Managing Debt

If you decide to borrow to help pay for college, there are some things you should know about taking on debt. It may seem easy to pay today's bills with loans and credit cards you will pay off later, but be careful not to fall into the trap. Accumulating large debts now will mean large payments later.

Credit Cards may be a great thing-- they are convenient, they can help build good credit and are useful in emergencies. But, if used improperly, they will create a high interest debt burden. Use your credit card as a cash substitute, not a high interest loan!

Here are some useful tips to help you keep your finances under control.

• Track it
  Track your spending for two to four weeks to find out where your money is going. Are four trips to the coffee shop a week really necessary?
• Get a plan
  The best way to manage your money over the course of a semester is to sit down and map out a budget. List sources of income, such as scholarships, loans, money from summer jobs and cash from your parents as well as expenses such as tuition, books and groceries.
• Good time money
  If you think you need to buy a new CD or go to a concert or a party every week, make sure there is room for that in your budget.
• Pace yourself
  If you spend, spend, spend at the beginning of the semester, you could be tapped out later. Give yourself a spending limit for each week. Stick to it, and you won't have to eat macaroni and cheese every day in December.
• Go easy with the credit cards
  Use credit cards sparingly. Once you get into the habit of reaching for a Visa, it can be hard to stop. Avoid using credit cards for small purchases, such as sodas and snacks. Who wants to pay interest on a bag of Doritos?
• Set your own credit line
  Afraid you'll spend as long as there's room on the credit card? Call your credit card company and request your credit limit be lowered. Keep at it. Card companies will try to boost up your credit lines so you'll spend more. Tell them "no" each time they try.
• Get real
  You can do what you want, but you can't do everything you want. You're going to have to make some choices. Whatever you choose is going to cost some money. Be realistic.
• Stuff happens
  If you bust your budget on something you really want to do this week, make up for it next week. If there's a great concert that you want to attend, go for it. Just be prepared to buckle down on future spending to make up for it.
• Look ahead
  Whether it's a road trip with friends or an auto insurance bill, if you know a big expense is coming, start putting some money aside to pay for it. Squirreling away $25 a week will make that monster insurance bill a lot less scary.
• Get in touch with your roommate
  Contact your roommate before the semester starts and divvy up expenses. Chat about who will bring a refrigerator and who will bring a microwave. You'll be amazed at all the cash you'll save.
• Spread it out
  You don't have to burn through most of your cash in the first two weeks of the semester. Buy books and lab supplies as you need them. Don't forget to check out prices from online bookstores. They may give you a better deal than the campus bookstore. Buy used books whenever possible.
• Ask for help when you need it
  If you blow through your student loan money or rack up a credit card bill you can't possibly pay, there's only one thing to do. Gather up some courage and phone home. The longer you put it off, the worse things get.

Need help in creating a Budget? Too often, college students get stuck in a when-in-doubt-borrow mentality. Their credit cards get quite a workout, and the credit card companies rack in the interest charges.

How to Choose and Use a Credit Card.

STUDENT LOANS are an essential part of paying for college, but there are some ways that you can limit your total debt.

• Accept only the amount of loans that you really need—don’t always take the maximum if you don’t have to.
• Put some of your on-campus employment earnings or off-campus job earnings toward your bill instead of borrowing that amount.
• Understand the kinds of loans you are receiving, and the terms and benefits of each.
• Consider consolidating different types of loans into one for a more managable payment and interest rate.

What does your Credit Report
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