College is an exciting time of life. For many, it represents the freedom of living on your own: a chance to be independent. Many of those have really been given the boot too, expected to survive on their own without the financial aid of parents. Consequently, many of these students are thrown into the sometimes frightening world of financial independence without the experience or knowledge to find the most frugal opportunities out there.
Common Freshmen Mistakes
They make mistakes. They invest in apartments, insurance policies, and other necessities that they don’t realize are costing them a financial arm and a leg to pay for.
There are so many opportunities out there for cheaper living that they don’t often catch on to until it’s too late. They sign a year contract before playing the field for better opportunities. It hurts at first, but the students learn in the long run.
Wouldn’t it be better if they could be armed with this knowledge before they sign their contracts though? Shouldn’t they know what to bargain hunt for and how to identify a good deal? They’d definitely be happier in their first year of adjustment if they did. The following are five of the most expensive mistakes college freshmen can make coming into their first year at the university.
Don’t Pay Too Much For Housing
First, they sign at the first place that looks nice. They pay way too much for their first year of housing.
Coming from a home where the parents paid the bills, it can be easy to fall into the financial trap of caring about appearances first, and then bills later. They think they need the apartment with the new couches, built-in big screen TV, and private bedrooms. They feel they can’t live without the finer things in life and turn down some of the more “shabby” opportunities, preferring to pay the extra $50 to $200 a month for a better place to live.
It’s only a hundred or two extra a month right? It’s not that hard to come up with? It’s worth the price for not boarding up in that “dump” across the street that merely provides a solid place to live (not of repute), clean quarters (that aren’t clean enough that you can see your reflection in), and a lousy 20” TV (that doesn’t even get ESPN2 or the Bachelorette).
What they miss with this mindset is that the thing they called a dump will turn out to be a palace in the coming years, because they realize that the bare necessities of living don’t require the finer things in life (nor the higher rent that comes with them). In the end, they may find themselves needing the help of a cash advance or two to help make ends meet.
It’s College, Forget the Car.
Second, they take out a loan for a car. Paying just a hundred a month for five to ten years doesn’t sound bad when you don’t have to pay for everything else quite yet. Once you get into the heat of tuition, books, housing, food, entertainment, gas, and car insurance though, it becomes far too expensive to maintain easily.
Unless you have enough money to buy it outright, it’s in your best interests to hold off on purchasing a vehicle quite yet. Wait until your finances are stable and then look into it again.
Luckily you are surrounded by people that have access to a car in your first year. You also likely have access to a public transportation system that for an affordable flat fee and a bit of patience, can get you anywhere in the city.
Save on Insurance
Third, those that do own their car don’t do much digging on their car insurance opportunities. If you are a good student, then it is a buyer’s market for you. Start by shopping around every insurance place you know of, seeking quotes. For each quote, ask about a “good student” discount opportunity and see what companies can offer you. Drop that monthly premium as far as you can so you can save money over time.
These are among the most common financial blunders that incoming freshmen make when they’re trying to find their way in the world. They sign for too nice of an apartment, too big an auto loan, or too expensive of auto insurance that they end up spending $300 – $400 more than they could have been. That may not seem like much to one that has never been financially independent before, but in the long run, that’s going to cost them $2,400 – $3,200 extra for an eight year span. And when you’re counting pennies to meet tuition and book needs, you just don’t have money to be wasting that much.