6 Most Common Money Mistakes Students Make

Being a student in Malaysia can be tough on your wallet. 

On top of navigating your social circle and managing your grades, you've got to pay for tuition, textbooks, rent, and all the other expenses that come with being a student. 

And let's not forget about the temptations! Like that new phone, the latest fashion trend, or the opportunity to go on a fun trip with your friends. 

With so many financial demands and temptations, it's easy to make some money mistakes that can hurt you in the long run.

But fear not. In this article, we’re going to share some of the most common money mistakes that students make and give you tips on how to avoid them. 

Let’s dive right in. 

Overspending 

Picture this: you're strolling through the mall, minding your own business, when you spot it. The dress. The one you've been eyeing for weeks. You know you shouldn't, but you can't resist. 

Before you know it, you're handing over your credit card and walking out of the store with a big smile on your face. But that smile quickly fades when you realise that you've overspent and blown your budget. Again. 

Overspending is one of the most common money mistakes that students make. It's easy to fall into the trap of spending more than you can afford, especially when there are so many temptations around. But overspending can have serious consequences, such as debt and financial instability.

So how do you avoid overspending? 

The first step is to recognise when you're doing it. Keep track of your expenses and set a budget for yourself. When you're tempted to make an impulse purchase, ask yourself if you really need it or if it's just a want. And if you do decide to make a purchase, try to find a good deal or wait for a sale.

Remember, overspending can be a slippery slope. But with a little bit of self-control and a budget in place, you can avoid this common money mistake and keep your finances in check. 

Not budgeting

Ah, budgeting. The word that strikes fear into the hearts of students everywhere. It sounds like a chore, a drag, a total buzzkill. But hear me out, budgeting can actually be kind of fun. 

Yes, you read that right. Fun.

Think of budgeting like a game. You're trying to find ways to stretch your money as far as it can go, while still enjoying all the things you love. It's like playing The Sims, but with your own money.

To make budgeting more fun, try to gamify the process. Set goals for yourself, like saving up for a new phone or a weekend getaway with your friends. Make a chart or a graph to track your progress, and celebrate when you reach your milestones.

And let's not forget about the thrill of finding a good deal. When you're budgeting, every ringgit counts. So when you find a great sale or a discount code, it's like you've won the lottery. 

But in all seriousness, budgeting is important. It helps you avoid overspending, debt, and financial stress. So don't be afraid to embrace the budgeting game and make it a fun part of your life as a student. 

 It may require some trial and error, but once you’ve found a budget that works for you, saving more and spending less will become like second nature. 

Relying too much on credit

Having a credit card is like having a little plastic card that says "you can buy anything you want!" But let's be real. Credit cards are like a box of chocolates. You never know what you're gonna get (except for a big bill at the end of the month).

If you rely too much on credit, you may end up spending more than you can afford. It's like trying to go on a shopping spree with Monopoly money. It might feel fun at first, but the consequences are real.

And don't even get me started on interest rates. They're like that one friend who always wants to borrow money but never pays you back. The interest just keeps piling up and before you know it, you're in a hole of debt.

However, it’s still possible to use credit cards responsibly, such as by only using them for purchases you can afford to pay off each month. Remember to always pay your bill on time to avoid late fees and high interest rates. If you have a balance, try to pay more than the minimum payment each month to reduce your overall debt. 

By using credit cards responsibly, you can build a good credit score and avoid unnecessary debt. But never rely on it as your primary source of funding!

Not saving

Don't let the idea of saving money scare you! With a little creativity and a positive attitude, you can make saving money fun and rewarding. 

Think of it like a game. The goal is to save as much money as possible, and the prize is financial security and freedom. It's like playing a game of Monopoly, except the money is real and you don't have to argue with your friends over who gets to be the thimble.

But what if you don't know where to start? First, set a goal for yourself. Do you want to save for a new laptop, a vacation, or maybe even a new pair of sneakers? Whatever your goal may be, make sure it's specific and achievable.

Next, make saving a habit. It's like going to the gym or studying for an exam. The more you do it, the easier it becomes. Try to save a certain percentage of your income or allowance each month, even if it's just a small amount. 

And don't forget to treat yourself occasionally. Saving doesn't mean you have to deprive yourself of all the fun things in life. Just make sure you're still living within your means and your budget.

You can even try setting up a savings challenge with your friends to see who can save the most money in a month, or who can come up with the most creative ways to save!

Ignoring financial literacy

Financial literacy is especially important for students because it sets the foundation for a lifetime of financial stability. Think of it like learning how to swim - you don't want to be flailing around in the deep end when it comes to your finances. 

By understanding the basics of budgeting, saving, and investing early on, you can avoid common financial pitfalls early on and set yourself up for success in the future. 

Don't worry, you don't have to be a math genius to understand them. Just think of it like a puzzle, and each piece you learn will make the bigger picture clearer.

It's not as boring as it sounds, I promise. 

🔥 Here are some resources to get you started: 

• How to manage your money as a student 

• How much should you spend on rent? 

• Should you pay off debt or save for an emergency first?

• 6 Basics of finance that every beginner should know    

Impulse buying

Have you ever gone shopping with your friends and come back with bags full of things you didn't need? That's impulse buying, my friend, and it's a trap that many students fall into.

Sometimes, it's hard to resist the urge to buy something when you see your friends doing it too. It's like peer pressure, but for shopping. But just because your friends are buying something doesn't mean you have to too.

So how do you resist the urge to impulse buy? 

One tip is to make a list of things you actually need before going shopping, and stick to that list. Another tip is to give yourself a cooling off period. If you see something you want to buy, wait a day or two and see if you still feel the same way. More often than not, the urge to buy will have passed.

And let's be real, do you really need that fourth pair of shoes or that fancy gadget that you'll only use once? Probably not. So before you make an impulse buy, ask yourself if it's something you really need, or if it's just something you want in the moment.

The Bottom Line 

Navigating your finances as a student can be challenging, but it's not impossible. 

By avoiding common money mistakes like overspending, not budgeting, relying too much on credit, not saving, ignoring financial literacy, and impulse buying, you can set yourself up for financial success.

Remember, it's okay to make mistakes along the way. We've all been there. The important thing is to learn from them and keep moving forward. Think of it like playing a video game - you might die a few times, but you'll eventually get the hang of it and level up.

And let's be real, who doesn't love levelling up? By taking control of your finances and avoiding these common money mistakes, you'll be well on your way to financial success. 

So don't be afraid to take that first step towards better financial habits. Your wallet (and future self) will thank you.

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