Don't quit; keep working on your finances one step at a time.

Often we make choices either consciously or not that can harm our future. There is no magical solution that will instantly solve your problems. Here are some things to avoid that will be toxic to your future.

Don’t bother with a budget

Many people don’t make budget because they think they’re boring, unhelpful, or restraining. The purpose of budgets is to give you freedom to spend money without feeling guilty. The restraint from budgets is coming from restraining you from more debt. You don’t have the money, you can’t do something, but you’re also not going  into debt.

Only make minimal payments

The only way I can explain this in words is that you’ve basically decided to sign an agreement with the credit card to make them rich with your money while keeping your self poor. Check out Bankrate.com’s minimum payment calculator to get proof of what I’m saying.

• There different methods to working debt, some people use a snowball approach, and other break it down to snowflakes. Use what method works for you. The best system is on that you can stick with.
• Even when you’re paying your debt, have a portion of your paycheck transferred to a high interest savings account. Take 5-10% of what you pay for debt and automate deposits to build your emergency savings.
• Just keep working at paying your debt month to month and once in awhile put a big amount down to knock the debt down.
• Join No Credit Needed Network and keep track of your progress.
• Find a group of family and friends that support you and your goals.

Paying late or missing payments

So you may have needed some money to go out and eat and use you the money that was set aside for the credit card or you may have skipped it, not a big deal, right? Credit card companies make a killing when this happens, you’re even a day late, most cards will charge you $39 and it’s gets bigger when interest is calculated.

By having a poor payment record, you’re also decreasing your FICO score which determines your rates for car loans and mortgages. It’s a huge loss for you and a big gain for them.

Use your credit card as an emergency fund

One great thing about credit cards is that you can use when your car breaks down on the highway and you need a tow and there’s not enough cash in your wallet.  If you have that cash in savings, you’d immediately pay your card and you’ll have no interest to pay.

An unwise way of spending your credit card is piling every ‘emergency’ on it.  You add interest on top of all those bills and you can be crippled for a very long time. Start an emergency fund. A first goal is to save enough to cover monthly bills, then your next goal might be 2-3 months.

Your Take

What has been some financial mistakes you’ve made? How did you fix them?

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It’s hard to be a responsible college student these days. First, you have to show up to class every day. Second, you have to do your own laundry. Third, you have to try to do both of those for four years and leave without putting yourself in the poorhouse! It’s no wonder that every year, thousands of otherwise intelligent college graduates end up leaving school with not only a degree but a boatload of debt.

Why all that debt? In part because marketers and advertisers have overwhelmed and outworked college students. They make it easy to spend money, easy to get into debt, and when you have the rush of newfound freedom, as many college students do, it’s hard to be responsible when it’s so easy to be irresponsible. So, to help you along, here are five roadblocks you can put in front of yourself to keep you financially honest.

Freeze Your Credit Cards

The classic “money roadblock” that comes to everyone’s mind is to freeze your credit cards. All you do is get a container, fill it with water, put your cards in, and stick them in the freezer. You’ll want to do it in a way so that you can’t read the numbers through the ice, so you might want to wrap them in something first! The idea behind this trick is that it will take you time to get to your credit cards, whether you thaw it out or simply try to smash them out. Hopefully, the time it takes to get access to your credit will remind yourself why you did it in the first place.

Lock In Your Savings

The best way to lock away your savings is to put it in a certificate of deposit. The best CD rates are currently in the 2% APY range, so it’s not incredible, but locking it away will give you better than average returns on your saving and make it slightly harder to spend your savings. On a certificate of deposit, you usually pay 3 or 6 months of interest to break the CD early… hopefully that is enough to keep you from spending it.

Don’t Save Credit Card Numbers

The next time you buy something online, don’t have them save your credit card number. First, it’s safer if you don’t have them save it. If someone breaks into the vendor’s system, they could get access to your information. The second, and more important reason, is that it forces you to get your card each time you want to buy something. Amazon’s One-Click purchase program is brilliant because it takes away all those roadblocks – one click sounds easy right? It’s certainly easier than “add to card, get up and get your wallet/purse, get your credit card, enter in your credit card including security code, confirm purchase” program.

Use Online Savings Accounts

Must like the “lock in your savings” tip above, you can take advantage of high interest savings accounts much in the same way. By putting your savings in a savings account at an online bank, you make it slightly harder to access your funds. If your money is in an online bank, you have to transfer it to your checking account before you can spend it. That transfer can often take up to a week… which gives you time to think about your purchase. In addition to being a roadblock, the interest rates at online banks are typically higher so you get a little bonus as well.

Don’t Carry Cash

If you don’t carry cash and your credit cards are frozen in a block of ice, you can’t spend any money! I was hesitant to list this as a tip because I always advocate carrying a little bit of money in case of emergencies but if you’re always on campus, chances are you won’t need any cash. Any cash you do have will be cash you will spend.

What do you think of these tips? Do you use any yourself? Do you have a good one that I haven’t listed?

Jim writes about personal finance at Bargaineering and can be found at twitter as bargainr.