I recently received this email from a reader:

I need some Buyer Beware advice on how to choose a lender for a student loan with a parent as co-signer. My 19 year old will be attending university and he has to take out 100% loans. The annual amount is a hefty 50K. When I review the lenders listed on the university’s recommended lender list, I do not have enough knowledge to know how to choose a lender. The interest rate is always variable on any student loan when it is in the student’s name and the parent a co-signer. But there is a lot of fine print attending each loan that I simply do not understand. Given what has happened with the sub-prime mortgages I feel that I might be stepping into a black hole with the student loans. The two categories of sub-prime mortgages and student loans appear to be very similar.

Obviously, it’s going to be impossible to describe every type of student loan in a single post, so instead I will offer some basic tips for evaluating student loan options. I went through this process myself not all that long ago and the scars are still fresh in my mind.

General Categories

In the United States, student loans generally fall into these general categories:

Federal student loans to students
This group of loans include Perkins loans, Stafford loans, Federal Family Education Loans (FFELs), and Ford Direct loans. These loans are guaranteed by the federal government and are generally a very good deal. There are subsidized and unsubsidized versions (subsidized is better, as they’re basically interest-free while the student is in school) - the subsidized one has some pretty strict income requirements. The drawback is that they have a very low cap: $3,500 for incoming freshmen in 2007. In the past, rates on these loans have been very nice, but they are set to start approximating the rates on private loans starting later this year.

Federal student loans to parents
PLUS loans are federal government loans directly to parents for the purpose of paying for college. These are not loans that the student will repay - the parent is solely on the hook for them. Again, the rate used to be quite nice, but the rates are going up later this year.

Private loans
This is the meat and potatoes of it, the type of loan that most people will wind up having to take because other sources didn’t cover the cost of education. These are basically consumer loans from private lenders with no collateral, which often means that the rates are not particularly comfortable.

Six Tips For Comparing Student Loans

It is very difficult to offer concrete advice on which loan offers to take without looking at the options, but here are six tips that can help you separate the good from the bad.

Use the APR to compare the loans, not the “rate” The “rate” that many loans give out is not really very useful for comparison, because many loans with low rates have a ton of additional fees tacked on. The real tool for comparing the loans is the stated APR, which includes the various fees that they tack on. Remember, though, that APR isn’t perfect - it’s only an exact comparison tool for loans that have the same term. This, of course, means that you should…

Shop around thoroughly, regardless of the stated “rate” Many companies thus use a very low “rate” in order to attract your attention, then effectively do a bait and switch, giving you a loan with a very high APR and a low “rate” because of all the other stuff tacked on in the middle there. Thus, don’t toss out loan offers because they have a high rate - they may have low fees in other respects.

If you have difficulty with the APR and term math, ask what the monthly payment will be and multiply it out by the term For example, if you’re trying to compare a ten year and a twenty year loan, find out what the monthly payment will be for each and then multiply that payment by twelve, then by the number of years you’ll have the loan to see how much you’ll be paying total. Obviously, you want the smaller amount here.

Look at fixed-rate loans unless you think the Fed is going to significantly start dropping rates I’m not the right person to be giving long-term advice on where interest rates are headed. My suggestion is to talk to people in the finance industry (especially those you trust) and ask them whether they think the prime lending rate will be on average lower or higher over the next ten years. If they think higher or about the same, get a fixed-rate loan, otherwise get a variable-rate loan. I was luckily able to lock in some fixed rates in 2003 when loan rates were very, very cheap - I actually do better with my money in an HSBC Direct savings account than paying off my loans early.

High origination fees are usually a red flag If an origination fee for one loan is excessively high compared to the others, this may be a red flag, especially on a variable-rate loan, because the rate could skyrocket and the origination fee (tacked onto the overall balance) will really hurt you in the long run. Small differences aren’t usually that big of a deal, but if you’re looking at double or triple difference in origination fees, something’s afoot.

Check your credit report If the borrower or the cosigner have poor credit, the terms for the loan will likely be worse. Thus, one part of the process is to check the credit report of everyone who might be signing for the loan and then ensure that the people with the best credit do the signing.

I’m very happy to be living in Iowa, where things are quiet, we have very strong public education, and we’re also home to one of the best investment opportunities in the country for parents of future college students. That doesn’t apply to me, you might be thinking. Wrong! Iowa’s stellar 529 plan is open to all U.S. citizens:

Any U.S. citizen or resident alien with a valid Social Security or taxpayer identification number and valid U.S. mailing address can open one or more accounts for any future student. There are no income restrictions.

Let’s back up for a second. What’s a 529 plan? From Wikipedia:

A 529 plan is a tax-advantaged investment vehicle in the United States designed to encourage saving for the future higher education expenses of a designated beneficiary. It is named after section 529 of the Internal Revenue Code.

At first, you might think that this is merely a savings account for college, but think again. Here are ten reasons why Iowa’s 529 program is a great investment in your child’s future:

1. Tax free growth As long as you keep the money in the account, the growth of that money incurs no federal or state taxes. If you take that money out and directly hand it to an institute of higher learning, those earnings still incur no federal or state taxes.

2. The account holder retains control of the account, regardless of the age of the beneficiary. Let’s say you invest in this account for years and suddenly your child is 18 and decides to forego college. They can’t access the account; you still control it and the options are up to you: take out money with the tax penalty, wait until they’re ready, or…

3. The beneficiary can be changed at any time to another family member. You could also give that money to another of your children, or even to yourself if you want to go back to school.

4. Money can be used in over 8,000 domestic and 800 foreign institutions. Almost every institution of higher education allows you to use the money in a 529 to attend there.

5. It need not be used just for tuition. You can use it for tuition, room, board, fees, books, supplies, and required equipment. All you need to do is provide proof that the expenses are related to education and within the reasonable limits of the program (a Ferrari is not “required equipment,” for example).

6. Very high maximum contribution limits The maximum contribution is well over $200,000 in almost every state. If you max out your contributions at every step, a 529 can potentially cover an Ivy League education.

7. Very low minimum monthly contribution limits. You don’t need to donate very much at all to keep an account open, making this a viable option for people at all sorts of different income levels.

8. Large lump-sum donations can avoid the gift tax. Let’s say your infant son receives a large gift in an estate. You can put a lump sum of $60,000 into the 529 (or $120,000 if married and filing jointly) and avoid the gift tax on that money, but then you can’t donate any more for 5 years.

9. Assets in 529s are protected from bankruptcy. Let’s say everything goes south and you have to file for bankruptcy. The money you put into the 529 is protected from bankruptcy, so your financial mistakes won’t damage your child’s college education.

10. Iowa residents get an extra bonus. Iowa residents can deduct up to $2,925 in contributions annually per beneficiary from their state income tax. Yes, by putting money in, you get a state tax break.

Surely there’s a drawback… The only major disadvantage of 529 plans is that many of them often have poor investment options, but Iowa’s plan does not: the investments are managed by Vanguard and, from their site, “your only expense is a management fee of 0.62%.”

What about my own state? Almost every state offers a 529 plan of its own; you can compare them all here. Iowa’s plan, however, is open to all U.S. citizens, so if you don’t like your own plan, you can choose Iowa’s plan.

How do I get started? Take a look at the College Savings Iowa site and get more information. It’s a great plan - I use it myself.

How do you use it? Each month, I automatically put a specific amount into my son’s 529 - and I’ve already started one for my unborn child. I’m not putting in enough to pay for his entire college education, but enough to supplement potential scholarships that he may get.

If you’re waiting on starting a 529 for your child until you have time to do the research, you have all of the tools at hand now. It’s a great way to save for your child’s education without tax penalties, and now you have all the information you need and at least one good plan available to you.

Earlier this week, I read an article that really made me reconsider my tentative decision to send my child to private school. More Parents Uproot Their Lives In Search of a Perfect Education tells the story of the O’Gorman family, who basically sacrificed the home their children had grown up in and their lifelong social environment in order to enroll their children in a private school in another state. Why? They felt that the educational options near them were not good enough for their child and they were willing to drop $50,000 a year on that assumption.

In the past, I’ve been a big believer in private school for my child, as I bought into the general idea that not only are America’s public schools vastly inferior to private schools, but they were also far worse than public schools in other countries as well. This fact is consistently pounded into our head by not only the mainstream media, but also by the government itself via the National Assessment of Educational Progress.

What’s the basis for this criticism of America’s schools? One big piece of this criticism comes from documentation produced by the National Assessment of Educational Progress. In particular, in July 2006, they released a report entitled Comparing Private Schools and Public Schools Using Hierarchical Linear Modeling (link goes to pdf of the report).

Right off the bat in this report, when discussing fourth grade reading, the report says “the average private school mean reading score was 14.7 points higher than the average public school reading score.” Wow, that’s a talking point right there, isn’t it? From just that sentence alone, media reports condemning the public schools in America flew forth, probably helping the O’Gorman family to make their $50,000 decision.

But the next sentence is quite interesting: “After adjusting for selected student characteristics, the difference in means was near zero and not significant.” What does that mean? It merely means if they divide the fourth graders up into smaller pieces of pie (such as divisions based on race, income level, and so forth) and compared equivalent pie pieces between private schools and public schools, there was no statistical difference between private schools and public schools.

How can this possibly be? This is the result of a statistical phenomenon known as Simpson’s paradox. In a nutshell, Simpson’s paradox says that the successes of several groups appear to be reversed when the statistics are combined.

Let me show you how this works. Let’s say that we wanted to compare private school students and public school students based solely on the income levels of their parents. Of the 50,000 public school students tested, 49,000 had parents that made less than $200,000 a year, while only 1,000 had parents that made more than $200,000. On the other hand, of the 50,000 private school students tested, only 1,000 had parents that made less than $200,000 a year, while 49,000 had parents that made more than $200,000 a year.

Now, according to this report, all of the students whose parents made more than $200,000 a year, regardless of whether the school was private or public, did roughly the same on these tests - let’s say these students averaged a 90 on the test, while the poorer students averaged a 70 on the test. If you look at just the private schools, their students averaged an 89.6 on the tests, while the public school students averaged a 70.4 on the tests even though all of the poor children did the same and the rich children did the same regardless of their schooling.

This paper fell completely into Simpson’s paradox and actually reports that public education and private education in America are roughly equal, even though private school students score higher. Why? Demographics. Private school test scores are better because the demographics of their students are tilted highly towards groups that do well no matter whether they’re schooled in public or private schools.

If you’re paying for private school, you’re not paying for a great education - you’re paying for demographics. The report actually says that on average, your student won’t do better on standardized tests in private school compared to public school; the only thing that makes a difference is their race, their income level, and their parents’ involvement in their education.

One more thing: you know all of those doomsday stories about how America’s schools are falling behind those of other nations? Those reports are similarly flawed because of Simpson’s paradox.

Take South Korea, for example. Their test scores in math and science dominate America and I do admire their strong education system. But read that article more closely: only 60% of their students of high school age actually attend high school; the “bottom” 40% are actually funneled into separate vocational schools. Thus, when standardized tests compare 12th graders in Korea and 12th graders in the United States, if you individual compare demographic groups, the United States does at least as well as Korea, but if you combine all students as a whole, South Korea appears to dominate the United States. That’s because their high schools, much like private schools in the United States, are full of students whose personal demographics are universally geared towards greater educational success regardless of the schools.

This same phenomenon is true in many countries; the United States is relatively rare in that they place all students in the same high schools and they have compulsory attendance requirements. Most of the nations that exceed the United States in average scores have high schools that are demographically skewed in some fashion.

In short, the best investment you can make in your child’s education is by being involved. Your involvement is a factor you can control - your race and (to a degree) your other demographics can’t be changed. Instead of dropping $50,000 on getting your kid into that ultimate private school, tone down your career a bit and get involved: find out what your child is interested in, be involved and interested in their homework, and let them know that they really are important to you. Love is the one investment in your child that can really pay off.

If you have more than one student loan after college, chances are you’ve been approached by more than one group seeking to consolidate your student loans (if you haven’t graduated yet and have multiple loans… just wait). These groups promise all sorts of things, from a percent reduction in your balance to a low interest rate, to get you to consolidate your loans through them. When I first started receiving these calls, I was completely lost, but after doing some research, asking a lot of questions, and finally going through with it, I discovered several key facts about loan consolidations that are well worth sharing.

If you’re unsure about what a student loan consolidation even is, it is essentially a loan swap in which you get a brand new student loan that equals the combined balance of all of your other loans. A consolidated loan often has a somewhat lower interest rate than the other loans, but this lower rate is balanced out by the fact that the term of your consolidated loan is effectively reset, meaning that a consolidated loan repayment ends at a later date than the original loans - you’ll be paying less interest per year, but you’ll be paying it for more years.

First of all, never, ever give any personal information to anyone who calls you wanting you to apply for a student loan. You have no idea who is on the other end of that line and giving your personal information to them is a sure way to get yourself locked in - to identity theft. This isn’t a suggestion, it’s a rule - never, ever give any of your personal information to anyone who calls you in an unsolicited fashion.

Now, about the things they’ll tell you if you’re thinking about consolidating: in truth, there are really only two benefits to consolidation: it can lower your monthly payments (as well as potentially lower the overall amount you’ll have to pay if you’ve just started repayment) and it also means that you’ll only have to deal with one loan company for all of your student loans - no more multiple payments. However, there is a chance that it may actually increase the total interest you might pay over the life of your loans if you’re not careful. Some lenders will make other claims, such as stating that it will help your credit report out, but that’s largely false - the formula that generates your credit score accounts for multiple student loans without breaking a sweat. Let me repeat: consolidation of student loans will not affect your credit history.

How will you know if a student loan consolidation will save you money? There’s really no way of knowing without running all the numbers yourself, and that can be fairly complicated. However, if you’re very early in the life of your loan, you can get a pretty accurate number to work with by multiplying each of your loans by its respective interest rate and adding them together, then dividing that number by the total of all of your loans. For example, let’s say you had two loans for $20,000 each at 7.5% interest, and one loan for $15,000 at 8.5% interest. Take $20,000 and multiply it by 7.5%, which gives you $1,500 (and you have two of those, so it’s $3,000 total), plus $15,000 times 8.5%, which is $1,275, giving you a total annual interest of $4,275. All of the loans added together are $55,000, so divide $4,275 by $55,000 to get 7.77%. If your consolidated loan doesn’t beat that by at least a little, it’s not worth consolidating, and the older your loans are, the greater the difference needs to be to consolidate. If you’re past the five year mark or so, it’s almost never worth consolidating because the interest rate benefit will be eaten up by the longer term.

Also, some offers will include a small percentage reduction in your balance. Basically, a balance reduction is worthless if it doesn’t come packaged with a very competitive interest rate because even a 0.5% higher interest rate will undo the benefit of a 3% balance reduction over the lifetime of the loan.

Note that consolidation will not remove a defaulted loan from your credit history. A defaulted loan is serious bad news for your credit report, and it’s even worse if you consolidate before dealing with that loan. Why? Even though it’s now marked “paid in full,” it’s also still marked as being in default and that mark will stay on your credit history for seven years. Rather than consolidating, do whatever you have to do to get that loan rehabilitated before you consolidate.

In other words, you should really only consider consolidation if you are current on all of your loans, you haven’t been paying on them for too long, and you can get a distinctly lower interest rate. If you answer “no” to any of these, a student loan consolidation is probably not for you.

This topic was requested by a reader who wanted to see reasons why a parent might choose not to pay for their child’s post-secondary education. This article intentionally provides only one side of a complex issue; please, do your own thinking and research before deciding whether to pay for your child’s education or not.

You’re being a good parent, right? You’ve started your child’s 529 savings plan already and you’re planning to invest in it continuously until your child heads off to school. You’re prepared for the inevitable cost of your child’s education, and you’re going to do what’s best for your child. Right?

Not necessarily. The fact of the matter is that paying for your child’s education carries with it some lessons that you might not want your child to learn, plus it may actually increase their financial burden over the long run. Let’s take a serious look at the flaws in this new cultural assumption.

College is not a requirement, no matter what university marketing departments want you to think. Many people simply assume that a college degree is the only way to succeed in American life, and thus you must go to college if you wish to get ahead. That statement simply isn’t true. Many entrepreneurs never attend or never finish college, and there is always a high demand for tradespeople such as plumbers and electricians (who can both earn a lot of money - especially considering they can get started very young and are never saddled with financial burdens). If you have a child that has never shown him or herself to be a strong student, instructing that person to go to college immediately after high school may in fact be a severe detriment to their future.

Paying for your own education teaches responsibility. Handling the process of finding your own financial aid resources is an experience that will bring out responsibility and maturity in those who contain it. Individuals who can guide themselves through this process quite quickly learn how important it is to be responsible for your own actions and your own academics.

Paying for your own education gives it value that getting it for free won’t instill. If you pay for it yourself, you are confronted with real bills with real dollar amounts that affect your bottom line. Connecting a person’s education directly to that person’s bottom line makes it very clear very quickly how valuable education is - and how wasting time while at university is a major waste, indeed.

If parents pay for education, it increases their own financial hardships. Even if you plan carefully to pay for your child’s education, that’s still money you could invest in your 401(k) or in a better home instead. Instead, that cash is going out the door to fund an education that may not be as valuable as you’ve been led to believe - and may not even be worthwhile if your child isn’t a dedicated student.

Given these factors, it is quite clear that not automatically paying for your child’s education is a path with some clear merit. Is it the correct path for you? That’s up to you to decide.

College-age readers (and younger), this post is directly aimed at you. Paying for college isn’t easy, whether it’s you doing it or your parents covering it for you. Unless you were very lucky in the scholarship department, someone is facing a financial hardship from this: your parents, you, your future self, or maybe even someone else. No matter who is paying for your education, there are still some principles that you should follow in order to keep your financial life and your relationship with your parents in good shape.

First, drop any resentment you have. If your parents elected not to pay for your education, that’s their choice. Do you consider yourself to be an adult? Then act like one. If you don’t consider yourself to be an adult, drop out of college, move back into your parents’ basement, and play video games for a few more years. That’ll show ‘em how mature you are.

Now that I’ve got your attention (and if you’re still here, you’re more mature than most college students), a big part of being an adult is dealing with adversity, and resentment is one of the most sure-fire ways to fail when dealing with adversity. You made the choice to go to college and this degree will benefit you and only you, so it stands to reason that you are the person who should bear the brunt of the cost. If your parents are paying for a portion (or even all) of the expense of college, that is a gift. Consider yourself very lucky, not entitled.

Second, if you’re getting nothing out of college, get out of college. If you’re just barely passing your courses and spend all of your time, well, wasting time, college may not be the place for you. Take a one year hiatus and do something completely different, something that sounds authentically exciting to you. Live like a homeless person in Europe for a year. Wash dishes in the best restaurant in town and observe what’s going on in their kitchen. Play your guitar on the street corner for change. Sign up for a volunteer corps. Do that one thing that sounds exciting to you and do it now so you aren’t wasting money sitting in your dorm room wondering what the hell you’re going to do with your life.

Third, even if your parents are covering all of it, don’t turn down opportunities for aid and scholarships. Spend some time in the financial aid office and see if there are any additional packages that can benefit your situation. Even if the cost you’re reducing is not your own, your parents will have more money with which to both spend and save for their own retirement (think of it this way: if they have more in retirement, there’s less chance you’ll have to pay for their care when the time comes). No matter what, seeking out financial aid and scholarships helps your financial picture in the long run.

Last but perhaps most importantly, take advantage of the college experience and use it to reduce costs, whether you’re footing the bill or not. I wrote about this topic in detail in the past, so I’ll just summarize by saying that college affords you a lot of ways to live cheaply and have amazing experiences on the state’s dime. Don’t spend your time dropping $200 on a new pair of pants at the mall when your campus is loaded with tons of free opportunities - and some amazing ones that can even put cash in your pocket.

No matter what, though, never spend your time in college harboring a resentment against your parents for what they did and didn’t spend on you. You are taking the reins of your own life now, and by framing your life in the context of what your parents are doing just continues the cycle of childhood. If you do nothing else because of this article, grow up and realize that as an adult you are the one responsible for the decisions. Your parents are just there to offer a helping hand if they can, nothing more, nothing less.

As a parent of a young child, I’m already struggling with the question of whether or not I should pay for my child’s post-secondary education, and how much I should pay for if I do. To put it simply, there is no easy answer to the question; if you were hoping to be told what to do, look elsewhere. Instead, here are several important points to consider if you’re thinking about how to handle financial commitments for your child’s education.

There is a solid case for no support at all. My parents gave me almost no financial support after I left for college outside of housing and food during my first college summer (the only one where I returned to my hometown). Is this better or worse? I don’t know for sure, but I do know that as a mature adult, I have some powerful reflections on the college experience from a financial perspective that I would not have now if I had financial support. Don’t assume that you have to save for your child’s education; instead, ask yourself what is right.

Start saving now. Every day you delay is a day that it will be harder to pay for your child’s education. If you’re going to pay for it, start now, even with small amounts. Open up a 529 college savings account so the earnings are tax-free (if used for educational purposes) and set up an automatic deduction plan so that your money goes into there automatically each week or month. This way, it will just quietly build up over time until you’re ready to use it.

Save equally for all of your children. I started my son’s 529 just before he was born and I put the same amount in it each month, along with contributing any cash gifts he receives (at least as an infant and as a toddler). If I have any children, I will do exactly the same thing for them. Just to make sure it is truly equal, I adjust the amount I deposit on an annual basis for inflation, so although my son’s earliest payments are smaller than my future childrens’ earliest payments will be, his college costs won’t be quite as great because he will attend college earlier. As far as I am concerned, the money in this account is his; it will be used first for college expenses - and if he doesn’t need it then, it will be given to him for post-graduation things like a home down payment. The same will be true of any other children I might have.

Don’t punish a child for success. If one child works hard and earns a scholarship, that child may be resentful if you then decide that you don’t have to pay for any of their education, but then spend tens of thousands of dollars educating that child’s sibling. What do they learn? That hard work doesn’t really matter because someone else will just step in and level the playing field anyway. Being unequal to your children can build resentment and misunderstanding. Keep what you’ve saved for that child for graduate school or, in the event that they do other things, transfer that money to them in another fashion. If you simply must do this, have an open family meeting about it with everyone involved; if you’re unwilling to do that, then you need to do some serious soul-searching about larger family issues.

Similarly, don’t reward a child for failure. If one child works like crazy to earn a lot of financial aid, while another child laughs it off, don’t reward the second child with the lion’s share of your educational savings. Just because one child is resourceful and a hard worker and another child is not does not mean one child should be given more than the other.

Be open about what you can give. Never, ever dangle a carrot in front of your child that isn’t really there. For example, while I was in grade school and junior high, my parents said that if I got into a college, they would “help me out a lot.” Well, when I finished my sophomore year in high school and got some very strong scores on my college exams and it became clear that college was in my future, they suddenly admitted to me that they had nothing at all for me and that their promises were merely a carrot to try to convince me to work harder at school. This was one of the largest disappointments of my life and it led to a short period where I basically didn’t care about getting into college at all. Never put your child into that situation.

In summary, decide early what you’re going to do, be equal and fair about it, and be clear to your child exactly what they can expect for aid.

A well-known writeup on software development stated the following:

Your “use case” should be, there’s a 22 year old college student living in the dorms. How will this software get him laid?

This frank statement hides some amazing truths inside of it, many of which relate to things far beyond software. The key principle, though, is that things that are successful are things that make it easy for people to do other things that make them happy. That’s why college students are notoriously bad at personal finance: it’s not easy and it doesn’t make them happy. Personal finance is often about the long term, and in the sheltered environment of college, the farthest goal in the future is getting a job in a few years - anything beyond that is pretty hazy for almost everyone.

So how can personal finance ever reach out to college students? The only way that personal finance management works in the life of an average college student is if it’s easy and if it brings either some happiness right now or a lot of happiness in the future.

Most lists for saving money in college that cover things like getting only the best loans and how to “optimize” your FAFSA fly right over the heads of most college students - I’m not ashamed to admit that I ignored them completely. These lists must have been written by people who have forgotten what college was actually like.

Given that, here are ten positive personal finance steps that any college student can take that meet all of these criteria: they’re realistic, easy, and they bring happiness both now and later.

Get some free money. Take your semester stipend and put it in an ING savings account. It will take about ten minutes, and if you ask me for a referral code, ING will give you $25. It will earn 4.5% APY interest, which means if you put $2,000 in there now and withdraw it in two months, you’ll get $14.71. The longer you put your stipend in there and the more you have, the more cash you get for nothing. Whenever you need cash to pay the university, you can just click your mouse a few times and get the cash out.

Make it automatic. When you’ve got that ING account, set it up so that it withdraws a few bucks every week from your checking account. The money will be automatically saved for you, a little bit at a time; you don’t have to worry about it or even think about it. Even if you can just swing a buck a day, you’ll wind up with about $400 at year’s end; check out the George Washington plan for more details.

Look for cheaper entertainment. I used to sit in the dorm and play video games all the time and I’d buy a new one about every two weeks. Why spend so much cash when I could have just found a video gaming club on my college campus? It turns out that there was one, with lots of meetups, rooms full of consoles on weekends, and lots of game swapping going on. Look at the list of all of the student organizations on your campus. At most large colleges, there’s one to meet almost every interest; if you’re at a smaller school, get one started: just print up a flyer, hang it up in a few places, and get the ball rolling. You can keep doing whatever you enjoy doing, except you’ll meet new people who like the same stuff and it’s cheaper because you might not have to invest nearly as much in it. Even better: look for interesting free stuff you might not have done otherwise.

Don’t get any credit cards. There’s no good reason to have a credit card in college; just be lazy and don’t fill out the application. If you don’t have the cash, wait a few weeks. I spent five years after graduation dealing with the credit card debt I racked up in college buying stupid stuff; don’t let the same thing happen to you.

Eat in the cafeteria. Eat as many meals as possible in the cafeteria; unless something very weird is going on at your school, it’s much cheaper in the long run than even making your own food, let alone eating out. It might not be gourmet, but it’s incredibly cheap and (reasonably) nutritious, so don’t pass it up.

Look for free stuff. When I was in college, especially in the dorms, I used to get tons of freebies from people looking for my business. If you hear about giveaways on campus, go get some. The same thing goes for on-campus clubs; the biggest thing I regret now is not going to club meetings when they had free food; not only would it have saved on the chow, but I could have met some new people, too.

Empty out your pockets at the end of each day. At the end of the day, dump out the change in your pockets and put it in a jar. Keep building that jar up, then go deposit it in a bank at the end of the semester. I used to keep change on hand for pop - in other words, I’d just waste it. I wish now I had put it in a change jar and cashed it in once in a while.

When you go buy something, ask around and see where it’s cheapest. I used to be a music addict, and for the first year I was in college, I just shopped at the local Sam Goody’s. When a friend finally informed me about a local music shop, we went there and it was about $7 cheaper per CD. I never browsed at Sam Goody’s again, and actually wound up hanging out a fair amount at the local music shop. I also eventually started buying some clothes at Goodwill, once I got over a mental block about how it was for poor people. I was in college; I was poor. This general concept is usually true for about anything; just ask people who have been around for a while where the cheapest places are to buy stuff.

Get an interesting job. Go to the general office for your major and ask if there are any jobs available for undergraduates. If you’re in the sciences, there’s almost always something available; in most other majors, there’s at least a chance of it. Get that job and find out if the things happening there excite you and also earn a little cash. You’ll probably quickly figure out if you’re in the right area with your studies, plus you’ll have some more money on the side and a job that doesn’t sound like you’re a loser when you’re talking to the opposite sex.

Keep yourself up. Take a shower every day. Wear some deodorant. Shave. The cleaner you are, the better you’ll feel about yourself, and the less likely you’ll be to spend money on stuff that you don’t need.

One last thing: if it makes you feel good, do it. This might be a shocking finisher to a list of personal finance tips, but you’re in college, and now is the time to experiment. You’re going to do stupid things you’ll regret later and you’re going to do some great things you’ll never forget. Just keep an eye on the debt you’re going to have to deal with after college; your future self will thank you even more than you can imagine for keeping that debt low.