Sometimes when you receive student loans, you may receive a bit more than your tuition actually costs. While it occasionally will just be a few hundred dollars, some students may receive thousands of extra aid. It can be tempting to use the cash for something other than school. Here are a few things you should avoid using your student loan money on.
With many colleges around the United States heading into Spring Break and then with summer vacation just around the corner, it can be very easy to justify dipping into your student loans to pay for the trip. This is exactly what you should avoid. Vacations can also become very costly very quickly, especially if you’re not watching how much you spend.
Another temptation students fall to regarding their student loan money is purchasing a vehicle. A new car sounds exciting and can also be easily justified—good transportation, rides for your friends, weekend trips—but it can also put you greatly in the hole regarding your debt.
Take Out Every Night
It may not seem like much, but delivery, take out, and daily trips to restaurants can quickly add up. Every evening can really put a dent in your savings and over time can cost as much as a new vehicle or a vacation. Ordering out every so often is perfectly okay, but moderation is key.
Every student needs a laptop or computer. But as with take out, you want to pursue electronics with moderation. There’s no need for the biggest TV you can fit in your dorm or every video game console available on the market. With classes and homework, you won’t have time to enjoy them all thoroughly anyway.
Why You Should Use Your Aid Responsibly
College is a great opportunity to learn budgeting for later in life. While it may be tempting to use your student aid for vacations, cars, take out, electronics, or other items, it could be detrimental to your future bank account, credit score, and savings. Spending that much of your loan creates unnecessary debt and, down the road, extra interest.
Instead of using your student aid for these things, keep it for your tuition, school supplies, and emergencies. You may also want to consider turning around and using it to pay off your loan immediately. This is especially the case if you have a loan that accrues interest right away, like an unsubsidized federal loan. It can save you thousands of dollars after you graduate and make the difference in your future.
Taking vacations or purchasing a car can be great during college, but it’s not something you should be spending your financial aid on. If you want to take that trip during spring break or need a new vehicle to get around town, consider a part time job. You should put some in savings, but don’t forget to spend on yourself too!
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