The Center for Economic and Entrepreneurial Literacy Gives Students Tips to Avoid Common Financial Mistakes
WASHINGTON, Sept. 30 /PRNewswire-USNewswire/ — Today, the Center for Economic and Entrepreneurial Literacy (CEEL), www.Econ4U.org, offers college freshmen (and all students) a list of the “Freshman Financial Fifteen” – common financial mistakes made by students and ways to avoid them.
College students have a lot to deal with: New classes, new surroundings, new friends, and adjusting to a new lifestyle away from home. It’s easy to get wrapped up in the college scene and forget to take care of your finances, but making good decisions early will pay dividends later. Here are five financial missteps often made by college students and strategies to avoid them. For the full “Freshman Financial Fifteen” visit www.Econ4U.org.
1. Not budgeting
This is undoubtedly the biggest mistake we college students can make. It is important to set realistic goals to get a handle on your finances so that you know how much you can afford to spend on fun stuff.
2. Only making minimum credit card payments
Freshman year of college is an easy time to get plastic happy and spend more than you can afford. If you’ve gotten into debt, you may think that making the minimum payments on your credit cards is paying down your debt. In reality, only paying the monthly minimum means you’ll end up owing much more in the long run. Most cards have a minimum payment of 4 percent of your balance. If your card has an 18 percent interest rate, it will take more than 10 years to pay off a balance of $3,000, paying more than $1,700 in interest.
3. Overusing your student ID
Most students have a university ID that can carry meal plans, laundry money, bookstore credit, vending machine cash, etc. When you swipe your ID for a new sweatshirt at the bookstore, it may not feel like spending money. But those charges don’t just disappear – you will wind up getting charged for expenses at the end of the semester.
4. Buying a new cell phone
It seems like every month an awesome new must-have cell phone is on the market. It’s easy to fall prey to ads for “free phones” or phones that only cost a dollar. Don’t be fooled, cell phone companies offer deals to lock customers into contracts for years. The real cost of that new phone is hidden in your monthly bill.
5. Not having insurance
Buying any kind of insurance can be expensive, so it is important to assess risk before purchasing coverage. But in college you never know what might happen. If your belongings aren’t covered under your parents’ homeowners insurance what will you do if someone sets off your dorm sprinkler or there is a fire?
The Center for Economic and Entrepreneurial Literacy aims to educate students and young adults on personal finance and economics in unique ways. Managing Director James Bowers, said, “Today’s youth are fumbling around in the dark, financially speaking. It’s critical to teach students basic economic principles that are applicable in everyday life.” For the full “Freshman Financial Fifteen” visit www.Econ4U.org.
CONTACT: Allyson Funk, for the Center for Economic and Entrepreneurial Literacy, +1-202-420-7878