Avoid these financial errors before you graduate.
Finances can be tricky for students. When you don’t have a lot of cash to begin with then small mistakes with your money can have disastrous consequences. If you’re keen to ensure that you don’t fall foul of the worst student cash catastrophes then, according to online broker Solution Loans, just make sure you avoid these major money mistakes. That way you will avoid gaining a bad credit history, which will make it much easier to borrow when you really need to and you will not need expensive short term loans such as bad credit loans.
Never budgeting with your money
It’s impossible to manage money well if you don’t budget, no matter what stage of life you’re at. That’s especially so if you don’t have a large volume of cash to work with and you’re trying to live frugally. Budgeting is the key to making your student income stretch and making sure you don’t end up penniless for half a term.
Misusing your student loans
If you borrow to pay for study essentials then use the money for study essentials. It may be more fun to buy a ticket to a festival with it but you’ll still have to find the extra cash from somewhere and that can throw your finances off completely. If you borrow money while you’re a student then spend it wisely so that you don’t regret the decisions you’ve made when you’re paying it off in the years after.
Getting into too much debt
The large majority of students leave university with debt today – it has become a fairly standard part of graduation. However, there is a big difference between graduating with $15,000 in debt and graduating with a debt of $45,000. Debt doesn’t magically disappear on graduation. You will have to factor the repayments in to whatever you earn when you’re no longer a student and so the smaller they are the better. If you take on too much debt as a student that could make your graduate life uncomfortably unaffordable.
Overspending all the time
As a student you’re not expected to have the latest pair of sneakers or to own a fancy car. However, there are plenty of educational environments where this kind of one-upmanship can end up encouraging students to overspend. While you’re studying, this is the perfect time to be frugal and to resist the urge to spend on what you don’t need. Whether that’s on clothes, food or holidays, it’s worth keeping your spending down now so that you don’t end up paying for these purchases for years to come.
Forgetting your credit score
The way that you manage your money now could have a big impact over what a lender sees in your credit report in the years ahead. If you have a mobile phone contract and continuously miss your payments then this could be a black mark against your score in the eyes of a prospective lender. If you don’t manage to pay off student debts fairly quickly after graduation then you might struggle to get a mortgage or small business loan. And if you end up defaulting because you’ve taken on far too much debt then this will stay with your financial record for some time.