5 Financial Pitfalls all College Students Should Avoid

Wed, Jun 13, 2012

Budgeting, Financial Advice

As college tuition rates continue to rise across the nation and many college loan companies increase their interest rates, the cost of a college degree is becoming more expensive than ever before. Unfortunately many college students have to pay for most of their education through college loans and credit cards, which can financially haunt them for decades to come.

However, there are still some ways you can save money in college and avoid major financial pitfalls. Here are five suggestions to get through college without making damaging financial mistakes:

Don’t Rely Entirely on Loans

If you can’t get through college without relying entirely on student loans, it most likely isn’t worth it. Shop around and don’t automatically go for the highest price school. For example, just because one law school tuition rate is higher than all the others, that doesn’t mean it’s the most prestigious, and it certainly doesn’t mean it provides the best quality education. Even if this means attending a school that isn’t as well known, the money you will save in the long run will more than make up for it.

Have Only One Credit Card

Student loan debt is a huge problem, but so is credit card debt amongst students. Credit card companies are usually all too willing to reward cards to students, which they can quickly rack up despite not being able to make back the repayments. This kind of debt can lead to bankruptcy and of course a negative credit score, so make sure you only have one credit card in college that you carefully monitor and make your repayments on time.

Don’t Overlook Community College

The merits of community college are often overlooked, but they really shouldn’t be. Community colleges often provide a top quality education for very little money, and many of their courses are transferable to four-year universities and colleges. A financially shrewd way to earn a degree is to attend community college for your first two years of education and then transfer to your four-year school of choice to complete your degree. This can save you potentially tens of thousands of dollars, without having to compromise the quality of your education in the process.

Avoid Overspending at College

Unless you’re rich, college isn’t the time to spend huge amounts of money. Avoid taking leases out on new cars, buying designer clothes, expensive spring break trips and overspending in general. It’s true that you’re only young once, but at the same time you don’t want to be financially crippled by your overspending in college for the rest of your life. Make a concerted effort to be careful with money in college, and this should reduce the overall amount of debt you are saddled with post-graduation.

Don’t Be Lazy in College

In this tough economy, the days of the laid back student are gone. Succeeding in today’s world takes considerable time and determination, and there’s no better time than to start than in college. Take as many internships as possible in college to maximize your marketability when you graduate and network as much as possible. If times are particularly financially tight, rather than sit around and complain, get a part-time job to help you pay for your living costs. Whatever you do, don’t be lazy and don’t ignore opportunities that come your way.

College is always going to be somewhat expensive, but it definitely doesn’t have to bankrupt you or your parents. Follow the above suggestions and you should be able to graduate with minimal or at least manageable student debt. Good luck!

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