Between paying college tuition and covering the cost of room and board, managing money as a college student can be a challenge.
And the reality is many students aren’t excelling at juggling managing their finances with their classes. The Wisconsin Hope Lab, which aims to find ways to make financing college less cost-prohibitive, recently released a 2018 report that looked at 43,000 students at 66 colleges, universities and community colleges from 20 states and the District of Columbia. The survey found that 36 percent of university students don’t have enough money for enough food — and 42 percent of community college students are hungry or not getting a balanced diet. And according to the findings, 36 percent of university students and 46 percent of community college students reported struggling to pay their rent or utilities. Even college students who are well-fed and aren’t concerned about paying high rent costs walk a financial tightrope every day since many are spending more than they’re earning.
[See: 12 Millennial-Inspired Ways to Spend Less.]
If you want to manage your money better, familiarize yourself with common financial missteps, and learn how to avoid them.
1. Overpaying for a dorm room or apartment. Angie Hovatter, director of student financial aid at Frostburg State University in Frostburg, Maryland, says that she sees young adults paying unnecessarily steep amounts for student housing.
“Students will live in the most expensive dorm because it has the modern amenities when a regular dorm could be just fine. [The] same is true for students who live off campus,” Hovatter says.
For instance, if you paid for a dorm at Frostburg State University during the 2017-2018 academic year, you’d spend $6,490 for a large single room in a dorm, according to the university site. Meanwhile, you would pay $5,980 for a small single dorm room, $4,630 if you’re willing to share a room with another student and $4,590 if you’re willing to have two roommates, according to the university site.
This is pretty common across the country. For instance, if you attend Bowling Green State University and don’t mind sharing a room with two people, you’d spend $2,170 a year, according to the university website. Conversely, if you rent a single room in their most expensive dorm rooms, you’d pay $3,855.
2. Not creating — or sticking to — a budget. Peter Nigro, professor and chair of the finance department at Bryant University in Smithfield, Rhode Island, says that college students need to budget as much as possible. Students should start by adding up how much they have to spend every month and then decide how much money they can afford to spend daily and weekly.
“Do you really need that Starbucks or Dunkin’ [Donuts] coffee?” he asks. “Given that you have [a] limited, if any, income stream, the need versus want decision is very important.”
Of course, you can buy that expensive coffee and other things you don’t really need if you have a budget, says Taylor Spangler, an accredited financial counselor and program coordinator for family and consumer sciences at the University of Florida in Gainesville, Florida. “Students can set a weekly cash budget for spontaneous fun, so they can say yes to activities without blowing their budget,” Spangler says.
3. Neglecting to take advantage of free activities. Nigro says many college campuses are essentially “assisted living for the young” with a lot of free entertainment, from movies to plays to sporting events.
He suggests embracing those opportunities. After all, it’s free. But another reason to consider partaking in as many free or cheap activities that universities offer is to deepen the college experience. For example, as a student at the University of Colorado Boulder, you can visit the Museum of Natural History for free. And if you’re an Oklahoma State University student, you can get into the Gilcrease Museum, which features American history and art, for free. Florida International University offers free movie nights and occasional free stargazing parties at the Stocker AstroScience Center. Every university offers some free and discounted activities for students — and you should be on the lookout for them. It’ll help you get in the habit of looking for affordable entertainment options rather than putting yourself on the path of always looking for the most expensive ways to spend your time (and money). What’s more, adopting that affordable mindset may even help you avoid someday racking up hefty credit card bills.
[Read: 6 Money Management Mistakes Millennials Often Make.]
4. Bringing a car to campus. Some universities won’t allow freshmen to bring a car onto campus, but if you are permitted to have a vehicle, consider leaving your wheels at your parents’ place, suggests Lule Demmissie, the managing director of retirement at TD Ameritrade. She points out that you’re going to have to spend serious money on a yearly parking pass, probably well into the hundreds. And that’s in addition to steep costs for gas and car insurance.
“There’s really no better time to use public transportation, campus trams, bike rentals or ride-sharing services,” Demmissie says.
5. Forgetting to resell college textbooks. According to a 2014 report from the College Board, a nonprofit with the mission of expanding access to higher education, the average college student now spends over $1,200 yearly on books and materials, though some outspoken critics of the findings have suggested that number is too high.
Fortunately, you can often resell your books back to college bookstores and websites like TextBookRush.com and BookFinder.com. But many students don’t do that, says Stacy Sneed, an adjunct professor who teaches public speaking at the University of North Carolina at Charlotte.
“For the course I teach, the university has opted to reuse one book semester after semester rather than adopting a new book each year,” she says. “Many students are required to take an intro to public speaking course, however, many of my former students have opted not to resell the book.” For example, reselling the required textbook — “The Challenge of Effective Speaking in a Digital Age” — could likely net students some decent money. A new copy retails for $149.95, though it can be found for much cheaper prices on online retail store websites.
6. Avoiding talking to loved ones about financial stress. Sneed says she thinks too many students don’t let their parents or guardians know when they are in a financial bind.
“They typically try to handle matters on their own, which sometimes leads to more debt and more difficulties. If students would communicate money matters early on, a lot of headaches, and even financial costs, could often be avoided.”
In other words, don’t carry the financial burden alone. Maybe your parents can lend or give you more money. Maybe they’ll have ideas on how you can save more cash at college. Your parents, after all, have learned plenty about living on a budget, and if they went to college, they know what you’re going through.
And Spangler points out that a lot of college seniors, worried about paying off student loans, should be reaching out to the many resources on campus.
[See: How to Talk to Millennials About Money.]
“There are folks in most financial aid offices and career readiness programs to help students plan for life after graduation,” she says.
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6 Money Mistakes College Students Make originally appeared on usnews.com
