3 Money Traps to Avoid in College

Photo Courtesy of BusinessWeek.com

By Erika McDaniel

  

Transitioning from High School to College is a new and exciting time for many young people.  Along with the joy and nerves comes a new found sense of freedom.  For many of us, it is our first experience away from home and the rules our parents set for us.  However, along with that freedom comes responsibility. We are now responsible for our time, academics, and our money.  In college, it is easy to fall into money traps that can stay with us long after we graduate.  Here are 3 common money traps college students can fall into.

1.       Credit Card Debt – Credit card companies make it easy (probably too easy) for college kids to get their hands on credit cards.  When I went to college (way back in the dark ages) credit card companies would come to campus for the first couple of weeks of school and sign students up right there on campus.  I’m not sure if they do this anymore – I told you it was the dark ages – but regardless, it is way too easy to get a credit card with a decent credit limit and sky-high interest rates to match.  It’s a fair assumption that as an 18-year-old kid adult you’ll be working to establish credit for yourself.  A credit card seems like a sure fire way to do this, right?  It could be.  Though, it’s far more likely that you’ll use your credit card for everything from trips to the mall and late night pizza runs and find yourself paying off the monthly minimum on hundreds or even thousands of dollars in debt.  If you rack up $2500 worth of debt on your credit card with an interest rate of 13.29 % (which is not great, but not horrible) and pay a minimum monthly payment of $30 it would take over 16 years to pay off the card.  Not to mention that you’d be paying over $6000 in total fees and charges.  You could go to college 4 times over in the time it will to pay off that card.  Hardly seems worth it.

2.       Keeping Up with the Jones’.  Or Kardashians.  Or whomever you want to keep up with – Look, I get it.  I graduated from Howard University which is consistently ranked in the top 3 most fashionable colleges year after year.  You want to go to class and you want to look good.  You need those hot new shoes, that great jacket and those dope jeans.  The new spring collections just hit the stores and that handbag has your name all over it.  The Jordan 15’s are being re-released (again) and you need them!  The truth is – you don’t need them.  Or the bag.  Or the jacket.  Or the jeans.  You are in college to score an education not a contract with Wilhelmina models.  As tempting as it is to make sure you have the latest styles, freshest manicure and cutest haircut, try to resist the urge.  Besides, we’re probably charging those J’s and that LV bag to your credit card and we know where that will get us.

3.       Fast Food Joints – Have you ever looked around a college town or neighborhood and noticed the number of greasy joints in a few block radius?  This is not by accident.  College kids love food.  Fast.  But your daily fast food habit can add up quickly.  Forget about gaining the “Freshman 15.”  Lots of kids gain the “Freshman 30” or “Freshman 50.”  And besides blowing calories, you’re also blowing money.  Let’s just say you eat a value meal ($7) 3 times per week for the approximately 36 weeks you’re in school.  That’s $21/week spent on fast food.  Or, $756 per year.  And this doesn’t include any other meals you might eat out as well.  If you’re school offers a meal-plan, do your wallet and your waistline a favor and opt-in.  It will provide you with a variety of healthy (and not so healthy – let’s be honest) options for you to eat for a fraction of the cost you’d pay to eat out all the time.  Often, colleges require underclassmen to participate in a meal plan.  It’s cost effective and helps you stick to a healthier diet.

There are just some tips to get you started as you make your transition from high school to college.  Have you heard of any other ways that people blow their money at school?  And would you be interested in tips on how to keep more money in your pocket?  Let us know you’re thoughts below by commenting and sharing what you think.  Our goal is to help you become a happy and successful college student!