Your loan instalment just came in, and it feels like you’ve got $5K in the bank just waiting to be spent…. except that’s nowhere near true. And even if it’s hard-earned paycheque money, it still deserves to be treated with respect and restraint. You are limited in cash usually when in college, so you need to be preserving your funds by ensuring you aren’t squandering your money.
Not sure where to start? Here are five things you shouldn’t do with money in college:
1. Open a credit card in exchange for something free
It doesn’t matter what it is. That burrito, t-shirt, pizza, or foam finger will end up costing you in the end, so don’t give your personal information and signature away to open a credit card.
There seems to be more than enough booths with companies offering credit cards, so just try to avoid them. You may not even need a credit card as a student.
2. Loan a friend money
Help your friend throw a fundraiser carwash, help them get a job, or help them create a stronger budget, but don’t loan your friend a significant amount of money. Not only does your friend not know the future (AKA whether he’ll find a job or have to move away), but you also don’t. Even if you’re flush with cash now (haha), there’s no telling if you’ll need your own resources in the future. This goes for co-signing on any kind of loan, too!
3. Sign a lease without a roommate agreement
You’re best friends now. But then, suddenly, your roommate starts chain smoking and inviting strangers to “stay a few nights” on the couch. And let’s not even get started with the mess in the kitchen! Before you sign a lease, sit down with your prospective roommates to make sure you agree on visitor, the date the rent is due, and what to do in the event of an argument or disagreement. You’ll be glad you did.
4. Spend it on just about anything
This might sound harsh, but anything within your price range in college is probably not worth purchasing. Stick to thrift shops, college outfitter stores, and yard sales for the necessities like furniture and kitchen supplies.
Luckily, it’s far easier to be frugal as a student than it is when you are out of school, as I have demonstrated in this post.
4. Gamble or invest with student loans
Hopefully this isn’t even on your radar, but if you think gambling or investing with student loans is a good idea, think again. In fact, this is downright illegal, depending on the conditions of your loan! It’s not worth the risk, both legally, and in the event of a major loss.
Have you made any of these mistakes? What would you say to someone in your position?