Financial Planning

Consequences Of Poor Financial Habits

Expenses and consequences of poor financial habits are most likely something your school administration would be concerned with if you were a student on their financial teams. Most schools have financial aid and scholarship committees and they are expected to do a good job of helping students manage their finances. Some schools even have finance offices to assist students with their money management needs. Unfortunately, these finance offices are often overworked and underfunded. This leaves the burden of managing the school’s budget falls on the shoulders of the students.

Consequences Of Poor Financial Habits

How can the school help students better manage their finances? First, let’s look at why financial management is important in the first place. First, it helps you budget your resources, which in turn helps you understand what you need to spend your money on. It also provides you with a realistic understanding of your future income and debt obligations.

This knowledge gives you a strategy for saving for a better future and for living expenses now and in the future. You begin to realize that there may be things you won’t be able to afford right now, but that you can definitely afford them down the road. Expenses of daily life such as clothing, food, gasoline, entertainment and even school supplies are necessities that must be budgeted into your monthly expense estimates. With this knowledge you start to develop financial management skills that will make it easier for you to live within your means for the long term. Expenses and consequences of poor financial habits begin to naturally fall into place.

The second consequence of poor financial habits that college students experience is their work ethic. This is one thing that many parents don’t appreciate. It takes effort and discipline to be successful at college. Many students lack both of these important elements of the work ethic. It doesn’t matter what kind of extracurricular activities you participate in, you must have some work ethic in order to survive in the long run. This one aspect of college students lives on their resumes as references.

The third consequence of poor financial habits related to money management is developing an allowance. You don’t necessarily need to spend your allowance as a lifestyle or as income. You do, however, need to have an allowance. For some, setting up an allowance is too much work and they end up not having one at all. If this happens to you, it’s important to review other options before setting up an allowance.

The fourth consequence of poor financial habits that parents need to consider is shopping on a credit card. Many parents struggle to know how to balance a credit card when it comes to spending to get their children’s items that they really need. One of the best solutions to this problem is to open a credit card account for your child. It’s not only easier for you but it is good practice as well. The first step here is for your children to learn to use the card wisely and for you to learn to monitor their spending on it.

The fifth consequence of these financial decisions you make relates to the issues of credit reports and FAFSA applications. Many times, parents will want to help students with their credit and FAFSA applications. They may even recommend them to family members. It can be a great thing to recommend to friends and family to help your son or daughter with their education. However, making impulsive financial decisions based on impulsive feelings can have very negative consequences in the future.

The sixth consequence of poor financial decisions relates to the high cost of tuition at many colleges and universities. Many parents struggle to help students with the cost of tuition at a private university or college. If you are a parent who is facing this issue, it is time to find out what you can do to help your son or daughter afford school. You can begin by asking the school to offer scholarship money. The costs of tuition at a private university or college can be staggering and the cost of scholarships can often be paid for in full by the student.

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