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7 Common College Money Myths
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Posted September 29, 2015
My loans are not just mine, they are also my parents
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This is true in some cases, but a majority of loans are completely your own and that is why it is vital to be responsible with them. When you graduate, loan debt will be filed under your name. There are no bailouts or undo buttons, so be frugal now to avoid regrets in the future.
I always need to eat out with my friends
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Especially if you have a meal plan, eating out is usually an unnecessary expense. Sometimes you may feel pressured to join an outing if you’re the only one staying behind, don’t worry about it. There are plenty of other ways to hang out without spending money. Try recommending a roommate picnic once a week while the weather still cooperates.
Buying a car is vital to my social survival
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With so much constantly going on in and around campus, a car will likely spend most of its time sitting in a parking lot. If you think you need to purchase a car simply because all your friends are, you don’t. Instead, try taking the money you would spend on a car and put it in a savings account. After college might be the time when a car is needed and you’re better prepared for the expenses. In the meantime, you’ll be able to save money and buy a more reliable vehicle than the one you would’ve purchased for school.
No one starts saving money until after graduation
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Saving money should begin as soon and you start receiving an income. It is never too early to start investing money and gaining interest to help it grow. Investing can be done through multiple routes, whether you want to start investing long-term in a Roth IRA, or shorter term through a certificate of deposit. Roth IRA’s are individual retirement accounts that can be contributed to as long as you have an income. Certificate of deposits are issued by your bank or credit union and earn higher interest on savings over a specified length of time. If you choose to start saving now, note that there are penalties if you withdrawal from these account before the specified time is up.
It’s not that important to file my FASFA on time
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The government tries to help as many students as possible who request financial aid, however the money is not unlimited. If you file your free application for federal student aid (FASFA) late, funds may run out and you may be stuck in a financial nightmare when it comes to paying for school.
I need to have a credit card
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Credit cards can be extremely useful, but if you don’t trust yourself with one, don’t get one. A debit card is a great alternative resource that can keep you from getting into financial trouble. Both cards allow you to do things such as purchase items online and are typically safer than carrying cash. The main difference is that a credit card builds your credit, and a debit card does not.
An emergency fund isn’t that important
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College students tend to have a hard time adjusting from life before personal responsibility. This means if your bike breaks, you may forget that the money for repairs needs to come out of your pocket. An emergency fund is one of the first steps a college student should take to gain financial freedom.
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