Navigating the college scene as a freshman is hard and stress-inducing enough. Add on the first taste of financial freedom, and many students are bound to stumble.
For incoming students, college means a vast array of new responsibilities. There’s getting used to (tough) course work, classes and making new friends. Campus life also marks the beginning of financial independence. With that comes many opportunities for failure, along with lasting consequences.
Finance can be one of the hardest things for parents to talk about with their kids. To break the ice, here are the top money mistakes college freshmen make (and how to avoid them):
Stocking up at the bookstore
Instead of purchasing all “new” books and spending a fortune, first try and see if those same books can be rented or bought used. If the bookstore is sold out of used texts, try Amazon. Sometimes, you’ll find that there are huge discrepancies in price.
Moving off campus
Undergrads may think that living off campus will save money, but that’s often not so. In fact, those apartments further from school can come with higher transportation costs and hefty utility bills. Transportation costs increase along with commuting distance, and for every dollar you save on housing, you could easily be adding 77 cents in transportation.
Eating outside the meal plan
Late night pizza delivery is the hallmark of the freshman experience (hence “the freshman 15” pound gain), but all of that take out will take a toll on any undergrads’ budget. These days, most schools have amped up their dining amenities and mealtime offerings and baked that into the tab. As a result, a meal plan could be a much more cost-effective choice, particularly if you’re a big eater. For those on a meal plan, eating out is a prime unnecessary expense.
Credit card errors
Since the Credit Card Act was enacted, in order to get one, students must either put down a deposit in exchange for a secured card or get a parent or other adult to be a co-signer, which means the co-signer is also on the hook should the student fall into debt. That can lead to big problems, not just for students, but their parents. Perhaps pick a credit card alternative, like a debit card linked to a checking account, or a prepaid card, which can act as a defense against overdrafts.
