Financial advice for incoming college freshmen

A college education certainly isn’t cheap, and neither are all the costs associated with college: a dorm room or apartment; transportation; textbooks; beer.

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How’s the typical 18-year-old supposed to adapt to this whole new level of financial responsibility?

If you’re an incoming college freshman, don’t despair: By taking a few precautions, you can avoid the trap of a crippling debt load. Consider the following tips.

1. Borrow as little as possible. Stories abound of students graduating from college so saddled with student-loan debt that they can barely support themselves. To avoid that fate, apply for as many scholarships and grants as possible. If student loans are unavoidable, opt for subsidized loans when you can. The federal government pays the interest on such loans while you’re in school and during the grace period before repayment begins.

2. Beware of credit-card offers on campus. The second you start college, you’ll likely be accosted with numerous credit-card offers. As tempting as all that plastic can be, recognize it as the potential snare that it is. It’s all too easy to overextend your budget by relying on credit cards.

3. Pay bills the right way. You’re going to have a lot going on throughout the school year, and it will be shockingly easy to forget to pay your bills on time. Use the calendar on your e-mail program or cell phone to remind you when to make payments.

4. View credit-card debt as especially toxic. If you pay a credit-card bill late even once, your interest rate will skyrocket and you’ll be hit with onerous finance charges and late fees. Be determined to pay these bills off in full each month – and if you’re already grappling with credit-card debt, always pay more than the minimum amount due.

5. Devise a spending plan. You probably won’t be able to keep up with all of your new bills until you make sense of where you money is going. Track your spending in writing for one month. Remember to factor in fixed costs such as rent along with other expenses such as entertainment, clothes, haircuts, magazines, sports equipment and the like.

6. Giveyourself a buffer. What’s the most you ever spent on your utility bill? Build that highest number into your monthly budget. Also build in set amounts for emergencies and for money you can spend any way you want.

7. Bank wisely. The bank you choose should provide free checking, online bill paying and many ATMs in your area so you’re not always getting clobbered with ATM fees. You may not have a ton of money at this stage of your life – and that means many banks will charge you monthly fees for failing to maintain their minimum account balances. You may be able to get all monthly fees waived if you have money deposited directly into your account and if you don’t do face-to-face business with tellers. For more ideas about how to get the most – rather than the least – from your bank, check out this “10 Tips” column .

8. Rent with care. Understand that the person whose name appears on the lease and utilities is liable for the bills. If you have roommates, ask your landlord to put more than one name on the lease so the responsibility can be shared. Also, don’t blow a lot of money decorating your very temporary pad. Find furnishings through garage sales, classified ads and used furniture stores.

9. Be on guard against identity theft. Crazy stuff can happen in a dorm setting or a home where several roommates and guests are milling about. Be careful about leaving documents with your Social Security number, bank account numbers and other personal information out in the open, and use strong passwords when conducting financial business online.

10. Don’t pay top dollar on textbooks. At your campus bookstore, write down ISBN numbers and prices for both new and used books and use that information to shop around online. Compare prices at Amazon.com, Barnes & Noble, eBay, Varsity Books, efollet.com and iChapters.com. A comparison shopping site such as BestBookBuys.com also can be come in handy. Be open to the idea of giving less costly eBooks a try. For more ideas about how to buy textbooks on the cheap, read this recent “10 Tips” column .

Sources and resources

• Better Business Bureau
• Financial Planning Association
• Bankrate.com
• MSN Money