I could spend all day talking about the financial issues facing college students these days. However, for today’s post I will take a look at common debt traps that college students fall into:
- Keeping up with trends. Don’t worry, I’m not telling you to dress like a scrub when you go out. It’s important to have the proper attire for job interviews, meetings, presentations, and yes even going out. However, for your daily life you should not try to keep up with every single new trend that comes along. Just like the trend your money will fade away. I have friends that always come to the gym in brand name clothing. Is this really necessary? For me an undershirt and shorts do the trick. When you go to your college classes you will notice that many people wear what is convenient while a small percentage dress like they are ready to go on stage at a fashion show.
- Maintaining an unrealistic lifestyle. I would love to play golf more often but I know it’s not realistic. Sure I have some money in my bank account. I know that my income is not aligned with what is needed to maintain a golfing habit. It’s important that you keep your hobbies aligned with your income or you will find yourself stuck in a viscous debt trap.
- Going out more than you should. Obviously it is not a secret that college students enjoy their alcohol. The question you need to ask yourself is, how many times can I go out in a week? Personally, I enjoy a really fun night out once a week or every two weeks. If you find yourself going out more than twice a week you will definitely fall into a debt trap that will take years to pay off. This is another topic that I can write a book about so I will leave you with this point- is it worth drinking less often if it potentially means graduating from college debt free?
- Thinking you will be rich one day. A college education will increase your income earning potential. There is no guarantee that it will make you rich. I have met a few college students over the years that feel they will be rich one day. They use thinking to rationalize their out of control spending and credit card usage.
Yes your college education will likely increase your income when you graduate. NO it is not a valid reason for being out of control with your money as a college student. The funny thing is that a higher income does not always equate to you being rich. The other half of the equation is saving the money that you earn.
It is essential you remember that beyond financial risks, there are certain debt traps that will leave college students flooded in debt by the time they graduate.
What debt trap would you love to get rid of? What debt trap have you eliminated from your life?
This is a guest post from The Studenomist of Studenomics. A personal finance blog aimed at helping you survive your twenties financially while still enjoying life. If you enjoy this article then please consider subscribing to the feed.