HOW TO: Manage your money

"I have, like, no money." There's truly nothing I love to hear more than a friend begging me to spot her cab fare or pay for his pizza delivery, especially when I know the likelihood of seeing payback is slim to none. Money burns a hole in the pockets of college students, and it is a reputation that credit card peddlers, bartenders, and restaurants with free delivery are more than happy to take advantage of.

While Mom and Dad are around to refill our checking accounts and spot the credit card bill now, soon we'll be cut off and left to determine our own financial stability. The earlier we take charge of our personal finances and practice money management skills, the less likely we are to fall into debt and lose sight of our goals.

Create a spending plan

Be forward thinking and identify the significant expenses you see in the coming months and years. Everything from buying a new swimsuit for spring break to saving for your first car needs to be prioritized and considered alongside your predictable, necessary payments. Write everything down and stick to a best-guess spending plan. The InCharge Institute of America suggests you take your annual income (which for now is likely a student loan and/or allowance) and divide it by 12 to determine your monthly amounts. Consider the following allocations, substituting in your own categories where needed:

Housing: 23-33 percent

Life/car insurance: 4-6 percent

Food: 12-20 percent

Charities: 5-10 percent

Transportation: 7-10 percent

Personal debt repayment: 8-18 percent

Entertainment/recreation: 4-6 percent

Clothing: 4-7 percent

Savings: 5-10 percent

Medical: 3-5 percent

Make a spending plan for each month (I made one in Excel so it's easy to change and compare the values over time) and track how actual spending compares with your predictions. Emergencies arise and things change, so your budget should too. Make sure to record everything, including ATM withdrawals, otherwise your plan will be useless.

Provide yourself with limits

Having a spending plan doesn't guarantee that you will follow it. Sometimes, practical limits placed on yourself are the best reminder of your dollar's value and the importance of your budget. For example, when you plan your social expenses, make it a rule only to take a certain amount of money out at night and when it's finished, so are you; not only will it keep you from overspending, but it may even improve your time management by forcing you to pick and choose your social engagements.

Check your accounts

A bank account is the simplest, safest way to manage your money, not to mention an opportunity to establish a credit history (which, by the way, is necessary to do pretty much anything in the real world).

Use the Internet to shop for bank options, comparing fees and services and keeping in mind that accounts vary drastically, especially when it comes to minimum balance requirements. Also, most banks now offer free online banking that makes bill paying and record keeping much easier. Consider keeping a savings account; you will never understand the power of money until you've seen compound interest at work. If you live outside of New England, consider opening a student account with a regional bank here; you'll save tremendously on ATM fees, around $3.50 per transaction.

Avoid the plastic and pay up

Did you know it can take almost 30 years to pay off your credit card balance? You may notice on your credit card statements that your payment stub kindly lists the minimum payment due, about 2 percent, right next to the box you write in your actual payment. Credit card companies make their money off of people who pay only their minimums, which guarantee them a portion of your income for a very long time. Thus if there is one unbendable rule of personal finance that you must follow, it would be this: only charge what you are positive you can pay in full. Even better, only use your credit card in emergencies; paying in cash will always make you think twice before spending.

Keep everything

Every bill, every receipt, every little piece of paper should be filed away, just in case. Not only will you keep better track of your spending, but if you find a discrepancy at the end of the month when reviewing your bills, you have proof to back up your claim.

Start Saving NOW

You may have heard a little something in the news about President Bush's proposed Social Security reform. Essentially, you and I may not have Social Security if we retire under the current system, one of many reasons why starting to save now is important. Though thinking about retirement may sound insane to someone who hasn't even entered the workforce yet, it's a reality that cannot be put off. Don't squander your money and you really can be set for life.

"Save for Your Future" is a partnership between the Social Security Administration (SSA) and the American Savings Education Council (ASEC) committed to informing Americans about the need to save and plan for retirement. Its Web site, saveforyourfuture.org, has resources devoted to helping you plan and budget wisely. With over a hundred different calculators, you can figure out how long it will take you to save for a car, pay off a credit balance, or even become a millionaire.