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One of the trickiest parts of college is trying to keep everything in balance—including the money in your bank account.
Your financial responsibility shifts after high school, and you have to plan carefully so your money lasts when you are in college. It might be hard to imagine that your account, filled with summer job earnings, gifts, and/or family contributions, could run out before spring finals. But if you are not cautious, the money will disappear quickly. Using credit cards for extra spending power could only create more problems.

“You have to budget,” says Dee Lee, a certified financial planner and author of Women & Money and The Complete Idiot’s Guide to Retiring Early. “You have to make that money last over the year or come February you might be out of money and find yourself saying, ‘I don’t know where it all went.’”

Lee advises making a plan before you head to school—consider everything from books and pizza to the price of shaving cream and cosmetics, travel, and entertainment. If you don’t know how much to budget, call the student affairs office to see if they have estimated monthly student spending guidelines. Remember that where you go to school can have an impact on how much you need to budget. If you are far away from home, you’ll need to plan for travel expenses. If you are in a large city, you may not have to worry about the expenses of a car, but need to budget for transportation.

Budgeting highlights the small expenses like ATM fees, bus tickets, or your daily latte. Track your weekly expenses to see where you spend the most, and contact credit counseling agencies (many states have their own) for free budgeting materials. There are also websites like Mint that help you set up a budget and keep track of your money—or simply use an Excel spreadsheet.

Once you set a budget, keeping close tabs on money flow is crucial. Janet Bodnar, editor of Kiplinger’s Personal Finance magazine, says a checking account and a debit card serve as great budget trackers. “It is very important that [students] learn how to manage cash,” she says.

“Spend one hour figuring out how much you have to spend and stick with it,” says Jim Randel, author of The Skinny on Credit Cards. “Empower yourself by educating yourself.”

Bodnar says students should take responsibility for earning spending money. Students and parents can figure out who will pay for what, but summer earnings should be earmarked for spending throughout the year. “Kids should have a stake in their education,” she says.

Justin Skaggs, a recent graduate of Ohio Wesleyan University, had a straightforward budgeting system that factored in fraternity fees and academic honor society dues. “I try to save as much as I can in the summer,” he says, “and in the fall semester, I try to spend just under half of it.”

Once you are used to budgeting, you learn what you can afford. Marist College student Amy Jacaruso wanted to take advantage of school-sponsored trips. At $25 a trip, the activity was reasonable, and Jacaruso knew it fit her budget because she tracks her expenses. She uses cash from her debit card account and does not have a credit card. “It is a little easier to know exactly what I have in my account,” she says.

The credit question is tricky because many students want a credit card for emergencies. Lee advises having a credit card in the student’s name with a parent as a co-signer and says the limit should not be extravagant. But Bodnar advises against credit cards for students or at least delaying credit until senior year.
“Credit is like lots of other things,” says Sandra Shore, a senior counselor for Novadebt in New Jersey. “In moderation, it is good for you. In excess, it is not.” Many people treat credit cards as an extension of their cash, spending more than they can actually pay back in full. That is not the way to build a good credit score or financial foundation.

“Students have to understand that credit is not free money,” says Lee. “It is a system of borrowing.” If you don’t pay the total amount you owe every month, you will be charged interest on that unpaid balance. But if you do pay the full balance every month, banks will see you are a responsible borrower—and your credit score will reflect that.

You might have an easier time getting a credit card while you are still in school, Randel says, and a solid credit record helps when you want to rent an apartment or buy a car. Your credit can even affect your future employment options, as many employers check credit records.

All experts recommend that students check their credit reports. You are allowed one free credit report yearly from each of the three major credit branches. Stagger one request every four months to stay alert to any problems. Log onto www.annualcreditreport.com, the official site of the Experian, TransUnion, and Equifax credit bureaus, to access your credit report.

University of Dayton junior Alex Bishop doesn’t want a credit card. He uses a debit card because the thought of falling into credit card debt worries him. As a high school student, he budgeted, but it was not easy. “But,” he adds, “I did get better as I did it more.” Right now, Bishop is planning for after graduation. “I am trying to save like crazy,” he says. “I’ll have a lot of loans to pay off when I graduate.”

Tweaking your social activities also cuts expenses, says Ralph Frasca, University of Dayton economics professor and author of Personal Finance: An Integrative Planning Approach. “Just have friends over and hang around in the dorm room,” he says. “Or join a student club, which does not cost a lot.”

Ryan Jordan, a recent graduate from Ohio Wesleyan University, knew he wanted to travel and saved diligently so he could take academic and volunteer trips to Spain and Argentina. Jordan started budgeting and using a credit card in high school and that helped him when he got to college, but he doesn’t carry a balance. “If I can’t pay for it, I don’t buy it,” says Jordan.

It is important to take control of your money while you’re still developing your spending habits. If you learn how to how to budget now, you will have money when you need it as a student, and you will be well prepared for the future.