College
life offers students various forms of experiences. To begin with, it is the
first time some students get to spend their time away from their homes and
parents. On the same note, it provides opportunities for students to learn how
to make quick decisions without consulting anyone. It is vital to note that the
newly found freedom could make a person excited, despite the fact that if it is
handled arrogantly, it could make individuals commit a series of mistakes,
especially when it comes to managing finances. While in college, most times,
making mistakes is inevitable, and, sadly, some wrong decisions could have
long-term devastating financial outcomes. The good thing is that most high
learning institutions have finance departments or colleagues pursuing finance
courses; hence, they could assist them in learning how to manage their
finances. In addition, there is a lot of information on the internet that could
assist students to make better financial decisions.
As a
student, whenever you have difficulty completing your assignments, you could
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Therefore, you should never hesitate to seek help whenever you find yourself
having difficulty understanding the lecturer's instructions or completing your
assignments within the estimated duration. When it comes to managing finances,
sometimes, as a student, you will be required to make difficult decisions. For
instance, you will need to decide whether you will spend more time with your
colleagues and have fun, or you will spend the most time studying and use your
time purchasing revision materials. This article will discuss some of the
common money management mistakes college students often make.
Misuse of student loan
Indeed, as
the cost of pursuing education keeps rising, most students are finding it
challenging to manage their college expenses. Some students have to attend more
than two part-time jobs to be able to finance their academic expenses. For some
students, enrolling in a student loan might be the only way to meet the high
cost of education. A common mistake most students make is failing to utilize
the money for the specific reason it was borrowed. Most students use the money
from the student loan to party, purchase expensive gadgets, hang out with
friends, and do other recreational activities without considering that the
money will be paid with interest.
Spending too much on the wants
A common
mistake most students make is failing to understand the difference between a
need and a want. Although some students know the difference between the two,
they often have difficulty or are unable to identify the one to prioritize.
Learning how to budget for the two demands a lot of discipline since it helps
individuals avoid overspending on the wants. Unfortunately, spending most of
your money on the wants will reduce the amount of money you should spend on
basic entities like books, pens, and other studying resources. Generally, I
would argue that food is a need and tea is a want. Therefore, an individual
would consider cooking food instead of preparing tea. If you want to budget
well for your finances, you must strive to differentiate a want from a need. On
the same note, you should always consider spending more on essential products
than the things you just desire. Most importantly, you should avoid spending
too much money on lavish things, such as gadgets, clothes, and shoes.
Comparing yourself with your colleagues
You will
have difficulty excelling in your studies if you always compare your academic
performance with your colleagues. On the same note, you will have difficulty
managing your finances effectively if you are always competing with your
colleagues on who has the latest clothes, shoes, or fashion. Indeed, different
people have varying sources of income and preferences. Therefore, while you are
thinking of prioritizing your studies, their attention or preference could be
on something very different. As a student, you should avoid doing something to
impress your colleagues and avoid comparing yourself with others.
Living beyond your means
Another
common mistake made by most students is living a life they cannot afford. As a
result, they usually end up with massive debts and have a challenging time with
their finances. Whenever you want to make a financial commitment or purchase
anything, you must assess all the costs associated with the product. In
addition, as a student, if you want to avoid landing yourself in problems, you
must ensure that you keep away from things that bring your anxiety and stress
and purchase products that accrue more debt. If you have too many debts, the
chances are high that you will have too many sleepless nights, which is
unhealthy. You will also have a bad credit score and lose financial confidence.
Low savings
As
mentioned above, the cost of pursuing education is very expensive. Apparently,
most students have to look for part-time jobs to sustain their school life. It
is vital to note that students usually incur high expenses not only in their
academic lives, but also in other non-academic activities. Unfortunately, most
parents and teachers do not remind or teach students about the essential role
of saving. As a result, most students are usually tempted to spend almost all
their finances with the hope that their parents will cushion them during the
rainy days.
In conclusion, college life teaches students how to survive in the harsh and competitive world. Students get to learn the value of money and how to become independent. Learning about finances will assist students in avoiding being spendthrift or use most of their finances on wants rather than needs. By learning how to save, you will be able to enjoy and invest your finances. There is so much students can do with their lives, provided they are knowledgeable about the aspect of finances. Otherwise, financial illiteracy will make you remain in debt.