Student Consumer Information – How to Avoid Financial Catastrophe While in School
Many young people head off to college with a feeling of limitless possibilities. If you’re a student, you may be thinking about how to apply your degree toward your career. With a good degree comes a good job. With a good job comes a nice paycheck, right?
Unfortunately, many students run into financial problems during their years in college and oftentimes in the years after graduation. The money problems can range from significant debt stemming from steep loans to problems related to identity theft.
For more information on these topics, please visit the following pages:
- What Should College Students Do If They’re Victims Of Identity Theft?
- Can I File for Bankruptcy on my Student Loans?
How Financial Problems Can Haunt You for the Rest of Your Life
Money troubles, unfortunately, can interfere with academic performance, which ultimately can impact your chances of landing a good job after graduation. Even worse, a serious financial problem can create significant stress and lead to mental health problems.
A New York Times article reported on finding from the National Survey of Student Engagement that revealed financial worries to be a major source of stress for undergraduates while they are still in school.
The following are some eye-opening statistics students and financial worries:
- About 60 percent of students surveyed reported they often worry about having enough money to cover regular costs.
- Students who spend the most hours at jobs that pay feel the most stress.
- About 60 percent of students who work more than 20 hours a week said their jobs got in the way of school work.
- Finances rank only second to academics in as a drain on students’ mental health.
Students facing serious problems such as debt sometimes need to reach out to consumer attorneys to help them get back on track. Other times, they need to figure out a sensible plan on their own to get their finances in order.
Tips to Avoid Getting into Money Trouble While in School
Financial advisers say students can take a few steps to avoid financial catastrophe while in college:
Beware of credit cards: Avoid piling up the credit card debt. While using a credit card helps establish a credit history, excessive use can cause serious debt problems. It’s important to try to pay off the balance in full each month to avoid tough finance charges and long repayment periods.
Don’t ruin your credit score: A few missed payments combined with other poor decisions can create a black mark on your credit history, which stays with you for seven years. Be careful with your finances.
Stick to a budget: While you might not have a mortgage to pay or kids to feed, you should still create a budget and spend the money you have wisely.
Use your student loan money wisely: You may be on your own and have access to your loan money. It’s important to make sure you spend it on essential school-related expenses. You may be tempted to use the money to splurge on spring break or on concert tickets. You may end up with a mountain of debt you can’t pay off.