For many teens, college is the first time of financial independence, or at least, the first time they will be managing money on their own. Those who have had some introduction to money management might have an idea of how to budget their money wisely, but others may fall victim to a few typical mistakes. Here are a few of the top college money mistakes most commonly made by teens and young adults:
Not monitoring spending
One of the biggest money management mistakes to make is not knowing where money is going every month. Without monitoring spending and expenses, it is impossible to know if you are living within your means and staying on track. Overspending can be easy to do and is a problem that almost everyone has been faced with at one time or another. Monitoring money can be beneficial for a number of reasons, but mostly it can be the first step toward creating a spending plan.
Not having a spending plan
Along with not monitoring spending, having no spending plan is a major money mistake for college kids. When it comes to school, there are a million and one things to spend money on - from textbooks to school supplies and basic necessities to entertainment and more. Without a spending plan or a budget, it can be harder to make other financial goals or create an emergency savings fund. To avoid making this mistake, college students should come up with a monthly spending budget and keep track of how they spend their money.
Not determining needs vs. wants
Part of making basic spending decisions is determining what we need vs. things that we want. Needs might include expenses such as school supplies, tuition, books and food. Wants are expenses like eating out or entertainment. For college students, most expenses will revolve around school, but determining which costs are necessary and which can be reduced or cut out will help them stay within budget and make better financial decisions.
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