NEW YORK (MainStreet) For many Americans, starting college means taking on a host of new freedoms and responsibilities. Besides handling a rigorous course load, making new friends and adjusting to life on campus, college students are often also faced with the difficult task of managing their own finances for the first time. While some succeed without doing too much damage to their bank accounts, it's all too common for college students to fall into financial pitfalls that can haunt them for years to come.
As a new generation of students heads off to college this fall, MainStreet asked financial gurus to share their biggest money mistakes in college and the lessons they learned. Their stories just might help spare today's college kids from making the same blunders.
Name: Harrine Freeman
Occupation: CEO/Owner of H.E. Freeman Enterprises, which offers financial counseling services
Lives in: Washington, D.C.
Money mistake: Racking up credit card debt
"The biggest financial mistake I made in college was getting a credit card. I got approved for one and signed up for tons of pre-approved offers. I ended up having 13 credit cards by the time I graduated and was $19,000 in credit card debt. I had a savings account but didn't understand how credit cards worked. I got a full-time job but lost my job which was the start of my financial woes.
"I was able to pay off my credit card debt but it took me four years. I am very careful with credit cards today and pay for 95% of my purchases with cash."
Name: Michael F. Kay
Occupation: Certified financial planner and president of Financial Life Focus
Lives in: Livingston, N.J.
Money mistake:Not saving hard-earned cash
"During my years in college, I worked pretty much full time, in addition to going to school full time. I had a variety of jobs, including working in the bookstore, parking cars on the weekend and being a resident assistant. My biggest mistake was not capturing some of the money I made. It all seemed to go, whether on books, supplies or food on the weekends. It was a constant cycle of earning and spending and my stipend check never came soon enough. Had I had the foresight, I would have taken at least 10% from each job and stashed it away. That probably would have allowed me some reserves for job hunting after I graduated. I can see now that a little planning would have made my life significantly easier, but unfortunately, I didn't have the training or awareness to put some away."
Name: Jerremy A. Newsome
Occupation: CEO/Owner of Real Life Trading, which teaches stock market trading and investing for free
Lives in: Nashville, Tenn.
Money Mistake: Bad investments
"As a younger person, you dream of achieving financial prosperity at a very young age. I did everything I could and worked as hard as I could to save up some money, which I invested in penny stocks. That trap has ensnared many college kids and adults because they see it as a cheaper way to invest when many penny stocks are simply scams. I lost about $4,000 in approximately four to five months.
"I've learned that knowledge is power. The stock market isn't rigged, scary or only for the smart or wealthy. Have someone teach you what they know. Learn technical analysis, learn how to do covered calls and invest in companies you know and whose mission you care about. In the end, you'll do just fine."
Name: Shanice Miller
Occupation: Scholarship consultant at DebtFreeCollegeGrad.com
Lives in: Upper Marlboro, Md.
Money mistake: Losing scholarship money
"My biggest financial mistake in college was having a full ride scholarship and then losing one of the scholarships in the package by not being able to check a box online to accept the award because it was grayed out. That one small mistake cost me $4,000. I probably could have asked around more and really tried to fight for it, but I didn't.
"I would tell current high school students and current college students that if they cannot accept all of their awards online, they should manually accept them by signing and submitting the sheet that tells them how to accept the awards. Also, I would follow up with the financial aid department of the school a week after sending in the acceptance letter to make sure that they received it and that all of the awards went through."
Name: Zina Kumok
Occupation: Blogger for Debt Free in Three
Lives in: Indianapolis, Ind.
Money mistake:Not keeping a budget
"My biggest financial mistake while in college was not keeping a budget. I spent too much on eating out and shopping and didn't make sure I had savings left when I graduated. When I got my first job out of school, I had to borrow money from my parents to pay for my first security deposit. I advise students to keep track of how much they're taking out in student loans, to always keep money as an emergency fund and to budget. I didn't realize I was spending hundreds on eating out, bars and more until I started keeping better track of my money."
Name: Andrea Woroch
Occupation:Consumer savings expert
Lives in: Bakersfield, Calif.
Money mistake: Using student loans on travel
"The biggest blunder I made in college was taking out additional student loans to pay for spring break vacation since I didn't max them out on actual school and books. I should have been more diligent about stashing cash from my waitressing job or taking on more babysitting and waitressing shifts to pick up the travel tab so I wouldn't have had to spend several years paying interest on that loan.
"I've learned the importance of setting small financial goals and creating savings plans to ultimately avoid going into debt for travel or other luxury purchases. I find it easy to do this by opening a separate bank account where I put aside a certain amount of funds each week based on my target savings goal and date. I also look for ways to reduce daily and monthly spending by eating out less, doing my own manicures and pedicures, spacing out time between hair salon visits and washing my own car. All these small expenditure reductions add up over time."
Name: Ellie Kay
Occupation: Author of Lean Body, Fat Wallet (Thomas Nelson, 2014)
Lives in: Palmdale, Calif.
Money mistake: Passing up a scholarship for a relationship
"I turned down a full scholarship to a great university because my significant other didn't want me to take it. I stayed at the school I was at and it took twice as long to get my degree, because I had to pay for it as I went along, instead of being able to just go to school and study because of a full scholarship. I took a partial scholarship and had to work full time in order to get through. I've learned that any relationship that asks you to give up your future should be in your past."
--Written by Kristin Colella for MainStreet