College can be an exciting place for growth and self-discovery. But it can also be a place where you end up developing poor habits for money management. If you don’t learn proper financial literacy, those bad habits will follow you even after your studies.
To improve your financial literacy, here are some of the most common financial issues that college students encounter and tips on how to manage your money more wisely.
Not creating your budget
Not having a budget is perhaps the most common financial problem of college students. Without this, you will have a difficult time keeping your finances in good order. To make a budget, list down all of your expenses.
Make sure to include your one-time expenses too. Set the limits to the amount you can spend on each category in your budget. This will help you establish more self-control in terms of your finances.
This is another very common mistake made by students in college. Things like splurging on designer clothes or premium watches or shoes, even though cheaper brands are just as good, is a bad idea.
The temptation of luxury will always exist. Try to control your unbridled impulses for shopping by spending your money more prudently.
Using your credit card excessively
This is a bane to many Americans and the habit is much worse if you’re a student. While credit cards are very convenient, you should also know that many of these have high interest rates and unfavorable terms.
The convenience of your credit card makes you spend more money than you have. Then you might get into the habit of just paying the minimum amount each month. In the end, you will get stuck trying to pay off your credit card debt until after you graduate.
Not applying for financial aid
You might miss out on financial opportunities if you don’t try to apply for financial aid. Financial aid comes in different forms and you should start keeping track of the application deadlines.
Start looking for scholarships as early as possible. Although applying for aid might sound overwhelming, finding financial aid preparing all of your documentation will make things easier for you.
Essays on financial management
While you learn how to manage your money in college, focus on your studies too. Teachers often assign coursework like a research paper or a college essay. If you study well and read a lot of books, you can accomplish these easily. But you also have the option to pay for essays, especially when you get assigned with challenging essay topics. You can hire college essay writers for pay to make things easier for you. You can also look through university + essay examples to get ideas.
Not setting aside money for savings
Most college students haven’t formed the habit of saving a part of their salary or allowance (yet). This is another issue you might encounter down the road. Start saving some money for an emergency fund to provide you with a financial safety cushion for the future.
Having unknown spending habits
Often, college students throw caution in the wind by spending money without keeping track of it. You might run out of money before you know it. Avoided this by using simple organizers or apps that will help you keep track of your expenses and manage your money wisely.
Buying everything you want
Many college students cannot discern the difference between needs and wants. Because of this, you will spend all of your money on your wants and not enough on your needs. Understanding the difference between these two is important to develop healthier spending habits.
Not thinking of your future
College life will keep you busy. It may seem too early to come up with a plan for your future but having one will ensure that you’re prepared. Whether you’re planning on starting your business or following your career path, you need a game plan for the future – and your finances should be part of it.
Misusing your student loan fund
Student loans will help you further your education by paying for your expenses. But if you use the money to purchase items that aren’t school-related, this will create problems for you.
You should use the loan money only for necessary expenses. Then send any excess funds to your loan servicer as an advance payment against your repayment.
Many believe that the right path to financial security is through investments and savings. As a college student, these terms might not be in your vocabulary yet, but saving is the key concept for financial health. Making money-saving a habit will be your foundation for your future financial success.
Liam Smithardi works for a content marketing agency as the lead blogger, article and web content writer and editor. He’s also a top-rated gig writer for an academic writing agency and he loves writing essays and homework. His free time is for gymming, swimming and reading mystery novels.