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    How NOT to Go Broke

    Tips for living on a college student's budget.

    Josh Johnson

    I thought the asterisk was a cute, harmless little star before I went to college. Then, my first week on campus, I was offered 12 CDs for $1 ("with nothing more to buy—ever"), a free T-shirt, a Frisbee and a complete collection of Muppet movies on DVD. All I had to do was sign up for a music club (clubs are fun!) or a credit card.

    Some tunes, a dancing frog—how's a guy to resist?

    Then I saw them. Asterisk. Asterisk. Asterisk.

    Oooooh, pretty stars, I thought.

    Then I started reading the small type that followed the asterisk attached to every great deal. You've heard the old saying, "If a deal sounds too good to be true, then read the asterisk. And carefully." It turns out that a lot of those "great deals" would have hidden costs later on. Like credit cards with low introductory interest rates that shot up within a few months. Or CD-by-mail plans that sound like a good deal—until you forget to send back the ones you don't want and end up owing a lot of money.

    I soon realized that if I was going to make it in college, I needed a budget—and so will you. Your approach to money management will make or break your college experience—just like it will make or break your bank account.

    So let's get real practical with six easy-to-follow steps.

    Step 1: List it out

    A budget must always begin with a pair of lists. On one side of a piece of paper, write down all the sources of income you think you'll tap into while at college: money from a part-time job, a set amount you get from your parents, graduation gift money, change you anticipate spotting along the sidewalks, etc.

    Now, on the other side, write down all of the expenses you will likely encounter. Unfortunately, this list is WAY longer. It should include things like your tithe to a local church, cell phone bills, groceries, car payments and gas, insurance, books, loan payments, medical expenses, miscellaneous school fees, entertainment, gifts for friends, and eating out, as well as money set aside for an emergency. You might want to ask your parents or a college-aged sibling for help making this list.

    Got what you think is a comprehensive list? Now put a dollar figure next to each item, estimating how much you plan to spend over the course of a semester (or month, if you'd rather break it down on a smaller scale). As you think through these expenses, keep in mind how your expenses will be impacted by special events, such as going to Mexico for spring break, or unexpected events, such as when the parking monitor catches you pulling your car into the spot reserved for the school's president. (I knew I shouldn't have done that.)

    Step 2: Set your priorities

    Let me guess: Your column of expenses totaled more than your expected income, at least on the first try. Happens to all of us.

    Step two is where the process gets very painful, as we're forced to separate the "really wanted" from the "really important." This is where priorities and sacrifice enter the picture. You must determine what uses of your money: a) are necessary to pay off your commitments, and b) will really make you happy and help you in the long run.

    Your commitments are the bills you have yet to pay. These must be paid off. Then, you've got to use the money you have left as wisely as possible to do things you'll enjoy. For example, I had a college buddy who poured a significant amount of money into eating out. He was doing something he enjoyed. But when it came time to go on a spring break trip with some friends, he found himself short on funds. He realized the trip was more important to him than some late-night pizza, but it was too late.

    On the other hand, my friend Kim went on a summer mission trip to Northern Ireland. During the entire second semester before her trip, Kim didn't spend a dime on a pizza, a movie or even a cup of coffee. She still managed to have fun despite her sacrifice, and her efforts paid off. The moral of the story? Determine what's truly important to you, then budget to make it happen.

    Step 3: Sweat the small stuff

    Budgeting is an exercise in sweating the small stuff, and this is particularly important for a college student.

    Every coin dropped in a gumball machine or lost between the seats adds up—especially in college. Consider the example of a friend who worked a minimum-wage campus job for five hours per week. That $30 a week he earned could be gone after one night of going out to dinner and attending a movie. Ouch!

    This is why college students need to be so wary of asterisks. Compelling requests for your money will fill your campus mailbox almost every day. If there's no room in your budget, say no.

    Credit cards also can be a student's worst enemy. A good rule of thumb is to never charge anything on your card that you don't already have money to pay for. Pay off your balance in full every month. If you can't do this, take a pair of scissors and make your card into a craft project. When it comes down to it, debt and interest rates are simply not worth one out-of-budget purchase.

    Step 4: Do the math

    Work on your budget until the expenses are less than the income. It's a good idea to ask a parent to double-check your figures.

    After crunching the numbers, a plan like this will not only be a helpful tool; it will also be a way to hold yourself accountable.

    Step 5: Take a test drive

    Don't be discouraged if some areas of your budget don't work out well at first. Time and experience will help you rework the numbers until you've got a budget you can live on. In your first month on campus, track all of your expenses—every dime you spend. When the period is up, use this data to make any necessary adjustments. Frustrated? Baffled? Need help? Call the experts! That's right, Mom and Dad. Or maybe by this time you've met a wise upperclassman who is an accounting whiz or a business major. Take advantage of that friendship and let this new friend offer a little advice on getting your budget right.

    Step 6: Stick with it

    Warning: More than any other place, this is where budgets fall apart. It's a piece of cake to cheat on a budget; it's a personal milestone to stick to one faithfully.

    Being personally responsible for your finances is certainly worthwhile, and it's a critical step in moving away from reliance on your parents toward building a life of your own. So believe me, they'll be more than happy to help you think of ways you can stick to your budget. If you don't follow your budget, you'll likely run up a lot of debt—which will only make you more and more dependent on Mom and Dad.

    With a healthy dose of personal discipline and determined work ethic, you can control your money rather than having your debt control you—no asterisks about it.

    Josh Johnson is a graduate of John Brown University in Siloam Springs, Arkansas.