5 Money Mistakes College Freshmen Make
College can be a time for gaining financial independence and an opportunity to create positive financial habits that you will hopefully carry with you after graduation. While gaining new independence can be an exciting adventure, there are certain financial mistakes that can be easy to make and can have long-term consequences. To help you make smart financial choices in college, here’s a list of 5 money mistakes college freshmen tend to make that you should proactively avoid.
1. Not staying on top of financial aid deadlines
In order to be eligible for federal financial aid, such as student loans and grants, you will have to file a FAFSA each year after filing your taxes. The deadline to file the FAFSA is technically June 30th, however, the longer you wait to file your FAFSA, the less financial aid options you will likely be awarded.
Filing a FAFSA for the first time can be very time-consuming. You will need plenty of information from your parents if they are claiming you as a dependent, but knowing this can help you plan ahead. To avoid waiting too long to file the FAFSA, communicate with your parents and agree on a weekend, after taxes have been filed (ideally at the end of January or in February), to get together and complete the FAFSA. The good news: each subsequent year you file a FAFSA will be a little quicker, as your information is saved and carries over to future applications.
2. Not taking the time to search and apply for scholarships
Searching and applying for scholarships can definitely be an involved process, and the thought of spending so much time applying for an award you might not even get can even be discouraging. These factors commonly cause new college students to miss out on scholarship opportunities. However, the more scholarships you seek out and apply for, the better chance you will have of offsetting your college costs and having to rely less on student loans or personal savings. If you’re a new or future college student, this is not an opportunity you’ll want to miss out on.
The best way to maximize your proficiency in applying for scholarships is to familiarize yourself with the types of scholarships that are available and where to find them, create a schedule or timeline for scholarship searching and applications, and knowing how to write an effective scholarship application essay.
3. Irresponsible use of credit cards and student loans
A common mistake made by college students is not considering the repercussions of frivolous or unnecessary spending, specifically with student loans and credit cards. In the moment, it might be easy to not think of money spent with credit cards or student loans as real money that you will need to pay back later, but know that smart choices and responsibility can have a positive long-term impact on your life as well.
The best way to be responsible with credit card and student loans is to create a budget, to stay financially organized, and to live within your means. A couple of useful articles relevant to this topic include “How to be Financial Responsible in College,” and “5 Great Financial Apps for College Students.”
4. Not focusing enough on academics
Meeting new friends, keeping up with current friendships, being social and having fun can be healthy aspects of the college experience that balance out stress caused by work and studies. However, placing too much of a focus on your social life and not enough on studying and academics can have a negative impact on finances. For instance, neglecting your studies ahead of a big exam can result in failing the course, and having to retake it and pay the tuition cost for those units again.
With college tuition being as expensive as it is, one of the best ways to ensure that the overall cost of your college education is as low as it can be is by making sure you meet the requirements to pass your classes. You can increase your likeliness of success by knowing how to manage your time, and to create a system of organization that works best for you such as a calendar with upcoming due dates and exams.
5. Jumping into a major for the wrong reasons
Selecting a major is a critical and rewarding part of the college experience, and luckily today we live in an age where there are more areas of study available than ever before. At the same time, it’s important that the major you choose is one that you intend to complete and will provide you with opportunities best suited for your academic and career goals. Choosing a major that you end up switching out of further into your college education, for instance, can result in having to take a whole new set of prerequisites and major course requirements, and consequently paying more in college tuition and fees.
The best way to avoid having to switch majors is to spend time researching majors that you might be interested in. For instance, knowing what each of your prospective majors requires for graduation, and what sorts of jobs each major might qualify you for after graduation are aspects worth considering.
Hopefully knowing about these common money mistakes college freshmen tend to make will help provide you with ideas on ways which you can be financially responsible and smart as a college student. For more articles and resources on financial aid and related topics, be sure to check out our Financial Aid & Tuition page. Be sure to follow us on Twitter, Facebook, and Pinterest for future useful articles to help make your college financial planning a little easier!