Broke College Student? Avoid These 5 Money Mistakes
Written by
Heather Taylor
Edited by
Molly Sullivan
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Life as a broke college student, especially amid high inflation and cost of living expenses, easily leads you to feel financially overwhelmed. And if you aren’t careful, you might make a few money mistakes along the way.
Although you might be able to get back on financial track again after mishandling your finances, the best practice is avoiding money troubles altogether.
To help, here are some common money mistakes that broke college students should avoid and what they should do instead.
What To Avoid: Opening a Credit Card
Christel Turkiewicz, a certified divorce financial analyst, chartered retirement planning counselor and owner of A Time to Flourish, said that the number one mistake broke college students should avoid is opening a credit card.
“Not only will it affect your credit score but there is a high probability it will add to your financial woes of being broke as you charge on it without the ability to pay it off, and it adds to your debt,” she explained.
What To Do Instead: Look for Gig Work
Turkiewicz suggested looking for gig work on or off campus.
“My son was often broke in college but was able to pick up gig work either through his college (sweeping the basketball court after games) or through local gig-work jobs (handing out cheese at a grocery store),” she said. “While neither of these jobs was glamorous, they helped with his spending money, provided some humorous stories, and believe it or not, gave him some good, everyday life experiences — such as pride for a good day of work and polishing communication skills by talking to strangers.”
What To Avoid: Eating Out
Louann Millar, leader of student banking at Wells Fargo, said that a common money mistake of broke college students is eating out.
“If you purchase a school meal plan, do not eat off campus, or worse, order food through a delivery app,” she said. “The price of food is already high, but when you add a service charge, tax, delivery fee and tip — the price of your meal has likely doubled. Think twice before making this purchase.”
What To Do Instead: Create a Practical Spending Plan That’s Easy To Follow
Millar believes money mistakes and financial stress can be avoided if students plan properly.
“Plan your spending and take a few minutes at the beginning of each week to plan for things you want to do and where you can make tradeoffs,” she suggested. “Budgeting doesn’t have to be boring or feel restrictive. Start the habit before school starts. Create a spending plan that not only tracks how much you need to make it to Winter Break but also sets aside extra money for Spring Break 2025 (it’s not too early.)”
Avoid: Using Student Loan Funds Frivolously
Joseph Eck, CFP, the owner and financial planner at Stage Ready Financial Planning, said he often hears from educators who regret using student loans to pay for their fun lifestyle in college instead of just their tuition, room and board.
“In one example, a teacher shared that she highly regretted using student loans to fund a vacation, while another teacher shared that he regretted using student loans to pay for regular outings for fancy food and drinks,” he said.
What To Do Instead: Get a Part-Time Job
“Broke college students should strive to fund their lifestyle from part-time employment,” Eck suggested. “Working and going to school is a lot to juggle, but paying many extra years of student loan interest on a vacation is likely a recipe for future regret.”
What To Avoid: Blowing All Your Money Before Homecoming
“At the beginning of the year, you may have money from your summer job or internship, a refund check or student loans,” said Mykail James, the Boujie Budgeter, an accomplished personal finance creator who teaches young professionals how to finance their best lives. “It’s easy to see all the money in your account and want to spend it right away.”
What To Do Instead: Ration Your Funds
“My advice is to estimate how much money you will need to spend each month and ration the money out for the semester or school year,” James suggested. “That way, you don’t end up broke before you’ve even had time to think about homecoming.”
What To Avoid: Not Having Emergency Funds
Taylor Kovar, CFP, founder and CEO at 11 Financial said that broke college students who fail to set aside funds for unexpected expenses can find themselves in a financial crisis when emergencies arise.
“This often leads students to rely on credit cards or loans, compounding their financial troubles,” he said.
What To Do Instead: Build a Small Emergency Fund
Kovar explained that even a small emergency fund can make a significant difference.
“Aim to save a few hundred dollars initially, and gradually increase this amount as finances allow,” he advised. “This fund can cover unexpected expenses without credit cards or loans.”
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