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College Life: 7  Red Flags You're Making a Bad Financial Decision
College Life: 7  Red Flags You're Making a Bad Financial Decision
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Money Management

College Life: 7 Red Flags You're Making a Bad Financial Decision

Sheila Brenda Andoi
March 31, 2022

If you have ever made poor financial decisions in the past or developed poor money management habits over time, you've definitely tried to figure out how and where things went wrong. 

Being a successful money manager in college necessitates more than just being able to buy the necessities. It's about being able to deal with the unexpected while also saving a little bit daily, weekly or monthly to build your future wealth.

The truth is many college students don’t pay attention to their finances. Questions such as “where’s the money to save?” or “which money do we have to manage?”  only prove that many of them are never keen on managing even the little they get from parents, guardians, HELB loans, or side hustles and simply choose to ignore their financial wellbeing. 

So, the next time you ask for a loan or make a purchase you're not sure you can afford, look out for these red flags to avoid making a bad financial decision and to learn how to grow from prior financial missteps and budgeting mistakes.

1. You Don’t Think Twice About Adding More Debt

"Ah, that'll be another Ksh1,000! I'm already in debt anyways." 

Does this sound familiar? When you try to rationalise a blatantly bad habit, then it becomes a major red flag.

The problem is that you can end up in more debt than you can manage when you keep adding to it without thinking twice. Psychologists say that it is simpler to maintain unhealthy habits than it is to put in the work required to develop healthy ones.

Solution: Cut on your borrowing as much as possible especially if you’re not using the money on something that will have long-term value to you. Taking a loan for “sherehe” or just to “chill with the big boys” is not wise. What’s even worse is when you keep adding more debt to already existing debt without a repayment plan in mind.

2. You’re Always Under Pressure to Make Purchases

While in college, deals are endless. From “bundles mwitu”- cheap bundles, to various things being sold around the school, you have to be careful of impulse buying.

Making a financial decision under duress, according to Josh Elledge, proprietor of - couponing and money-saving website - is a negative indicator. 

"Unfortunately, time and stress play a significant part in many unwise judgments. If you're facing a financial problem and someone is urging you to make a rapid decision, ignore it," he asserts

Solution: Statements like “Hurry before time runs out!” and “Instant deal for you!” may cause you to stop right away but the truth is that if the offer is good, you will realise it after you have given it some thought and weighed all of your possibilities according to your needs and finances.

3. You Lack Financial Literacy

Ignorance is a significant roadblock to growth and, in this case, financial success. A large percentage of college students are not knowledgeable about money and finances. Many believe in living in the moment and for the moment - You Only Live Once Anyways (YOLO) and taking statements such as “every little money I get na enjoyment ” literally.

Success isn't a single strategy, it's a set of tried-and-true tactics that you customise to your specific situation. 

Solution: Knowledge has never been unimportant, and financial knowledge is no exception. Read books, watch the news, listen to podcasts from financial gurus, visit financial literacy websites like Money254 to get equipped with good financial habits and practices, and keep an eye on what's new and what's popular.

4. You’re Impatient

Every college student has dreams and goals that they want to achieve during their college years and after that. The dream job, the dream life, the dream salary, etc. However, many make the mistake of wanting all that in the blink of an eye.

No confidence in themselves, no passion, no determination, and no willingness to wait and endure before they achieve them. Due to that many have fallen prey to fake pyramid schemes and gambling. 

The East African Institute conducted a survey in 2016 and discovered that 50% of the youth were happy acquiring wealth fast and illegally as long as they were not caught. Impatience is a red flag that you are about to make a poor financial decision.

Solution: Financial success is a process that takes time. Set small achievable goals for yourself. Every time you do so, you will be motivated to work even more toward your ultimate goals. Wanting to be successful one day does not ensure success the next. Be patient.

5. You’re Depending on Money You Haven’t Received

Has someone ever told you “kuna deal nategea iivane” or have you ever told that to someone? It’s also a red flag.

This is frequent for people who are always anticipating and making plans for money either from someone who promised them, a HELB loan or a business they aren’t so sure about.

The danger is, many students splurge money with the excuse that HELB loans will be disbursed soon or their parents/guardians will be giving them a boost at the end of the month, etc.

Solution: An old adage says, "don't count your eggs before they hatch." This is one of the most typical red flags that often lead to financial errors. Never use money that you are expecting from a business or someone as an excuse to spend money now. 

6. You’re Borrowing From John to Pay James

Taking a loan from John in order to pay James or taking a loan from one mobile app to repay a loan from another mobile app are all red flags and clear proof that you are living beyond your means.

Solution: Before you take a loan you should have a clear plan of what you want to use the money for. Or else you will constantly be in an unending cycle of debt. If you already have existing debt, manage it properly by paying it on time to avoid accruing late repayment interest which may taint your finances.

7. You Haven’t Done Your Diligence

Assume that you're in the process of making a small investment in college, for example, a small business/side hustle. Do you know the fine print? Are you certain you understand what you're doing or want to invest in? 

Solution: According to Len Hayduchok, CEO of Dedicated Financial Services, and licensed financial advisor, this is also a red flag.

"You've made a mistake if you can't explain to someone else why you made a financial decision (including) how the instrument works, how you will earn from it, what the positive features are, and, most importantly, what the bad parts are. Every financial instrument, product, or decision has benefits and drawbacks. You've got to be mindful of both," he says.


When you're doing everything you can to stay alive, it's easy to miss the signs that things aren't going as smoothly as they should.

Mastering your money is all about taking control of your finances and figuring out how to manage them in a way that works for you, so you can live in the present while also planning for the future.

Sheila Brenda Andoi is a communicator, journalist, editor, and writer passionate about human-interest stories. You can find her on Twitter @sheilaandoi

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