wasn’t sure how to do it. When I look back on my freshman year of college, I can only shake my head at my vast stupidity! Let me provide you with a little nugget of my ineptitude. We were issued a food card that had a balance like a debit card but could only be used on campus in the cafeterias and restaurants. Right below my dorm window was a burger place that specialized in greasy burgers and greasy fries. I see now that this was a trap setup by the university. It was a lot of greasy goodness, it was open late, I could smell it from my dorm room window and they took the campus food card! So, long story short, my food card was exhausted half way through the first semester! Having zero confidence my parents would be understanding of my fix and send more money, I subsisted on popcorn for the remaining two months. Seriously! Thank God I had purchased a large grain sack of popcorn for my hot air popper from Sam’s Club before being dropped on campus. Ramen noodles were a treat reserved for the weekends because I only had the one case. This brings me to one of the first money management mistakes to avoid as a college freshman.

  1. Don’t mix up what you need with what you want. This is so easy to do when it is midnight and the smell of deep fried anything is floating through the screen in your window! Differentiating between what is a need and what is a want is the most important aspect of money management for any stage of life. Most money management mistakes can be avoided if you can begin to break down your expenses into one of those two categories. Make an effort to divide expenses into needs and wants.
  2. Don’t blindly head off to college without a budget! You must care about the money you have and think about how you will spent it. Ignorance about where your money is being spent is a recipe for a two month popcorn diet! Here is access to my favorite tools for creating a budget. Project your expenses and then track your expenses when you get to campus. How much will laundry cost? Off campus food? Travel and school supplies? It is perfectly normal to make adjustments to your budget so be flexible but don’t let your expenses exceed your income. A budget is required to get the most out of your money.
  3. Don’t overuse or misuse credit cards! Can you imagine what my freshman self would have done with a credit card? It wouldn’t have been pretty! Know your limitations. Give yourself a cash allowance each week. (I still do this as it is the best way to keep my wants in check.) If you have a credit card, use it as a tool to start building your credit. A good credit score will be valuable when you begin leasing an apartment or need to buy a car. As a college student, you are likely to have access to credit cards through promotions that target you as a future wage earner. Don’t get hooked by the free sippy cups, cozies and t-shirts. One credit card that is paid in full each time it is used is enough. Starting your career with unsecured debt that will very likely be on top of student loan debt is like starting a race 50 yards behind the starting line. Just don’t do it!
  4. Don’t ignore your student loans! Pay attention to the loans you are taking out and have a plan for repayment. As a rule of thumb, try to avoid private student loans as they are more rigid in their terms of repayment. Exhaust federal student loans first. Federal Student loans have income based repayment plans or student loan forgiveness programs. Low income individuals may qualify for subsidized student loans that will save on interest. Private loans do not have these options. The terms of the contract must be followed to avoid default. Study the student loans you are considering and know the terms of your student loans before you take them out!

Please look for my upcoming book – ‘The Popcorn Diet” or how to lose the Freshman 15 the stupid way! Do you have a story about money management mistakes as a college student? What was your biggest financial mistake as a college student, freshman or otherwise? Please share so that we can all learn and at the least, it may make me feel better about myself!

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