8 Real-life Financial Mistakes to Avoid in College

In college, you’re balancing a lot. You might be worried about picking the right classes, keeping up with your part-time job, and managing your finances. With so much happening at once, it can be easy to slip up. These eight students opened up about the money mistakes they made in college, so you don’t make the same ones. 

Mistake #1: Purchasing textbooks right away

Before classes start, you’ll probably receive a list of “required” textbooks for the semester. Yet, professors can sometimes change their plans or decide not to use the book at all. Arabella, a University of Central Arkansas student, shares a time her well-intended, early textbook purchase cost her:

“When the booklists were sent out, there were only two books that were deemed ‘required’ by my classes…I bought both of them anyway, in order to be as ready as possible…However, when I went to the class that required the $80 textbook, one of the first things the teacher said is that said textbook isn't necessary unless you want to dig deeper into the subject or were unable to understand the lectures. I've held onto it for the entire semester ‘just in case’, and not once have I needed to open it. I've made back the money since then through working, but I still regret ever buying it to this day.”

Arabella H. University of Central Arkansas

Mistake #2: Letting money sit dormant

Keeping your cash in a piggy bank or under your mattress can feel safe, but it can actually hold you back. When you don’t put your money in a bank account or retirement savings account, you miss out on the interest rates and other perks that help your money grow over time. A student from the University of Houston shares how he learned this common financial mistake the hard way:

“I had collected a decent amount of tip money, which piled up inside a large jar I kept on my desk. I thought that I was being smart by setting this money aside for the future, for larger things that I could look forward to like college… I was informed on the different ways that I could let my money work for me, like investing or even just placing the money into a bank account, where it could accrue interest and grow as you grow for the future. Upon learning this I realized that I had squandered away lots of potential earnings, and that by keeping it dormant it was like it wasn’t even there.”

Grayson M. University of Houston

Mistake #3: Thinking of a credit card as free money

A credit card can be useful in emergencies and in between paychecks when it’s used responsibly. The key is to treat your credit card like a debit card and to charge only what you can pay off each month. Alisson from Valdosta State shares how her misunderstanding turned into a small amount of credit card debt:

“As an eighteen-year-old freshman eager to start building a credit score, I applied right on my birthday, surprised when I was approved for a modest $200 limit. I called it ‘free money.’ This card quickly became a comforting crutch during those first few weeks of independence…I assumed that as long as I made a payment by the due date, I was rock solid. That's when I began to notice that my debt was growing even after making minimum payments. It was a stressful realization that this ‘free money’ came with consequences that I hadn't bothered to understand. It felt like I had just ignored the small print on a sales sign.”

Alisson R. Valdosta State University

Mistake 4: Spending more than you have

When you start earning a paycheck, you may think that you can quit budgeting. However, that’s exactly when it becomes important. Tracking your expenses helps ensure you don’t spend more than you earn. Jonathan shares a time that he withdrew more than the amount in his bank account trying to give back to someone who deserved it:

“Upon graduating from high school, I wanted to show my mother how much I appreciated her support, so I went online and purchased a gift for her. When I gave my mother the gift, she told me that while she appreciated it, she wished that I would have informed her that I was going to make a purchase like that. You see, I had not yet learned how to balance my bank account, and was unaware that the amount shown could possibly not reflect purchases from the days before. My mother explained that I was "overdrawn", and the bank would now take the money that I was short, plus a fee, when I made my next deposit. I asked if she could put some money into my account to cover it, to which she refused. She stated that it would be like she purchased her own gift, and that I would learn nothing. I was not happy, but I understood.”

Johnathan T.  Southeastern Louisiana University

Mistake #5: Forgetting to cancel a subscription

Whether it’s a student-discounted meal kit or a streaming service shared with roommates, subscriptions can make life easier. But it’s important to regularly review them and cancel anything you’re not actually using to save money. Sophia, from UW - La Crosse shares how a forgotten subscription charged her unexpectedly:

“This past summer, I discovered an online ad for a cartoon drawing class, taught by a professional cartoonist. I enjoy being creative, and thought that this seemed like a really interesting opportunity…After the trial ended, I thought it would be a worthy investment to pay for a month of lessons with my own money. However, when the subscription ended, I forgot to go back into the app and cancel it. I didn’t realize that the app would automatically charge you if the subscription wasn’t directly cancelled and that I would be responsible for paying for the next month even if I didn’t use the app.”

Sophia H. University of Wisconsin-La Crosse

Mistake #6: Making an impulsive purchase

Having a business idea can be thrilling, especially if you’re taking steps to make your dream a reality. Though without a financial plan, it’s easy to let excitement cloud your judgment. Depinder, a NYU student, shares a time he made a financial decision without considering its long-term impact:

“A friend and I were talking about building an online Punjabi dictionary. Punjabi is our native language and one of the most spoken languages in the world, but there wasn’t anything like SpanishDict for it. Google Translate was terrible. We figured we could actually make something useful. I got too excited. Before we even wrote a single line of code, I went and bought punjabidictionary.com, punjabidictionary.org, and even punjabidictionary.net thinking we needed to ‘secure the brand.’...My friend asked me a week later why I bought all that stuff before we even had a working prototype. He was right - we ended up building the whole thing on GitHub Pages, which is completely free. The fancy hosting I paid for just sat there doing nothing for months.”

Depinder S. New York University

Mistake #7: Throwing away money

In college, it’s likely the first time you’re in charge of your finances without much parental supervision. If you’re not used to good money habits, you may not know how to budget as a young adult or could be careless with what you do have. Madison from UT - Martin shares a time she threw away money (literally):

“My grandparents have always treated “milestone” birthdays as extra special for the grandkids. I was so excited as I opened my envelope and saw ten $100 bills staring at me. I knew exactly what I would do with it- it was going towards my new car! I made my rounds to my grandparents, thanking them for their gift and my mom tucked it away in a giftbox… What I didn’t realize was my giftbox, left unattended, had fallen on the floor and been snatched up and thrown into a trash bag. A week went by before I started unpacking the gifts from the holiday weekend and realized I didn’t have my birthday cash…My parents and I spent weeks searching. We combed through cars, bedrooms, and trash. We cleaned under my bed, emptied jacket pockets and clothes baskets. Nothing-I had lost it.”

Madison P. The University of Tennessee at Martin

Mistake #8: Being influenced by peers

On a college campus, you’re surrounded by students of all financial backgrounds, and some may be able to spend more than you. It’s important that you don’t let the opinions and money habits of others get the best of you. Elizabeth, a student from the University of South Carolina, shares a time that she regrets giving into financial peer pressure:

“I remember when the Adidas Gazelles first started getting popular around two years ago…One night, I was just scrolling and shopping, something you should never do, and saw these gorgeous brown pairs come up for $160. I bit the bullet and just went for it. I was sick of seeing everyone wearing them, and I wanted to be a part of the fun. I received these shoes about a week later, and was ecstatic. Looking back at it now, I can count on one hand the number of times I have actually worn these shoes.”

Elizabeth K. University of South Carolina

Now that you’re aware of these common money mistakes, you can be more mindful about your own financial future and how to achieve financial success. Think about what matters to you most in the long run, whether it’s creating an emergency fund, having savings in your retirement account, or paying off high-interest debt. Whatever your financial goals are, just know that there may be many setbacks along the way. Yet, it’s not about the mistake; it’s how you bounce back from them that matters.