Most high school seniors have already accepted their college’s financial aid offer, or will be settling on a final choice soon. So congratulations – you’re almost a college freshman! You will be learning many exciting things in your classes, but you will also be learning to handle your own finances without your parents’ supervision. Here are five of the most common mistakes made by college freshmen, and smart moves students can make that will save money:
1. Wasting Student Loan Money: Federal and private student loans should be used to cover college costs, not living expenses. But college graduation and loan repayment seem like such a long way off that some students are tempted to waste their student loan money on day-to-day expenses. A slice of pizza or a night out with your friends now can become pretty costly in four years when you begin repaying that loan. Get a job to cover your out-of-pocket expenses, and have a separate bank account for that money so you’ll know how much you have available to spend.
2. Not Learning to Budget: Budgeting is easy when your parents do it for you, but it can be hard to balance income and expenses on your own. Ask your parents for advice, or find out if there are any budgeting classes on campus. Learn this skill now and you’ll benefit your entire life.
3. Taking On Too Much Debt: This will probably be the first time you will be offered credit on your own. Many credit card companies have special student programs available. Before you sign up, be sure you think about what you can reasonably afford to repay, and be sure you learn about interest rates and payment terms.
4. Reckless Spending: The freedom of being on your own is exhilarating. Spending money is great fun, too, until you run out before the semester ends. Keep track of your spending so you can see if you are making smart choices. You might be surprised at how quickly that daily latte eats into your book budget.
5. Poor Eating Choices: It may be funny to laugh about the cafeteria food, but if your parents paid for a meal plan use it as much as possible. Skipping meals, going out with friends, or buying groceries to eat in your room defeat the purpose of a meal plan. If the food is really that bad, ask your parents to change the plan and allow you to use the savings as a food budget.
Your financial situation will change every year. You will need to submit a FAFSA annually and some scholarships may expire. Work with a college financial aid advisor to make sure you understand all the implications of the financial decisions you make, and be sure to keep looking for scholarships.
If you need help understanding financial aid, scholarships, or budgeting, contact College Financial Aid Advisors (CFAA). We can help you learn to make smart financial decisions.