Whether you are off to college or university, starting your post-secondary education is an incredible step toward a bright future. For many of you, this new adventure means striking a delicate balance between managing your coursework and the responsibilities of adulthood and new-found freedom.
Some of you may have years of money management under your belt, but for some, creating a budget, living within it and overseeing your finances is a new conquest. We have prepared a list of common money mistakes and how to avoid them so that you can limit risk and spend more time focusing on the investment you are making in your education.
Mistake #1: not having a budget
Think you don’t have a budget? Yes, you do. You just don’t have it mapped out. Whether you are on student loans, are running on savings or are privately funded (thank you mom and dad!), understanding your income versus expenses is a life-long practice and there is no better time to get a handle on this exercise. There are a number of budget worksheets or apps that will allow you to input your expenses against your cash flow so you can manage your funds evenly across the year. April is for worrying about your finals, not wondering if you have enough money to eat.
And if your money outlook looks tight for the year, it’s a great time to find areas to cut expenses or pick up a part-time job to eliminate this worry early.
Mistake #2: treating credit like cash
Building credit in your early twenties is a good idea to set yourself up for the future, but credit can be a slippery slope that gets you into more trouble than it’s worth if you don’t have a plan in place. Follow these rules to keep yourself protected:
- Sign up for a student credit card or low interest credit card and make sure you understand the terms and conditions, payment due dates and penalties. Call your financial institution if you need more clarity.
- Don’t spend more than you can pay back. Paying off your credit card each month means you aren’t making unbudgeted interest payments.
- Read your statements and get a credit report annually. It’s easier to fix errors on your statement and credit report if you catch them early and don’t let issues turn into compound problems.
Mistake #3: paying full price
Paying full price or not shopping for a deal can equate to a substantial amount of missed savings, especially when it comes to expensive items like school supplies and books. Watch for sales on the supplies you need (including that fancy computer) and ask your professor if the last edition of your textbook will do the trick. New books from the campus bookstore can be a huge expense that you can lessen by looking elsewhere or buying used.
And when it comes to life expenses, learn how to shop or socialize within your budget; clip coupons, buy sale items and hit up happy hour with your friends to maximize your dollars!
Mistake #4: not applying for scholarships
You can’t get them if you don’t apply! There are a number of scholarships and bursaries that are awarded by simply applying, not necessarily awarded for having top marks. Ask your student services representatives if they have a list of available awards and start filling out applications. Any amount you don’t have to pay back will get you closer to being debt free after graduation!
Mistake #5: trying to do it alone
If you’re feeling financially overwhelmed it can feel embarrassing to tell anyone. But that’s what financial advisors are here for! They can help you understand your budget and obligations, and guide you through these formative financial years.
Not sure if you should choose a bank or a credit union? Credit unions offer the same solutions and services as traditional banks, but are community-minded organizations that are focused on you instead of the bottom line. Because credit union members are also owners, we put you first in all that we do. We won’t sell you products you don’t need and we’re there to listen, answer your questions and help you make your financial dreams a reality.
Find a credit union near you.