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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.

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