6 Money Mistakes I Made When I Started College

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College is like a nice “pre-adulting” period between moving out of your parents’ house for the first time and having full responsibility over your life. It’s a gradual process to get from one end of that spectrum to the other, of course, and a lot changes from high school graduation mooch-off-your-parents days to college graduation getting-a-real-job-and-supporting-yourself-financially days. I learned a lot about how to handle my finances throughout my college years, but I wish I would have started off on a better foot by avoiding these six mistakes from the beginning.

1. I didn’t have a budget

Let me start off by saying that just because you don’t have a lot of money or expenses doesn’t mean you shouldn’t have a budget! This is actually the very best time to start a budget because it will be very simple but will start building your budgeting habit so when things get more complex, you’re already used to it. Check out EveryDollar for an incredibly simple to create and use app for budgeting. Even if you are living off of student loans and surviving on a meal plan, you can use your budget to track what you’re spending on gas, entertainment, clothes, etc. It’s amazing how much more power you have over your finances when you know exactly what’s coming in and going out.

2. I took the max amount of loans I could – “just in case”

When I started college, I thought that the amount of loans the government was willing to give me was some sort of prize. Wow, they’ll give me even more than I need to cover tuition, books, and room and board! Of course, I had other living expenses that I would need to cover throughout the school year, but there were other (and much better) ways to pay for those things. It didn’t occur to me and my short-sighted mindset at the time that padding my bank account with extra loans meant more to pay back with interest later on and more financial cushion to justify frivolous and impulsive expenditures. If I would have had a budget in the beginning to give me a really clear view of my finances, I would have taken just enough loans to offset the expenses that my current savings and income from my job couldn’t cover.

3. I had the wrong mindset about student loans

I was the first person in my immediate family to go to a 4-year university, so I really didn’t know what I was getting into. My parents and I fell victim to the lies that student loans were an “investment into my future” and “good debt” and the other deceits that the 1.48 trillion dollar student loan industry wants us to believe. The truth is that student debt is not unlike any other debt. Payments are big, interest rates are high, and the monthly bills will be straining your ability to make financial progress for a decade or more. They may be somewhat unavoidable, especially if you’re like me and paying for college all on your own, but there are ways to reduce how much debt you end up with if you have the right mindset.

4. I didn’t work as hard and as much as I could have

I always had a job in college, but they offered low hours and low pay. I also didn’t work full time (or more) in the summer like some other people I knew did. I’m glad I had fun in college, but if I was really committed to it, I probably could have mostly paid my way through and graduated with a much more manageable amount of debt. Plus, going from a lax college schedule to the full-time working world is quite a rough transition, and it would have been a little smoother if I had already gotten used to working a lot of hours.

5. I didn’t think about what I was spending money on

I may have grown up in a very frugal home, but when I first went off to college, I was far more preoccupied with making friends and having a great college experience than sticking to any kind of budget. I just had to live in the nicest dorms on campus and definitely could not turn down an invitation to get late night half-off appetizers at Applebee’s with new friends. I even signed up to spend a few hundred dollars on a Spring Break service trip* on a whim within my first few months of college. Going back to number 1, if I would have had a budget that I was sticking to, I would have thought about these expenditures a little longer before my blowing my money.

*I do have to make a sidenote that volunteer trips ended up being a great way for me to travel on the cheap in college. Instead of fancy beach vacations for Spring Break, I always went on mission trips, and instead of studying abroad, I spent a summer volunteering in Australia. I highly recommend this approach, for a multitude of reasons!

6. I didn’t have a plan for the future of my finances

I started college as a business major and ended up graduating with a degree in nonprofit administration. I basically went from thinking I’d have so much money after I graduated that I didn’t even need to think about it…to thinking I’d have so little money after I graduated that I didn’t even need to think about it. It’s hard for an 18-year-old just starting college to have any real concern about how their current actions will affect the financial situation they find themself in four years later when they graduate, but it would have made a big difference if I had started to think about loan repayment, getting married, buying a house, and all the other major financial events that have happened in my twenties. 

It’s never too early to get your finances in order, and starting college on the right foot will be the gift that keeps on giving!