5 Common student money mishaps — and how to avoid them
We all have good intentions when it comes to money. Nevertheless, financial slip-ups can happen.
9 min read
Heading off to university is an important rite of passage. It’s an exciting time, and you’ll have more freedom than you’ve ever had before — including with your finances.We all have good intentions when it comes to money. But financial slip-ups can happen, especially when you’re balancing school, a shared flat, new relationships, and maybe even a part-time job. The good news is, some of the financial hiccups that happen to college students can be averted with a little planning and care. Here, we’ll dive into five money mishaps that can occur for uni students and how to avoid them. For many of us, university is the first time we’re living on our own and free to manage our time — and money — with little or no oversight. And this is important! We need to embrace our autonomy and learn to be responsible adults. At the same time, university presents plenty of opportunities to be careless with our finances. Maybe you’re in a new city, and exploring the nightlife scene is catching up to you — and your bank account. Or perhaps the high cost of keeping up with fashion trends has hit you hard. Before you know it, your bank account is empty and the month isn’t even half over. Not only is this stressful, it can cost you even more in the form of fees and fines.
What to do instead: Cultivate healthy spending habitsKeeping an eye on your spending is a skill that pays dividends over your entire life. And curbing your spending doesn’t mean you have to deny yourself all of life’s pleasures. It just means you need to be more strategic about where your money is going. With spending, the little things really add up — so changing small habits can make a big difference. For instance, instead of buying brand-new, try shopping second-hand. You’ll find unique items and do something good for the environment while you’re at it. Rather than meeting friends out for dinner, try hosting a potluck at home. And when it comes to travel and leisure, opt for free local activities and make your summer vacation a bike tour or camping trip. After all, you’ll have plenty of time to stay in boutique hotels after you get your first job. N26 Tip: With N26 Insights, you can track your spending by category. This way, you can identify where you’re spending the most, and spot opportunities to cut back. You can also set spending limits to keep your own biggest impulses in check. We’ve all been there: Somehow, you forget to top up your bank account before a direct debit goes through. Or, you leave your mail unopened until your bills are past-due. Or, you forget to return your library books and start racking up substantial fines. These slips can happen to anyone, but they can end up causing you plenty of headaches, particularly if you miss bills from the local authorities, such as parking tickets.
Most importantly, these problems will probably cost you money in the form of fines. This could be from the company or from the bank where the payment was rejected because there weren't enough funds in your account. What’s more, depending on where you live, these fines can impact your credit score with local reporting agencies. This can make it harder for you later — for example, to get a loan. Just as you can adjust your lifestyle to make sure you wake up in time for class and remember to call your mother on her birthday, there are tools for helping you stay on top of your bills. Direct debits are a great way to keep things simple. Some bank accounts even send you an alert when you have a direct debit pending, so you have time to react before your payment bounces. And when it comes to your bank account, don’t let yourself be avoidant. Check your balance regularly and make sure you have enough to cover your costs so that there are no nasty surprises. Same goes for your mail. Whether it’s a dental bill or a tax statement, the sooner you open it, the sooner you can deal with it proactively. If payment is due, pay the bill as soon as possible so that you don’t forget. If something doesn’t look right, call the relevant company or authorities to sort it out. When you’re a student, your income and spending may not be especially predictable. You may have a seasonal part-time job, scramble together funds through babysitting or gig work, or be living off loans or support from your family. And if you don’t have consistent money coming in, it can be hard to plan a proper budget.But when it comes to organizing your finances, not having a budget can lead to even more problems. You might think you can afford those concert tickets, but you forgot that you spent an extra €60 on school books earlier in the month. When you don’t have a good overview of your incomings and outgoings, you risk going into the red on your bank account. If you want to keep your budget on track, the easiest way is to sit down and, you guessed it: Create a budget. With homework, exams, student jobs, and social obligations, it might be hard to find the time, but it’ll definitely pay off in the long run.Start by reviewing your income. If you have money coming in consistently, your budget will be roughly the same each month. If not, you can adjust it. Next, add up your monthly expenses, from housing costs, food, and public transit to extra ones like subscriptions and carsharing. Use a budgeting calculator to make the process even smoother. N26 Tip: Some bank accounts categorize your spending automatically, like N26’s Monthly Wrap-Up. After you’ve got a list of your income and expenses, you can divide up your income between the different categories. Use your budget as a benchmark for yourself throughout the month. Just like the cost of living, university prices have risen across the globe. So, it’s no wonder that many students have trouble financing their studies or making ends meet. Understandably, it might feel easier to go into an overdraft rather than wait until your next paycheck comes. Here’s the thing: While overdrafts and consumer credit can be helpful in a pinch, both will end up costing you more in fees and interest over the long term. It’s much better to use each of these options sparingly for urgent situations. Some financial experts will talk down to you, telling you not to use an overdraft at all. But you know your financial situation best. It’s more important to look at the fees and interest rates of any debt you take on to make sure you understand the implications. If you’re relying on an overdraft because money is too tight, it’s worth talking to your university about other financing options. You might qualify for student loans or government subsidies. If you’re finding yourself in overdraft due to overspending, then consider cutting back on your consumption. After all, minimalism is in vogue at the moment — and being money-savvy is a great way to make friends and influence people. Saving is a critical money-management skill. It helps you make sure you have the cash you need in a pinch, and allows you to spend money on things like trips or larger purchases. Most importantly, learning to save helps you cultivate healthy financial habits that will last a lifetime. Unfortunately, saving can be really challenging for students. For one thing, you don’t have a lot of cash to spare. What’s more, there are tons of great things to spend your money on. This means many students find themselves without any financial cushion when they suddenly need extra money. For some, it means exiting uni without any savings to speak of. As we’ve said, money is often in short supply while you’re a student. No one is expecting you to save up for a car or a down payment on a home while you’re trying to study and make ends meet. But now’s the time to make saving part of your financial routine, even if the amounts are small.If you can, include monthly savings in your budget. Some banks let you automate your savings each month, transferring your spare change or a designated amount of your paycheck into a separate spot designated for savings. Or, you can open a flexible savings account and maybe even earn some interest.N26 Tip: N26 Smart, You, and Metal memberships come with 10 Spaces sub-accounts for keeping your money organized. If you don’t have any money left at the end of the month for savings, you may want to look at where you could cut back on your spending. Or, you could try to find a lucrative side hustle to earn some extra cash.
Been meaning to set a student budget but don’t know how to get started? N26 Insights automatically categorizes your payments in real time, right in your N26 app. Your 100% mobile bank account also lets you set spending limits, pay in seconds with a virtual card, and transfer money instantly via MoneyBeam. Level up your saving game by upgrading to N26 Smart. This flexible account gives you access to Spaces sub-accounts and other premium features that make money management easier than ever. You’ll get exclusive discounts from top brands like FlixBus, Reebok, GetYourGuide, and more with N26 Perks. Plus, you’ll benefit from a fixed number of free ATM withdrawals and free payments in any currency — all with our N26 student bank accounts! Find the right one for you today.
1. Overspending
2. Missing payments or ignoring bills
What to do instead: Stay alert and organized
3. Not having a budget
What to do instead: Set up a student budget that fits your needs
4. Relying on overdraft or credit
What to do instead: Explore more sustainable options
5. Delaying savings
Save what you can, when you can
Your Money at N26
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