Being a college student comes with a lot of responsibility. College gives you the perfect opportunity to set yourself up for success — not only in your studies but financially as well.
Sure, it’d be nice to be able to go out and watch movies every night and go on expensive road trips. Sounds like fun!
But before that can happen, you must get control of your spending habits. Spending money appropriately is one responsibility that takes careful planning and consideration.
Just imagine going to Europe someday and treating yourself to an amazing vacation.
Yes, you read that right.
It is possible to follow your dreams and go on fun adventures in the future. However, to make that happen, you need to start making positive decisions right now.
Establish feasible financial goals, and you will experience long-term success!
Read on to see which five bad spending habits to halt to right away so you can start paving the way to a better financial future.
1. Not understanding wants vs. needs
Being able to determine a want versus a need seems reasonably straight forward, but this is something we all could work on improving.
The biggest problem lies with not correctly categorizing your expenses.
For example, you need textbooks, a computer, and a place to live. You don’t need to buy junk food to help you stay up all night studying or that brand new video game that just came out.
You may be tempted to say “yes” to everything your little heart desires. Unfortunately, if you do that, you could go broke and drop out of college.
Bottom line: Only spend money on what you need.
Here are a few ways to save money and still have some fun without going overboard:
- Go on a picnic at school and enjoy some leftovers from the night before.
- Fly a kite instead of buying the latest video game.
- Split a pizza with a couple of friends to cut down on cost.
- Go to the matinee only for the movies you can’t live without seeing in the theater.
- If possible, ride a bike to school to spend less on car gas.
- Play games at home instead of spending money on an expensive meal and game night out.
2. Spending without having a plan in place
We get it; it’s hard planning for a future financially when you’re just a student.
However, this is where it all begins.
If you’re spending your money on whatever you want whenever you want, then you’re headed for Brokesville fast. Perhaps you’re already there.
What’s the magic formula to save money?
Try creating a monthly budget.
Without a budget, it’s far too easy for money to poof and disappear before your very eyes.
Make it your priority to set some goals so that you don’t go broke like almost every U.S. citizen out there.
In other words, come up with a plan and stick to it. Correcting your lousy spending habits may not happen overnight, but it certainly doesn’t hurt to try.
Set small goals like these:
- Come up with a realistic weekly and monthly budget.
- Set aside a set amount of “play” money for entertainment.
- Calculate how much textbooks and other school necessities cost and where you might be able to cut back.
- Make a meal plan each week instead of overspending on food.
- If there is any money left over from your monthly budget, invest it, or put it in a savings account.
- Always know what the balance is in your account instead of losing track of what you spend.
Follow these tips and come up with your own money-saving goals. Do this, and slowly and surely you’ll achieve greatness. Even better, you’ll have enough saved up for an emergency.
3. Abusing credit cards
It’s common for college students to have a credit card, and in many cases, it’s a good thing because they can use it to build their credit.
Sadly, credit cards come with temptations that lead to spending above your means.
It’s way too easy to get caught up in a cycle of debt.
If you’re having a hard time not buying everything under the sun with your credit card, perhaps you shouldn’t have one.
Or, if you must have one, try limiting yourself to just one credit card with a lower credit limit.
Just because you’re already in debt doesn’t make you a lost cause. Do what you can to kill this habit and prevent overspending going forward.
Pay off your existing debt as soon as possible and then start a system where you pay off the full balance monthly.
Another thing to keep in mind is that overspending on a credit card can negatively affect your credit score.
Why is this the case?
Well, if you can’t pay the minimum payment each month or go over your credit limit, it could harm your credit.
Get a bad credit score when you’re young, and it may affect your ability to get an apartment. Additionally, it turns out that some employers check credit scores before hiring someone.
We’d also like to point out that if you already have student loans, it’s going to be twice as difficult paying off your student loans and credit card debt simultaneously.
Not to mention the interest rates will continue to increase over time. At first, the principal might seem low, but don’t be deceived because the interest will quickly build.
Long story short, if you want to live life with far less stress after college, do what you can to prevent credit card debt.
4. Using student loan money inappropriately
You may be tempted to spend your student loan check on whatever you want. Be that as it may, only use loan money for school and necessary living expenses.
Throughout college, you’re going to get pressured to spend a lot of money on activities such as concerts and parties.
Are you already spending your student loan money on frivolous things? Even if you are, you don’t have to continue. It’s a bad habit you can break.
Instead of caving and allowing FOMO (fear of missing out) to take over, set some limits on your spending (as we discussed in #2).
For example, there are a bunch of concerts you’d like to go to but can’t afford. Or, you may experience peer pressure to spend money on food for a game night, and then your friends conveniently forget to pay you back.
Even though it’s hard, learn to say no.
Take the time to learn which activities you should say no to and what type of situations require you to spend money.
Now, this doesn’t mean you have to go through college without having any fun. It just means you have to spend wisely and use loan money only for what it’s intended.
You’ll feel better knowing you’re only using your money for school and living.
5. Not keeping track of your spending
Another bad spending habit to kick to the curb is not keeping track of your spending.
Chances are you’ll discover you’ve been spending far too much money on eating out or going to the movies.
By observing your spending habits, you can learn how to improve your money-making decisions moving forward. Plus, creating this habit now will reinforce positive spending habits as you get older.
For example, if you’ve subscribed to Netflix, Hulu, Starz, and HBO, maybe it’s time to only subscribe to a couple to stay entertained.
After all, you should be studying — not spending all your time binge-watching!
Are you ready to take the plunge and get your finances in order?
We promise you won’t regret it.
It may seem like a lot of sacrifice right now, but it will pay off (quite literally), in the future.
Break these five bad spending habits, and before you know it, you’ll have enough money set aside to not only stay out of debt but go on that dream vacation.
Deep down, you know it’s essential to start saving and not spend money on frivolous activities. Developing goals and better habits now will be more than worth it in the future.
Logan Square boasts of both comfort and convenient student living in Auburn, Alabama (AU). With oversized student apartments, tailored facilities and amenities, and just steps away from Auburn University, Logan Square is the preferred student accommodation to live, learn and experience student living.