Faculty Share Their Money Advice for College Freshmen

Academics and financial advisers explain the do’s and don’ts of college spending.

Academics and financial advisers explain the do’s and don’ts of college spending.
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So your kid is no longer a kid. Your kid is an incoming freshman and going off to college, and you're trying to enjoy that last summer of having him or her around. Somewhere in the midst of this, you're probably not just spending money – on dorm room supplies, books, Kleenex – but hopefully also talking a lot about the green stuff. Because – however and whomever is paying for college – your soon-to-be student will be making a lot of financial decisions without your involvement. Here's what a handful of academics and college financial advisers wish incoming freshmen knew about money.

Think before you spend.

"Credit cards are not ATMs. Credit card balances are loans that have to be paid back-and the interest rates are often high so the balance grows quickly if you only pay the minimum. Only charge what you can pay for that month, and pay your credit card balance in full every month. ... Create a budget and keep track of how you spend your money. ... So many times, students spend money on low-priority things rather than on the things that really matter because they don't know what they're spending their money on, or they don't think about what they really want and don't realize that their wants are limitless and their resources are very limited. ... Keep student loans to a minimum. Borrow only what you must, and be careful about using loan funds to finance things like Spring Break trips. ... There will always be students who have more than you – don't try to keep up with their spending."

Mary Dixon, professor of economics at DePauw University in Greencastle, Ind. She received a bachelor's degree in economics from Southern Illinois University in 1983 and a Ph.D in economics from Southern Methodist University in 1989. Dixon says she remembers blowing it, from a money perspective, shortly after getting to her dorm room in 1979 and using the phone. "Long-distance service was provided by an outside service and was very expensive. I had a $100 phone bill the first month." In today's dollars, that would be $320.86.

[Read: 5 Financial Tips to Set You Apart in College.]

Walking doesn't just burn calories; it saves money.

"As difficult a concept as it may seem now, try not to have a car on campus. The cost of insurance and maintenance alone makes this a bad investment. If you live off campus, or if you have certain reasons, this may not be an option. However, for most students, all of your activities are on campus, and the need to leave campus is very rare. In those cases, there are other students who can provide a ride for you. A side benefit by not having a car is the urge for last minute coffee and meal outings become more difficult, so you will be more likely to remain on campus and save money."

Steve Booker, director of financial aid at Rollins College in Winter Park, Fla. Booker graduated from Rockford College in Rockford, Ill., in 1992 and recently completed his master's degree in business administration at Rollins. He says his money mistake was "eating too much all you can eat pizza at a greasy – but very tasty – place close to campus. I didn't have much to begin with, but went through all of my extra spending money plus gained the freshmen 15 very quickly. I had to get a job for my second semester in order to have spending money."

It's OK to be a hoarder if you're hoarding cash.

"I wish incoming freshmen knew the value of a dollar. What I mean by that is a recognition that a dollar is worth more today than in the future. To that end, they should recognize the value of making and then saving a dollar, and begin saving now to take advantage of the growth of that dollar."

Keith Fevurly, visiting instructor in finance at the Metropolitan State College of Denver. He graduated in 1973 from the University of Kansas and says he did "pretty well with money in college," but he admits he spent more than he saved – "particularly on unnecessary things like beer."

[See: 10 Ways to Save on College Costs.]