As college freshmen begin arriving on campuses across the country, the American Bankers Association Foundation is highlighting common money mistakes many of their predecessors wish they had avoided.
“Most college freshmen are getting a taste of economic freedom for the first time, and they may not realize that small expenses can add up really quickly,” said Corey Carlisle, executive director of the ABA Foundation. “It helps to approach your finances like a part of your course load. Draft a budget, study it and establish a lifestyle that will set you up for financial success.”
To help college freshmen start out on strong financial footing, the ABA Foundation suggests avoiding these common money blunders:
- Not creating a budget. You’re an adult now and are responsible for managing your own finances. The first step is to create a realistic budget and plan to stick to it.
- Losing track of expenses. Keep receipts and track spending in a notebook or mobile app. Know where your money is going and pace spending so that your money can last throughout the semester.
- Living beyond your means. Limit your “hanging out” fund. There are lots of fun activities to keep you busy in college and many are free for students. Get the most from your student ID. Maximize your meal plan instead of eating out.
- Abusing your credit card (and your parents’ trust). Anyone under 21 is likely an authorized user on their parents’ card, so congratulations on earning your parents’ trust. Don’t ruin that trust – and your parents’ credit score – by spending way over budget or not making payments on time.
- Not saving for emergencies. Have a financial plan for the unexpected. Things happen, and it’s important that you are financially prepared when your car breaks down or your smartphone goes for a swim in the toilet.
- Not finding a bank that works for you. Don’t get stuck paying fees if you don’t have to. It’s easy to find a bank that offers free checking and saving accounts that are great for college students. Also consider whether or not a bank has convenient ATMs near campus or if they’ll reimburse you for out-of-network ATM fees.
- Not maximizing your bank’s technology. Most banks offer online, mobile and text banking tools to manage your account night and day. Use these tools to check balances, make payments, deposit checks, set up alerts and monitor transaction history.
- Overlooking ‘free’ money with your student ID. A lot of retailers and businesses offer significant discounts for students. Always carry your student ID and make it a habit to ask if there is a student discount before making a purchase.
- Buying everything new. Consider buying used books or ordering them online. Buying books can become expensive and used books are just as good as new ones.
- Being afraid to ask questions. This is a learning experience, so if you need help, ask. Your parents or your bank are a good place to start, and remember—the sooner the better.