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Money tips for college freshmen

If schools in your area haven't started again, they probably will open their doors soon after Labor Day.

In my neighborhood, the local weekly newspaper is full of photos of parents and children heading off to class. The kids are, for the most part, joyous. The parents, especially of the youngest students, look a bit apprehensive.

Meanwhile, Austin's main newspaper, the American-Statesman, is focusing on the influx of 50,000-plus University of Texas students. Well, it's actually focusing on the upcoming Longhorns' football season, but the classroom component of the university also gets a nod.

The college kids don't tug at the emotional heartstrings quite as much as do six-year-olds heading off for their first-ever school day. But for those college kids, notably the freshmen, it's just as life-changing an event as the one they encountered 16 or so years ago.

Alpine_sul_ross_university_big_bend And this school experience is going to cost them, and their parents, a lot more money.

With that in mind, ING Direct USA, the largest direct bank, asked its summer interns what financial tips they wished their parents had given them before they headed off to college. Here's what they said and a bit of elaboration from me on the advice.

Start saving: And do so at a young age. If you make any money from high school jobs, open a savings account or CD before you get to college. Stash any monetary gifts from parents, grandparents or friends who helped you celebrate your HS graduation there, too. That way, you'll have a cash cushion if you you need it. If you're managing your own money for the first time when you get to college, you'll likely need that safety net. You'll also learn the importance of saving.

Keep saving: If you have a job while at college, put some of each paycheck into your previously started or a new savings account. If possible, have it done automatically, so you won't be tempted to spend it as soon as you get your check. This will give you cash when you really need it. But you also can use some of it as extra entertainment spending money. It is, after all, college and part of the educational process is learning about new, fun things.

Bank locally: If the bank you used at home doesn't have branch in your college town, consider opening a new local account. That way, any checks you deposit will be posted more quickly, since banks usually hold out-of-town payments longer before clearing them. Also, you'll have easier access to your cash via local, surcharge-free ATMs.

Use credit cards only in an emergency: Before they graduated high school , most kids got offered at least one card. And many took the card companies up on the offer. Ideally, as a young consumer, you have only one piece of plastic. More importantly, you also understand that you need to use it wisely. Just having a credit line available doesn't mean you should spend it on pizza, beer, concert tickets, music downloads or whatever else appeals to young consumers nowadays. Credit card debt you accrue early in college can dog you the rest of your life. So only pull out that plastic when you really, truly need it.

Create a budget and stick to it: For most of your life, you've probably relied on mom and dad to cover the costs of life's necessities. Welcome to the beginnings of the real world. Now you've got to pay for books, clothes, supplies, entertainment and possibly even housing. Prepare a budget for each semester that reflects how much money you'll need for everything. Since this probably is a new exercise, be sure to overestimate, as you'll run into expenses you hadn't realized you'll face.

Eat at home: This is true if you live in the dorm and the cafeteria meals are part of the package. They may not be haute cuisine, but you (or your folks) have already paid for them. Don't waste that money. This is especially important if you live off campus. Eating out every night at a favorite pub will eat through your bank account in no time. Buy enough groceries for a week or two, and make a list before you shop so you don't overspend at the market. Then make your own lunches and dinners.

Split your bills with roommates: If you share an apartment with several friends, split those grocery and other bills with them. Sit down and work out a financial plan you can all agree on to, deciding who's in charge of what bills each month. The key here is equal responsibility. Make sure you each carry a similar financial load so that no one is overburdened. If that happens, you could find that Joe's low bank balance means you'll all be doing your homework by flashlight one month.

Car pool to class: Off-campus students don't need to be driving solo to school. Compare class schedules with your roomies and friends and work out a group commuting plan. You can alternate cars each week and all will save on gas, which is important given its current price. Also, many schools offer a campus bus service that's free for students.

Buy used textbooks: This is a traditional college money-saving tip. And in this day and age, you probably can find books even cheaper online. Check out Amazon.com or Half.com. Plus, in addition to saving cash, you don't waste time standing in line at the campus bookstore.

Keep track of your money: Your bank may track this electronically for you, but you need to know where you're money is going. It's the only way you can fully grasp how much you're spending or overspending. Plus, getting into this habit while you're young will pay off later, when you graduate and get that high-paying job and have a lot more cash to track.

Photo of Sul Ross University building in Alpine, Texas,
taken by moi
during September 2006 West Texas trip with my cousin, Kathy.


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