Flying the nest is quite thrilling, as you can’t wait to start living independently. Still, despite all the benefits you’re going to experience, keep in mind that being on your own equals managing your own finances. That can turn into a disaster if you don’t do it right. That is why, we’ve singled out 5 common financial mistakes college students make to help you learn from others’ experience and avoid these problems yourself.
By: Pictures of Money – CC BY 2.0
Underestimating The Possibility to Win a Scholarship
Did you know that almost ‘2.3 billion $ were left on the table in free federal grant money for college students’, according to NerdWallet analysis? That’s because tons of students didn’t compete for scholarship. The main reason why learners didn’t submit enough applications is because they didn’t believe they could win. That is why make sure you take it seriously, and spend considerable time searching for grants, and applying for FAFSA (Free Application for Federal Student Aid). You shouldn’t be underestimating your possibility to win a scholarship. Just find one that appeals to you and give it a shot. You can use one of the scholarship essay writing services or ask your friends for help if you’re struggling to come up with right thoughts for a scholarship essays. There are a lot of options to choose from!
Taking More Loans Than You Need
It goes without saying that it’s tempting to get some extra money (especially, when you’ve got so many opportunities to try at college). Still, spending them on the things that aren’t essential can then result in you having great troubles paying your loans back. Think thoroughly and borrow the money you need for tuition and fees. In other cases, analyze, examine and budget smart by always asking yourself, “Do I really need money for this?”
Not Saving for a Rainy Day
You’ll always feel safer and confident if you have some emergency funds. This is how you can avoid anxiety of ‘what if?’. Plus, this is a smart way to manage your finances. Make it a habit. Set aside some savings every month. This goes together with ‘keeping your costs down by sharing an apartment with several roommates, sharing a car, and certainly cooking at home, says Travis Hornsby, founder of Student Loan Planner to CNBC.
Not Building Credit History
Unfortunately, you can’t make a fresh start building your credit history. Nothing is forgotten. That is why if you want a good credit history that will allow you to buy a good car or an apartment, start now. Make sure you use your card responsibly, so that you can have a better credit score.
Not Managing Money Moves
Last but not least, is the common mistake of not tracking your finances. Just living from paycheck to paycheck is definitely a bad idea. You need to monitor your progress, control your expenses, and see whether you’re moving in the right direction. By subtracting your liabilities from your assets you can get a net worth. If this number is increasing over time, you’re on the way to great financial situation.
Finances can be a troubling issue bothering not only students. However, once you learn the pitfalls and peculiarities of managing your budget smart, it will all fall into place. For this reason, don’t make the same mistake twice and benefit from these effective tips.