Avoiding Financial Mistakes in College

Now I certainly hope your mother taught you how to be financially responsible. Because if she did, a few of these points should be common sense. On MSN Money is listed the 5 most common financial blunders college students make, so what can be done to avoid making some of these mistakes?

Avoid using credit cards. They’re great for emergencies, but can be damaging when abused. Banks and insurance companies check to see how financially responsible you really are. If you’re constantly running up credit card debt, it brings your credit score down significantly. This hurts your chances of getting good interests rates on your loans and, in some cases, a job even.

Use student loans ONLY for school. Students have been known to pull loans not just for tuition or other college expenses, but for other things like gas, food and rent. The latter expenses really should be paid for with your own money, because that debt runs up fast. I guess many students don’t fully understand what borrowed money is.  It’s not yours and you’ll have to pay it all back eventually. So please, get a job.

Protect your financial information. If you ever need to log into your bank account, don’t do it on the public library’s computer. Most sites will log you out automatically within 5 minutes of inactivity, but even then, that doesn’t safeguard your identity from being stolen. Always be sure to log out of your account when you’re finished and never access your personal information on an open wi-fi network.

Know what your financial limitations are. One of the points the article makes is that it’s dangerous to use retirement funds to pay for college. I understand that for most, obtaining scholarships, grants, and affordable loans can be difficult, so parents may feel inclined to pull retirement money to help pay off their child’s college expenses. This leads to financial consequences for students later on down the road though, such as taxes and other penalties. The best advice that can be given here is that if you can’t afford going into a four-year college, then don’t do it. Community colleges are much cheaper and may be your best option until you can save up enough money to go for an undergraduates degree.

Understand why you’re there. If you’ve ever been public schooled, you’ve probably been pushed to go to college and get a degree. What you end up doing now is spending countless semesters trying to find out what you want to major in and running up your debt even more. If you really don’t know what to pursue a career in, just get your A.A. and get out. It’s better to wait and find out later on down the road what it is that you want to do than spending more time and money than you need to  just trying to figure it out.