The Biggest Financial Mistakes Made by College Applicants

Missing Out on Federal Financial Aid  Millions of dollars in financial aid go unclaimed every year because students make the mistake of not filling out the FAFSA (Free Application for Federal Student Aid) or missing the deadline to submit the FAFSA. This form determines eligibility for grants, scholarships, work-study programs, and federal loan programs. In addition, your school might use this form to decide if you are eligible for other forms of aid, such as state or private assistance.

Overlooking Scholarship Opportunities  Scholarships are an excellent way to help pay for your education because these awards don’t need to be paid back. However, getting a scholarship requires some research and effort, and many people miss out on scholarship dollars because the process can be time-consuming. On the other hand, if you can get funding for your education through scholarships, you might be able to avoid taking out loans that you’ll need to pay back as soon as you graduate, so it’s worth taking the time to do the research and fill out the scholarship applications.

Accepting the Total Student Loan Amount Offered  You don't have to accept the entire package, especially if the loan amount is high. You may want to accept the grant and scholarship amount offered to you, but you will need to carefully consider whether the loan amount offered to you is more than you are willing to pay back. Remember that your loan will have interest attached to it, which you will be expected to repay.

Low savings and no emergency fund  College students and young professionals do not practice the habit of saving their allowance or salary. This costs them everything they have and no savings for a rainy day. Having an emergency fund can not only give you a cushion of safety but also leave room for some discretionary expenses, like going out to your favorite restaurant.

No budgeting   Not having a monthly budget is perhaps one of the biggest financial mistakes that students and young professionals should avoid. Simple methods such as using an online expense manager and keeping your money in a safe place so that you are not tempted to spend can go a long way in handling money.

Being disorganized/ not keeping track   An extension of the budget point, as a student, you are used to keeping track of your lessons and other activities. Why not add finances to the list? Using simple apps and organizers for keeping track of your expenses is the first step to managing your money wisely. Many students and young professionals do not realize where the money was spent and end up finishing their cash before the month-end.

Not Using Credit Cards Wisely / Misusing Credit Cards   Young professionals and even students can easily manage to get credit cards, remember, a lot of them end up in credit card debt because They do not use these cards wisely. That is, if you can pay the credit amount on time, it can help you build a good credit score and become financially stable.

Misusing student loans  Borrowing student loans is understandable for paying one’s tuition fees. However, if you divert your student loan payouts for vacations or for partying, it is only going to lead to a bigger cash crunch during your time in college and in the long run.

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