Follows are 10 financial tips for college and soon-to-be college students.
1. Use credit cards sparingly
Use credit cards wisely because this is a chance to establish a solid credit history. Watch the interest rates. Don't be suckered by low introductory rates. Expect the interest rate or annual percentage rate (APR), to climb above 20 percent in three to six months. Don't use the card for routine living expenses or a night on the town.
2. Pay all credit card balances in full
Remember: Credit is a loan - and it doesn't come from The Bank of Dad. That means any balance on the credit card must be repaid. Get a card with a low limit. Shop around for the best deal and read the fine print before signing up. If you move, inform the bank of your new address. Guard your credit card number and close unused accounts.
3. Get the best deal on a checking account
Shop around before opening a checking account. Smaller banks may offer a better deal. Compare fees. Ask if there's a fee for dealing with a teller, including deposits or withdrawals. Ask if there's a fee to use a debit card. Ask about ATM fees. Ask if overdraft protection is part of the student package. If not, ask about linking such coverage to a bank-issued credit card.
4. Keep track of your spending
Use cash whenever possible because counting out the bills underscores the connection between the purchased item and money leaving your wallet. Use a debit card before a credit card for the same reason. Keep track of spending because a budget means nothing without accurate accounting.
5. Set a limit on entertaining
Set a limit for walking-around money and stick to it. Hitting up the ATM for another fistful of crisp money is easy - and guaranteed to deplete your bank account.
6. Keep an eye out for free money
Apply for scholarships. This requires digging and persistence. See what's available. Don't be bashful. If you have a shot, apply. If it's a long shot, how can you go wrong for the price of a stamp?
7. Get a part-time job
Check out college work-study programs. A few jobs may be related to your studies. Otherwise, look for a job with tips such as waiting tables, parking cars or delivering pizza. Summer work is a necessity for many students, but don't overlook internships - they're a good way to get a taste of what you may make a career and establish contacts in the field.
8. Avoid taxes on stupidity
Avoid unnecessary expenses at all costs. Parking fines are a tax on stupidity or laziness. Read the signs and follow the rules. This goes for little things like returning library books or videos. Pay your bills on time or you'll get stuck with a late fee.
9. Don't eat out all the time
Pack a lunch. This will save you big bucks. Don't eat regularly at fast-food restaurants because it will reduce your bank account while bloating your belly. At the supermarket, buy the house brand and increase your savings. Never shop on an empty stomach.
10. Look for student discounts
Clip coupons. Many businesses give students discounts in an effort to establish a relationship that will continue when they enter the real world and start earning a paycheck. Take advantage of the perks. Be on the lookout for deals on plane tickets, pizza, books, clothes - everything. The student newspaper is a good place to start. The Internet can be a gold mine of discounts.
Until next week...
• Bob McDonnell is executive director of Arizona College Planners, L.L.C., a member of the College Planning Network, the National Association of College Funding Advisors and the National Association of College Acceptance Counselors. For questions, email Info@ArizonaCollegePlanners.com.