1

Avoid credit card debt.

According to an advisor at a major university, more students drop out of college due to credit card debt than to academic failure. There are ways to avoid this trap. First and foremost, pay with cash or a debit card and use the credit card for financial emergencies only. If you must use a credit card, only purchase what you can repay from your checking account and pay the bill in full each month to avoid racking up interest on your debt. And whatever you do, do not use credit cards for cash advances – the fees and interest rates typically are exorbitant.

2

Get a good deal on a checking account.

This is one area where it pays to be a student. Many banks and credit unions offer special checking account deals just for students that have no monthly fess and/or no minimum balance requirements. Shop around. Look for banks that offer a free ATM/check card, free online checking and bill pay, and free direct deposit. A useful feature to consider adding to your checking account is overdraft protection, which is a savings account or line of credit that automatically transfers funds to cover your account if it is overdrawn. A single overdraft can result in a fee of about $30, so the value of overdraft protection is obvious. (Even with the protection in place, overdrafts should not become a habit).  

3

Make a budget and track your spending.

The College Board estimates that a moderate budget for miscellaneous expenses (excluding transportation) is $3,700 per school year. Mark Kantrowitz, of FinAid.org, says that families should budget $250 a month for incidentals other than books. To determine your budget, list all your assets – how much money you have and will earn or receive during the school year – and compare it with your expenses, including essentials (rent/board, tuition, transportation, insurance, etc.) and nonessentials (coffee, CDs, etc.) There are many helpful resources online, including a budget calculator from the Federal Student Aid program at http://www.ed.gov/offices/OSFAP/DirectLoan/BudgetCalc/budget.html and a worksheet from Northwestern University at http://chicagofinancialaid.northwestern.edu/pdf/Budwks20071.pdf .

4

Limit your non-education spending.

Of course, a real-life budget is chock full of small expenditures and impulse buys – the late night lattes, iTunes downloads, the giant tub of popcorn at the movie theater, etc. These purchases may not seem like much at the time, but they can add up in a hurry, draining your resources. To get a handle on these expenses, save your receipts from everything you buy for a month. Separate the receipts into categories and add up what you spent in each one. Knowing where your money is going will help you to prioritize your spending habits and keep you from making too many trips to the late night drive-thru. 

5

Mind your minutes.

A Zogby International study reports that 89% of college students have cell phones. One student’s dad complained that the most shocking college-related cost he encountered was “that darned cell phone bill.” To avoid surprises, compare cell phone plans this summer at sites such as BillSaver.com and MyRatePlan.com. And check sites such as Cellreception.com to make sure that there’s good service on campus. Just like budgeting your money, keep track of the cell minutes you typically use, and find a plan that best meets your needs. Paying onerous rates for minutes above what your plan allows is tantamount to paying overdraft fees on your checking account; both can, and should, easily be avoided.

6

Look for student discounts and “free money.”

You will be amazed at how many companies offer student discounts for things like airline and bus tickets, computers, magazines, museums, etc. Visit your school’s student center to find out how to access and take advantage of these discounts. If you are looking to travel abroad, apply for an international student ID card (for a fee) at http://www.internationalstudent.com/ to get discounts on travel, lodging, etc., and check out the Eurail Youth Pass at http://www.raileurope.com/us/rail/passes/eurail_selectpass_youth.htm if you are under 26 and going to Europe. There also are many sources of “free money” in the form of scholarships and grants available to college students. Check out this guide, http://articles.moneycentral.msn.com, on MSN Money or visit www.FinAid.org on the Web. The government also provides a free guide at http://www.fedmoney.org/ to all U.S. grants and student financial aid programs.

7

Don’t drive a car unless necessary.

In a survey conducted by Zogby, students and parents agreed that their biggest expense other than tuition, room, board and books, was car upkeep. You’ll save a bundle if you hoof it or follow Bianca Glenn’s example: She buys a monthly bus pass for $50 to attend Oakland Community College, which is 13 miles from her home in Detroit. Or, if you’re living on campus, consider riding your bike. It will save you money on gas, maintenance and parking, provide you exercise, and help the environment at the same time.

8

Buy used books.

There is no sense buying a brand new textbook for $100 if you can find the same exact book that has been used with little wear and tear for 50 percent less. And unless you are planning on keeping that book as a reference, you can resell the book at the end of the semester or academic year. Just make sure that the edition you are buying is the same one you need for class.

9

Stay away from big spenders.

There are some students who are lucky enough to have ample financial resources during their college years, and they show it through their profligate purchasing habits. Others may not have those resources, but they spend as if they do. If you are on a budget, be careful not to get caught up in situations where you feel obliged or pressured to match the expensive habits of these big spenders.

10

Make smart spending choices.

Once you know how much it realistically costs to live each month, it is up to you to make smart spending choices.  Distinguish between expenses that are “needs” versus those that are merely “wants.” Look for ways to save money on the essentials, and keep the wants to a minimum. Set aside money for all your bills at the first of each month, before you spend money elsewhere. Save for the luxury items you cannot live without and buy them with cash. Remember, do not spend more than you earn and keep to your budget.