If you’re preparing to head off to college—or you’re already there—student loans might be a necessary part of funding your education. However, while loans can open the door to opportunity, they can also lead to long-term financial strain if not managed wisely. At First Financial Federal Credit Union, we’re here to help you borrow smarter and avoid the common student debt traps.

Here are some of the most common student loan mistakes to avoid—and smart tips to set yourself up for financial success.

1. Borrowing More Than You Need

Just because you can borrow more, doesn’t mean you should.

It may feel tempting to accept the full amount offered, but taking more than you actually need can lead to unnecessary debt. Before signing on the dotted line, create a detailed budget that includes tuition, housing, books, and essentials. Look for ways to reduce costs—such as buying used textbooks or living with roommates—to avoid over-borrowing.

• Tip: Use long-term budgeting tools or speak with a financial counselor to determine your true borrowing needs.

2. Ignoring Interest Accrual

Should I pay interest on student loans while in school? Absolutely—if you can.

Unsubsidized federal loans and private loans often start accruing interest the moment funds are disbursed. Letting that interest accumulate while you’re in school can increase the total amount you owe after graduation.

• Tip: Even small, regular payments on interest while in school can save you hundreds (or even thousands) over the life of your loan.

3. Not Understanding Loan Terms

Loan types, interest rates, repayment options—these all matter. Many first-time student loan borrowers make the mistake of skipping the fine print. Not knowing whether your loan is subsidized or unsubsidized, fixed or variable, can lead to surprises down the road.

• Tip: Take time to research each loan you’re offered. Ask questions. Know what happens if you defer or consolidate. Knowledge is power when it comes to borrowing smart.

4. Delaying a Repayment Strategy

Responsible student loan management begins early. Start planning before graduation.

Waiting until your grace period ends to think about repayment is one of the most common student loan mistakes to avoid. Mapping out your repayment options early—such as income-driven repayment plans or automatic payments—can prevent missed payments and lower your stress.

• Tip: Set reminders and enroll in auto-pay to qualify for potential interest rate discounts.

5. Assuming You’ll Easily Repay Later

How much student loan debt is too much? That depends on your future income.

Too many borrowers fall into the student debt trap by assuming they’ll land a high-paying job right after graduation. Instead, base your borrowing on your expected starting salary and the industry average.

• Tip: A good rule of thumb is to borrow no more in total student loans than you expect to earn in your first year after graduation.

6. Using Loans for Non-Essentials

It’s easy to swipe your financial aid refund for pizza nights and spring break trips, but using student loans for non-educational expenses increases your debt load unnecessarily.

• Tip: Stick to a spending plan. If you need help creating one, First Financial is here to guide you.

7. Failing to Seek Other Funding First

Grants, scholarships, work-study programs—these should always come before loans. Borrowing should be a last resort, not the first.

• Tip: Reapply for scholarships every year. Many go unclaimed simply because students don’t take the time to search.

8. Ignoring Delinquency or Default Risk

Your loan is considered delinquent one day after a missed payment. If it’s delinquent for 90 days or more, it’s reported to the major credit bureaus, damaging your credit score. If you go around nine months without a payment, your loan may go into default, which can lead to wage garnishment, tax refund withholding, and legal consequences.

• Tip: Always communicate with your loan servicer if you’re struggling to make payments. Early action can prevent serious financial setbacks.

9. Overlooking Deferment or Forbearance Options

If you’re in a tight financial spot, deferment or forbearance can offer temporary relief. Deferment pauses your payments for qualifying reasons, like cancer treatment or military service. Forbearance may be granted for financial hardship or medical residency.

• Tip: These programs can help, but most loans continue accruing interest during this time. If possible, switching to an income-driven repayment plan may be a better long-term strategy.

10. Not Considering Loan Consolidation Carefully

Federal loan consolidation can combine multiple loans into a single fixed-rate payment. It can simplify your finances and help you qualify for certain repayment or forgiveness plans, but it may also extend your term and increase the total interest paid.

• Tip: Weigh the pros and cons carefully. You don’t have to consolidate all loans—you can mix and match based on your situation.

Smarter Student Borrowing Starts Now

College is an investment in your future, and how you finance that investment matters. Avoiding these common student loan mistakes and following practical borrowing tips can help you graduate with less debt and more peace of mind.

Need help navigating your options? First Financial is here with student loan advice, financial wellness tools, and personalized support to guide you every step of the way. As your financial partner for life, we’re here for your next adventure!

Let’s make smart borrowing part of your college journey. Whether you’re looking to secure a new student loan or refinance an existing one, First Financial offers flexible solutions to help you stay focused on your goals. Explore your options and apply today!

Do you want to start a business as a young entrepreneur, but have more enthusiasm than experience? Don’t worry—being excited about a big idea is a great place to start.

Things look different when you’re starting a business under age 18, but that doesn’t mean it can’t be done. Read on for a list of questions to consider before becoming your own boss.

What’s Your Big Business Idea?

If you don’t have an idea for your business—just the idea that you’d like to start a business—start by thinking through your strengths and interests. If you’ve already got a great idea, this advice still holds. Choosing a first-time business that builds on your skills and interests makes your work enjoyable and keeps you motivated when things get hard.

Think through the time you have available for a business. You’re likely a full-time student, and that’s your No.1 priority. A business model that can run on a flexible schedule and be ramped up as you have more time is ideal.

Your business could be a physical or digital good or service. Digital or virtual services typically have lower startup costs (or the initial costs to get going), while physical goods often require more money and management. For instance, if you manufacture a product—say a cool phone case—you’ll likely pay to create, store, and ship your items.

Who is Your Ideal Customer?

Next, think about who your ideal customer is. Will you sell to them one-time, or is your product or service something they will repurchase multiple times?

How will you reach your customers? Social media and online platforms like Etsy, Shopify, or SquareSpace make it easier to expose your business to a potentially huge audience at a lower cost to you. Some of these marketing efforts will cost little more than your time; others will have fees, as well as one-time and ongoing costs you’ll want to research before you dive in.

How Do I Get Money To Start a Business?

You’ve gotta spend money to make money, or so the saying goes. While there are ways to start a small business with little to no money, you may have an easier time starting with at least some money for things like supplies, small business website design and hosting, or advertising.

So, how will you get money to start your business? Unfortunately, minors under age 18 cannot apply for a Small Business Administration (SBA) loan. You also cannot sign binding contracts on your behalf, so getting other first-time business loans would require a trusted adult to cosign for you. Maxing out credit cards to start a business is never a good idea.

That means the best way to start a business as a young entrepreneur is by bootstrapping it—this means you use your own money and resources to get the business off the ground. It could be money from your savings account, from a part-time job, or even money made from selling items you already own. Set a goal for how much you’ll need for your business and make a plan to save up that much.

Ways to Fund Your Business

• Save up money from allowance, chores, or a part-time job.
• Sell items you own but no longer need (be sure to get permission from your guardians).
• Make money through odd jobs like yard work, car washing, or pet sitting.
• Offer skills for hire, like tutoring services for younger kids in a subject you excel at. Or capitalize on your hobbies and interests, like offering graphic design services, dance lessons, and the like.
• Ask an adult for seed money. Is there an adult in your life who believes in your idea and has the means to loan or give you money to start up your business? Be ready with a plan of how you’ll use the money, and how you play to repay them, if that’s the route you go.
• Search for first-time business owner grants and competitions. You may qualify for special programs aimed at teen entrepreneurs, like business plan competitions that offer money to those who win top place.
• Talk with someone at your local bank or credit union to see if they have any resources specifically for new entrepreneurs.
• Consider crowdfunding platforms, like Kickstarter or GoFundMe, to pitch your idea to a larger audience. Make sure you’re aware of the platform fees before starting a campaign; for instance, Kickstarter takes a 5% fee of the total collected, plus payment processing fees between 3-5%. GoFundMe is free to start, but deducts a transaction fee of 2.9% + $0.30 per donation.

What Are the Costs to Keep Your Business Going?

In addition to the money you’ll need just to start the business, there are ongoing costs to keep in mind. For instance, if you’re selling crafty items through an online platform like Etsy, you’ll need to pay a portion of all sales to the platform in order to use it. You’ll also be on the hook for payment processing fees.

Think through all the costs that might come up and make a plan for paying for them. Try our Banzai Earning Extra Income coach to get an idea of the costs involved. Don’t forget that you’ll need to file and pay taxes if you make over a certain amount, even as a minor. Be prepared to hire an accountant to help you with filing business taxes for an LLC for the first time. You’ll likely need to pay those taxes each quarter.

It’s a good idea to open a separate business account to keep track of what you make and spend on your business. Visit a local banking institution to set up an account.

What Are The Legal Requirements?

Make sure you’re aware of your state’s legal requirements to start a business. Most states don’t expressly prohibit kids under age 18 from owning a business, but some states do have restrictions on minors forming limited liability corporations or LLCs, a popular business structure for starting a small business. These states include Colorado, Illinois, Minnesota, and Oregon.

Even if you don’t reside in one of those states, you’ll likely need an adult on board to sign legally binding contracts. So it’s important to have someone who can help you deal with any legal and financial issues that come up.

Maybe you’re hoping to avoid a business license altogether. It’s best to do things legally to avoid issues; check with your local government entities to make sure you have the right business licenses and structures in place.

Other Ideas for New Entrepreneurs

A few more considerations when starting a business:

• Write a business plan: Think through your idea from start to finish, making sure to cover all of the categories mentioned in this article. Include ideas for how you’ll manage the business as it grows.
• Find a mentor: Whether it’s a small business expert at your local banking institution, a business teacher at a nearby high school, or someone from a local youth group, it’s helpful to have a responsible adult you can bounce ideas off and turn to for help working through issues.
• Keep a growth mindset: You won’t do everything perfectly from the beginning, and will likely make potentially expensive mistakes. It’s okay. What matters is that you learn from your mistakes and continue to grow.

Being a young successful entrepreneur takes more than a viral video and a lucky break. But there’s no reason you can’t get a business off the ground if you’re willing to put in the work, be open to ideas from those around you, and make smart decisions.

Article Courtesy of Banzai Learning Center 

Disclaimer

While we hope you find this content useful, it is only intended to serve as a starting point. Your next step is to speak with a qualified, licensed professional who can provide advice tailored to your individual circumstances. Nothing in this article, nor in any associated resources, should be construed as financial or legal advice. Furthermore, while we have made good faith efforts to ensure that the information presented was correct as of the date the content was prepared, we are unable to guarantee that it remains accurate today.

Neither Banzai nor its sponsoring partners make any warranties or representations as to the accuracy, applicability, completeness, or suitability for any particular purpose of the information contained herein. Banzai and its sponsoring partners expressly disclaim any liability arising from the use or misuse of these materials and, by visiting this site, you agree to release Banzai and its sponsoring partners from any such liability. Do not rely upon the information provided in this content when making decisions regarding financial or legal matters without first consulting with a qualified, licensed professional.

Living on your own for the first time can be empowering. It means having independence and all the things that come with it. Some of those things—like not having to share a bathroom—are wonderful. Others—like killing spiders yourself—are not so fun. And leading the pack in the not-so-fun category: bills.

Bills tend to sneak up on us because they don’t fit nicely into a routine. They all have different due dates, some are delivered to your mailbox and others to your inbox, some need to be paid monthly and others yearly, and some have amounts that fluctuate. It takes a lot of wrangling to get them all under control.

The importance of “bill time”

Bills may not stick to a routine, but you sure can. No matter how you keep track of your bills, you still need to take the time to manage them. It can be as simple as 15 minutes, once a week. “Bill time” lets you:

• Gather up any bills received that week (especially the ones that like hiding under your junk mail)
• Locate and/or print out any e-bills received that week
• Input the bill totals and their due dates into your calendar (or notebook, or spreadsheet, or budgeting app)
• See what bills need to be paid that day
• Pay those bills (this could be a combination of paying them online and/or writing out checks and addressing envelopes)
• Mark those bills as paid (and revel in your self-satisfaction)
• Look ahead to see what your payment schedule looks like the following week and month

Sticking to the same day and time for “bill time” is important:

• It creates a routine that’s easy to follow
• It saves time by allowing you to tackle several payments at once
• It keeps you organized and aware of your payment schedule
• It’s the best way to eliminate the “out of sight, out of mind” problem that so many of us have with our bills

So, you have your regularly scheduled “bill time” and you have a stack of bills. Now you need a system to keep track of it all. Luckily, there are so many ways to manage your bills that it’s easy to customize a system that works well for you.

DIGITAL

Dedicated personal finance apps: If your smartphone is basically an extension of your body, using an app might be the best way to manage your bills. Although there are several stand-alone bill payment apps to choose from, you might also consider looking into more comprehensive budgeting apps that include bill management as a feature. If the apps are free, download a bunch of them and take a quick tour to see which one you like best. If you have to pay for an app, do some research to understand the extent of its features before you buy it.

These questions may help you in your search:

• Is it a calendar-based, spreadsheet-based, or list-based app?
• Can you pay bills from within the app?
• Does the app use a notification system to remind you of upcoming bills? Can you customize those notifications?
• Is the app secure? (This is especially important if you need to input your personal or banking information.)
• Is the app supported by your financial institution?
• Is the app compatible with other apps you use (e.g., your digital calendar)?

Digital calendars: Personal finance apps can be helpful, but when it comes down to it, a generic calendar app is enough to help you stay on track. If you’re already a calendar app user, consider creating a sub-calendar with your bill payment schedule. Or, if you don’t like the idea of mixing “bill time” with leisure time, you can use a completely separate calendar app to manage your finances.

Digital spreadsheets: Spreadsheets are typically more of a laptop or desktop solution than a smartphone solution (although some software packages let you access your spreadsheets from anywhere). Most top budgeting programs include custom-designed spreadsheets, but there are also tons of free spreadsheet templates available for download that work with your default spreadsheet software—even Pinterest is full of them!

Reminders/alerts: A reliable reminder app can give your bill management system a powerful boost. If your bill payment app is lacking when it comes to notification options, a dedicated reminder app can make up for it. If you prefer organizing your finances on paper, you can still set up digital alerts to make sure you stay on track. And don’t forget to set up a recurring reminder for your weekly “bill time”!

ANALOG

On paper: Using pen and paper to manage your bills might sound completely old school—especially when there are so many digital alternatives available—but some people have much more success creating a payment schedule the analog way. There’s just something about writing things down and physically ticking items off a list that can make the process feel more “real” and tangible than doing the digital equivalent on your phone or laptop. So if you find yourself slipping on your payments no matter how many apps you download, give paper a try.

Paper calendars: If you’re a visual person, a calendar system is a great way to go. Wall calendars and agenda-style calendars work equally well (the dollar store and free printable templates are the cheapest way to get started). Mark down your paydays and your bills in your calendar, and come up with a consistent way to note when bills have been paid (like highlighting them).

Paper spreadsheets: Some people feel more organized if they have their spreadsheets printed out and sorted in a binder or notebook. A quick search on Google or Pinterest will connect you with tons of free, beautifully designed, and printable spreadsheets that you can use to build your bill payment system.

Pro Tip

No matter what system you end up using, this tip can help you avoid getting hit with a late fee. If you’re using a calendar-based system, write down your bills and their due date on the day on which you plan to pay them (not on their actual due date). It helps you stay ahead of the game and buys you a little extra time if you do happen to slip up.

Article Courtesy of It’s A Money Thing