5 Money Mistakes Every College Student Makes (And How to Avoid Them)

August 15, 2023

We’ve all lightly used the term, “broke college student.” Some of us have even lived it.

But for many students heading off to college this fall, the thought of being broke is no joke. In fact, according to Everfi's Money Matters on Campus Report, 53% of Gen Z students rank money management as the most daunting challenge they face today.

The good news is, with a little financial awareness — and some help from parents and guardians — college students can avoid some of the most common campus cash blunders:

Money Mistake #1: Overspending and Over-drafting Checking Accounts

When students land at college, they suddenly find themselves surrounded by friends who either have more money, or aren’t prone to making — how shall we say it? — the “most financially savvy” decisions. Going out with friends, random shopping sprees, those last-minute Spring Break plans — they can sap students’ checking account quicker than you can shout, “Road Trip!”

What College Students and Parents Can Do:

• Create a budget. Before leaving for school, students and parents should create a process for setting limits and tracking every dollar that goes in and out. Budgeting is a great habit to start now, and students will need it anyway when they get into the “real world.” Learn more about how to make a budget.
• Start a Rewards Checking account. Check for specialized accounts that might be ideal for students traveling far away for school. For example, Security National Bank offers a Rewards Checking option that reimburses ATM withdrawal fees.
• Connect parents to student accounts. One great feature of online banking is the ability to connect a guardian to a dependent’s bank account, where they can monitor spending activity. Whether a student likes it or not, adult supervision is a great way to keep them accountable for their spending habits (plus, it’s a great way for a parent to stay connected without seeming like they’re “hovering”). Parents can also set up automatic monthly deposits from their own account into a student’s account, if needed (which is a much quicker and safer option than trying to wire money).
• Download mobile banking. College students have Apps for just about everything else — so make sure their ability to check funds, pay bills and deposit checks is just one tap away, too. The SNB Mobile App is a quick, convenient and secure way for a student to track finances.

Money Mistake #2: Misusing Credit Cards

According to The Federal Reserve Bank of New York, the average credit card delinquency rate for adults ages 18-29 landed above 5%. Among all age groups these balances were near the 90 day or more mark. This type of behavior can lead to a student piling up thousands of dollars of debt and serious credit damage — all without their parents even knowing! Which brings us to an important life lesson: Credit is a good thing if you build it responsibly, but it can be a disaster if you don’t.

What College Students and Parents Can Do:

• Think twice about every credit card offer. During the first few months of school, students are bombarded by credit card offerings that seem like great deals but usually lead to higher rates — from department store “savings” opportunities at the checkout line, to physical cards that come through campus mail, to credit card reps who actually set up informational booths on campus. A student should NEVER apply for one of these cards without first discussing with a parent or guardian.
• Understand consequences of bad credit. Parents should make sure a student knows that credit cards aren’t “free money,” and misusing them can cause serious damage to their credit and make it more difficult to make a big purchase in the future (like a new car or home). Not to mention, penalties and interest can lead to huge amounts of credit card debt — and students already have enough debt to worry about! 
• Come up with a student loan payment plan. The American Bank Association says more than 70 percent of college graduates begin their career owing an average of more than $29,000 in student loans — and it’s vital that college graduates have a plan for paying this off. Setting up a private appointment with a Financial Aid advisor at the institution can help.

BONUS TIP: Take our free, 5-minute crash course on credit cards »

Money Mistake #3: Getting the Wrong Part-Time Job

While working retail or fast-food might mean a little extra spending money for today, it won’t mean nearly as much to future employers in a college student's chosen career field. Once you get to college, the time has come to pad a résumé — not just a paycheck. But what if I told you there were ways to do both?

What College Students and Parents Can Do:

• Make money as a tutor. For successful students, check out tutoring services at local a local high school or within the college’s academic success center. Many parents will pay upward of $20/hour for a good tutor, and it looks great on a résumé.
• Are you bilingual? Put it to use. Local health care providers, social work agencies and even private companies, for that matter, are always looking for bilingual employees — particularly Spanish speakers — to help communicate with patients and/or customers. They’re usually willing to pay well for it, too. Plus — it’s another great résumé booster!
• Leverage new skills into an internship. Nothing looks as good on a résumé as an actual internship in a college student’s field of study. Students should ask academic advisors and professors for internship opportunities, since educators often times have connections with alumni and other professionals in the field. Sometimes, internships can result in a paycheck and class credit at the same time!
• See if you’re eligible for a “Work Study” position. The federal work study program subsidizes the paychecks of college students who work in qualifying part-time, typically on-campus jobs (everything from campus services to peer mentors to academic assistants). The best part? You don’t even have to leave campus — and many times these opportunities offer chances to study/do homework while still on the job. Make sure you file the Free Application for Federal Student Aid (FAFSA) to become eligible for work study, and attend any on-campus job-fairs — because schools may award Work Study aid on a first-come, first-serve basis. 

BONUS TIP: Whatever job you get, Direct Deposit is the most convenient way to put your paycheck into your checking account. At Security National Bank, we take Direct Deposit from any employer, anywhere in the country. Contact us for more information. 

Money Mistake #4: Being Victimized by Fraud or Identity Theft

According to the Federal Trade Commission, reports of student loan fraud surged more than 120 percent from two years earlier. Identity theft is the fastest-growing crime in the U.S., and college students are particularly vulnerable because of close living quarters, shared devices and increased activity on social media.

What College Students and Parents Can Do:

• Don’t use public wi-fi on mobile devices. Connecting to unsecured public wi-fi opens your device — and your information — to anyone near you.
• Be savvy on social media. Be cautious of sharing information on Facebook, Snapchat, TikTok or whatever other type of social media App is trending. Fraudsters can mine social media posts for info that could help them get past account security questions on financial sites. 
• Be wary of skimming devices. ATMs and Gas Pumps are common places for thieves to steal your card information, through special skimming devices. Learn how to detect skimmers to prevent your card from being compromised.
• Shred documents (and sign up for eStatements). Signing up for eStatements is a safer way to track your account, especially for college students who are living away from home or sharing living space with roommates. When a student does receive important documents through the mail, they should be sure sure to shred any statements, credit card offers or prescription drug labels. Don’t just toss them into the waste basket!
• Be wary of “phishing” emails. These are fake emails, disguised to look like they came from a friend, professor or favorite store, trying to get you to click on a fake offer or link. If you do click, you risk downloading malware or a virus, or compromising all of the personal information on your device. If a student suspects they have clicked on a rogue link, they should contact the college's IT Department right away.
• Do not carry around a social security card. And always keep your wallet, driver’s license and ID cards in a safe place.

BONUS TIP: Take our free, 5-minute crash course on identity theft protection »

Money Mistake #5: Stopping the Scholarship Search

Every year, hundreds of millions of dollars’ worth of scholarships are up for grabs around the country, targeted toward students who are already in college! As long as a student is enrolled, they should NEVER stop applying. 

What College Students and Parents Can Do:

• Keep in touch with a financial aid officer. When it comes to finding scholarships, Financial Aid Officers are the most connected people on a college campus. They’re always willing to keep students posted on scholarships, grants and other forms of financial aid that might be available.
• Use online scholarship sites. Whether you use FastWeb, or a similar site recommended by the college's financial aid department, there are dozens of places for you to browse for scholarship opportunities across the Web.
• Ask employers if they help with college tuition. You might be surprised how many employers are willing to help support a college intern who shows potential — especially if they see themselves hiring that student into a full-time position after graduation. It never hurts to ask!
• Submit a FAFSA every year. Any student looking for financial aid is required to file a Free Application For Federal Student Aid, every single year. Don’t put it off!

What matters most:

Think it’s impossible for a “broke” college student to start saving money? Think again! There's no better time to start preparing for your financial future. That's why at Security National Bank, we offer personalized financial checkups to help college students and parents create and meet their financial goals.