How to Avoid Common Money Mistakes College Students and Their Parents Make

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Believe it or not, it's time for many to head back to school. For a lot of young people and their parents, that means going off to college.

Financial professional Johnny Gottstein joins us in the FOX40 Studio to give advice to students and parents on how to avoid common money mistakes.

Many families forget to budget, which is big. When you plan your budget, take into account all of the extra expenses like food and fun activities that can add up quickly. Students should also be wary of credit cards. Young people often rack up credit card debt, thinking they will pay it off without considering the cost of school.

Families should sit down and discuss what expenses you have on a monthly and yearly basis. After you account for the necessities - like student fees, housing and books - you can figure out how to prioritize your other expenses.

Making a budget is one thing, but make sure you check in regularly and make sure you're sticking to it.

Establishing healthy credit early can help your kids in the future, like when it comes time to buy their first car, apply for an apartment and purchase a home. A major factor in determining a credit score is the average length of credit history, so the earlier a student can build healthy credit the better.

Help your student get set up with a credit card that has a low balance that could help teach them the basics of good credit. Students need to know to only charge what they need and what they can pay off at the end of the month.

One possibility is to budget for four years at college. Spending more time at school will add to expenses.

Students also often misuse student loans on things that are "wants" and not "needs." Those purchases can rack up debt pretty quickly.

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