Money Moves Every College Freshman Should Make

Steve Merrell, co-founder and financial advisor at Monterey Privatewealth, was asked to comment on the Wall Street Journal's article, "Money Moves Every College Freshman Should Make," by Veronica Dagher, published on August 24, 2013.

The article

Freshman year may be your first taste of financial freedom. 

What you do with the freedom, and the financial habits you develop now, will set the tone for how you'll manage your money long after you have your diploma in hand.

Here, then, are 12 things every freshman should consider.

1 Set a budget            

Figure out how much money you have (including those graduation checks) and any money you may have coming in (say, from a part-time job). Then, estimate your expenses. Don't forget to factor in even little expenses, such as beer. Have a heart-to-heart with Mom and Dad about what expenses they can (or want) to pick up and which ones you're expected to cover, says Judith McNary, a Broomfield, Colo., financial planner.

Once you set a budget, use apps such as Mint or Expenditure to help make sure you don't run out of money by October.

2 Get educated            

If your school offers a personal-finance class, take it—it may end up being one of the few classes that is actually useful in the real world. You can also learn more about money and investing by following personal-finance blogs or Twitter accounts such as LearnVest and, of course, The Wall Street Journal.

3 Beware of free hats            

Lurking outside freshman haunts are likely to be plenty of very friendly people offering free hats and Frisbees. They are hoping you will sign up for the credit card they're offering. You don't need to sign up.

But if you do pick a credit card, understand its terms, which may include a high interest rate. Think twice before you use the card and pay off your bill in full each month. Doing so can help you build your credit score, which could matter when you apply for your first job, first apartment or first new car, says Peter Katenkamp, a financial adviser in Albany, N.Y.

4 Understand debt            

Some debt may be unavoidable but don't underestimate the burden of a hefty debt load later on. While, say, another $10,000 in loans may seem like just a number today, down the road, it's real money (plus interest) that you'll have to pay back.

That debt may also make it difficult for you to seize opportunities such as a foreign work experience or a low-paid entry-level job in a field you're passionate about, says Steven Merrell, a financial planner in Monterey, Calif.

5 Take advantage of student discounts            

Most schools offer discounted tickets to games, shows and other cultural events. You might also get a cheaper rate on public transportation thanks to your student status. You can save with the $20 Student Advantage card, which offers discounts at retailers such as and Foot Locker.

6 Think twice about buying new books            

You don't need to buy every textbook new. It may take a little more work and some luck, but buying used copies in the bookstore, online or from an upperclassman can save you hundreds of dollars. And if you won't need them as reference books later on, sell them back at the end of the semester.

7 Do your research            

Freshman year isn't too soon to start researching the realistic salary range for your course of study.

"Don't take out more in student loans than you can realistically expect to make in annual salary within your first three years of being out of school," says Brian Frederick, a Scottsdale, Ariz., financial planner. Researching the jobs outlook for a career in your field and picking a career in high demand can make your life easier financially later on too, he says.

Still, don't study something you despise just because you want to get rich. "Figure out your passion, then figure out the best way to make a living doing it," says Jack White, a St. Charles, Mo., financial planner.

If possible, spend a few hours on the job with family, friends or alumni in fields that interest you. Also try to find intern, volunteer or related work-study opportunities.

8 Start saving            

Saving may seem impossible, and even unimportant, right now, but if you learn to do it now, you'll form good habits by the time you graduate.

You could set up an emergency fund at a free online bank such as Capital One 360 and link it to your checking account, says Paul Dolce, a Dublin, Ohio, financial planner. Have a fixed amount automatically transferred from your checking account to your savings account every month. Just $5 or $10 a month can add up, he says.

9 Use student loans wisely

At the end of the semester, you may receive a refund check if you borrowed more than you needed for that semester. Don't blow that money on spring break! Ask yourself, "Will paying for spring break with the refund leave me vulnerable in other areas of my financial life?" says Mr. Katenkamp.

Put aside the money and use it to lower the amount in student loans you may need to take out later on.

10 Don't forget scholarships            

Scholarships aren't set in stone. So take school seriously enough to maintain the GPA you need for your scholarships, says Clarissa Hobson, a financial planner in Colorado Springs, Colo. Also keep track of key dates to reapply for those scholarships that require it. And schedule time with your college adviser every few months to check for other scholarship opportunities that may surface, says Caren Levine, a Philadelphia financial adviser.

11 Buy a shredder            

Keep it in your dorm room. Shred any credit-card and bank-account statements that you don't need, as well as any other paperwork containing personal information.

"You don't want your financial information to be thrown in the dorm trash where anyone could grab it," says Michele Clark, a financial planner in Chesterfield, Mo.

Guard your Social Security number with your life. And avoid using shared campus computers to conduct online banking.

12 Have fun            

That's up to you. But know that after you graduate some of your best memories may be from watching an old movie in the dorm, playing a game of pickup basketball or having a good conversation. And those are all free.

Dagher, Veronica. "Money Moves Every College Freshman Should Make." The Wall Street Journal 24 Aug. 2013.