For many students, college is the first major landmark on the path to independence. Moving away from home means no more curfews, no asking for permission and no parents looking over their shoulders. It also means that the liberty-seeking college kid is now free to make his or her own mistakes.
In such an environment, money management often becomes an issue. Knowing how to avoid these problems is the key to beating them. Here are ten common mistakes students make, and how you can avoid them.
- Making poor choices about which credit cards to get. Credit card companies set up booths on college campuses, offering T-shirts and other items to anyone who will sign up for a card. Although the deals can seem fantastic, students must look into the card's repayment terms carefully. "When students get credit cards, two things can happen," said Stephen Ferris, professor of finance at the University of Missouri - Columbia. "One, they don't read the fine print and see what they're paying. And they're paying a lot. Or they use it until it's maxed out." It is absolutely necessary to pay your credit cards on time each month, added Ferris.
- Letting friends pressure them into spending money. College life is full of opportunities to spend money, finals week smorgasbord, an evening out with friends, road trips and vacations... Not knowing how to say "no" can cause students to spend money they just do not have. "If you can't afford it, just say no", says David Fingerhut, a financial advisor.
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