College students are typically uneducated in the way of financial management. Here are common mistakes they usually do
- They don’t develop proper mindset: in some cases, students are able to manage their income and get part time job. However, there is a possibility that they still have improper mindset. They should switch from the tendency of spending their remaining money to the willingness to save enough money. If they don’t have bank account, this should be a good opportunity open one. This should allow them to have enough saving to pay for tuition and books, which will reduce their dependence on student loans.
- They can’t manage credit card usages: many would advise that students shouldn’t have credit cards. However, this should be a good opportunity to build credit, which will benefit them during adulthood. In this case, students should use their cards only during emergency and they should make sure that it is possible to repay these debts quickly. A good credit card for student should offer low interest rate and it shouldn’t require annual fees. It is also a bad idea to get cash advance because there will be fees and the interest rate can be exceedingly high.
- They borrow more than they need: before borrowing any money, students should evaluate their grants and scholarships to know whether they are eligible for specific aid. But, when a loan is absolutely necessary, it is a good idea to make sure that they understand about associated rules. They should know how close they are to the aggregated loan limits. It is necessary to evaluate whether they have enough money to complete their study.
- They don’t automate money management: students should be able to automate their finances after they have mapped everything. There are computer and mobile apps that allow us to stay within our budget. There are many instructions online on how to properly manage their budget. For example, Mint Bills is a useful app that allows pay bills on time. The app also makes it possible for us to pay bills directly from mobile devices. These tools can be integrated with our budget and we would know what to do right now, whether we need to pay bills or save the money for future purposes.
- They don’t monitor their finances: good financial condition needs to be maintained continuously and it is not possible to let everything goes on autopilot without continuous monitoring and occasional maintenance. It is quite rare that our income and expenses stay the same all the time. Sudden drops in revenue could cause poor financial condition. Unexpected income or expenses may arise and this could require us to immediately look for ways to compensate for the changes.
- They don’t ask for help: after everything they do, it is still possible for students to encounter difficult financial issue they could get helps from parents and financial counsellor. Managing money is easy if we are willing to allocate enough effort.