(READ): The Top Five Mistakes College Students Make With Money

College life is one of the most unforgettable parts in everyones life. It is a persons first taste of real independence, and they feel their whole life is ahead of them. But this can also be a time where a college student can make decisions that have repercussions that last for many years.

Mistake # 1: Getting Into Credit Card Debt
Credit card companies prey on college students. They know if they issue cards they will use them. Research shows the average college student has over $2000 in credit card debt. By the time they graduate the average student has over $5000 in credit card debt.
At interest rates of 18% or higher you may be paying off this debt well into your 30′s. Since most college graduates are already cash strapped setting up their lives and beginning to pay back college loans, they opt for the minimum credit card payment. This compounds the problem as the credit card company wants you to do just that and extend your debt, and their profit for as long as possible.

Mistake # 2: Ruining Your Credit Score
In today’s world now more that ever with the tightening credit market, a good credit score is essential to get a car loan, house loan or a personal loan. Poor credit can even make it difficult to get an apartment and utilities without a co-signer.
If you max out your credit limits, don’t pay your bills on time and keep adding credit cards as you max out the ones you have, you will have a poor credit score. Once you graduate from college your credit score may come back to haunt you. Some companies have been known to check the credit scores of potential new hires.
Mistake # 3: Wasting Your Student Loan
Your student loan is intended to finance your education, not your college lifestyle. Your tuition, room and board, and books are the smart ways to spend your student loan money.
Eating out and treating your friends to your declining balance is not. Bankrolling your social life with your student loan money can make life harder if you run out before the semester is over. Once you graduate it will take 10-20 years to pay off student loans. For this reason alone you should streatch your student loan funds.

Mistake #4: Not Budgeting Your Income and Expenses
A budget is an essential planning tool for a college student. It shows you how you need to allocate for bills and expenses and wisely use your money. It helps you to plan ahead by knowing about how much money you will have coming in, and your known expenses shows you where it is going out and when.
Living life paycheck to paycheck and living life to the fullest, without any consideration to where they money is going to come from when you need it is a recipe for disaster. You may find out your college career is abruptly over because you are broke.

Mistake # 5: Choose The Right College Path
I don’t have to tell you college is expensive. You see the bill each semester and the statements on your college loans. If you or your parents have little or no money saved for college you not be able to afford more expensive colleges.
Picking a college that will cost you $12,000 per year as opposed to $40,000 per year can save you tens of thousands of dollars once your college career is over and you pay back your student loans.
For those who are cash strapped, it is not really that important where you spend the first two years in college. You can attend a community college to get your general education requirements, then transfer to another school for your major. Just be sure that the school you want to transfer to will accept the credits from your community college.
In-state public colleges and universities offer a much better education for the dollar than do out-of-state or private colleges. I’m sure if you look at your in-state options you will find a college somewhere in your state that offers the major you wish to pursue.

In Summary
Making smart use of your money and your credit in college will enable you to spend the money your earn after you graduate on the things you really want. You may want a new car, a nice apartment or even buy a house a few years after graduating. Travel may be in your plans as you start your new life.
Remember what you are in college for, an education. You will take away many great memories of your college life. Just be sure you do not take away the nightmares of a ruined financial state with you.
College may seem like it last long, but in reality it is only a short time when you put it into the perspective of your entire life. Many of the choices and decisions you make in college can impact your life far into the future. Make sure they are positive ones!