Learning from and avoiding budgeting mistakes

Budgeting is important in any stage of life, but for college students it takes on added meaning.

Most college students, or anyone who is at the stage in life where they are considering pursuing something like a medical assistant degree or getting dental assistant training, are short on cash, so utilizing proper budgeting techniques is imperative. It’s also good to learn smart spending habits at an early age in order to develop the skill for use later in life.

Smart budgeting – learning from mistakes

Becoming fiscally responsible isn’t an overnight process. It takes time, care, experience and, especially, the ability to learn from your mistakes.

As with pretty much everything else in life, you’re not going to be perfect your first time out, or even your first several times. You will waste money on non-essential, or even remotely beneficial, goods. You will probably get duped into overpaying for services that provide you with very little in return. The key is to learn from those mistakes and be sure not to repeat them.¹

Smart budgeting – mistakes to avoid

At the same time, you do want to avoid those pitfalls whenever possible. Some of the most common mistakes made by people in their 20s include:²

• Not separating needs from desires. Yes, you really want to go see that incredibly expensive show, or buy that new $300 jacket, but do you really need it? Make sure that, for the most part, you only spend money on things you need. That’s even more important for big ticket items such as cars or expensive clothing.
• Relying on credit cards. This may be the biggest budget buster for young people, since it not only affects your immediate finances, but will also likely follow you for years to come. Avoiding getting a credit card altogether is one strategy. However, if you feel that you absolutely need one, make sure to get one with a low credit limit and only use it when you have no other way to pay for something important.
• Envy. If your friends or classmates happen to come from a family with money, or they found jobs that offered relatively high pay for someone at their stage in life, don’t let the desire to keep up with them affect how you spend your money. If you can’t afford to go out on the town with them, or take a vacation, or buy the same car, don’t stretch your budget to do so. It will pay off in the long run.

¹ Jones Donatelli, Jen, “Top Spending Mistakes for College Kids,” Mom.me. http://mom.me/mind-body/5546-top-most-common-spending-mistakes-college-kids/

² Karimi, Sabah, “6 Worst Money Mistakes You Can Make in Your 20s,” U.S. News & World Reports, Oct. 8, 2013. http://money.usnews.com/money/blogs/my-money/2013/10/08/6-worst-money-mistakes-you-can-make-in-your-20s