When Gerry Stebbins sits down to talk to students about money management, he uses a financial version of Scared Straight to get the message across.

The assistant dean of student affairs at Washington & Jefferson College, a small, historic, liberal arts college near Pittsburgh, he tells them what happened to him and how he's still paying the price of wretched excess.

Stebbins became the victim of an undisciplined credit card binge.

"I wanted all the things my parents had, but I didn't want to wait 10 years to get them," he said. "I wanted a VCR, a new television, all the newest clothes, the microwave, all the things that make life easier."

At least with those, he had something to show for it. But like many college students today, he also used credit cards to finance his good times.

"I recall one homecoming. I went out with all my buddies and we were having a great time at a bar," he said. "I put a $75 bar tab on the credit card. I had nothing to show for it. If you're lucky, maybe you have the memories."

Before he knew it, he had about $13,000 in debt on more than a dozen cards and was hiding from collection agencies. When he'd finally had enough, he went to a bank for a consolidation loan. Much to his embarrassment, they made his parents co-sign. It cost him $787 a month -- as much as many people spend monthly for their housing.

The most serious problem
The most serious problem college students seem to have, Stebbins said, is a failure to understand that credit cards aren't free money -- and that their poor spending habits in college can haunt them for years to come.

"If you've seen the commercial where the parent says, 'This is for an emergency,' and he's buying pizza and scuba gear, that could not be more real. They think it's free money ... They look at their credit history as something down the road, that they don't have to worry about. It's years and years away and what does it matter?"

It's not uncommon, said Stebbins, for students to have several credit cards in their own names, with significant balances on each. One sophomore he counseled had 15 cards. They also think that hiding from bill collectors is an elaborate game, not realizing that just the fact that a creditor is calling means their credit reports are already damaged.

His advice to parents is to begin with a debit card. That gives students a limited amount of money and a tool to begin to manage money.

Twentysomethings in a $20,000 hole
Helen Kaiser, an accredited debt counselor with Consumer Credit Counseling Service of Western Pennsylvania, said she sees it all the time -- twentysomethings who are $20,000 in the hole on credit cards and student loans who didn't get their dream jobs, had to pay a big security deposit on an apartment and are totally overwhelmed.

The most common problem, she said, is that students are not aware of the true cost of credit.

"They're used to looking at the minimum payment that's due every month," she said. "If they sat down and tallied the total cost, they might think twice. But there's that sense of immediacy. You have to keep up with your friends. Why wait? Life is for living. They're not used to saving and budgeting."

Then there is the stress related to college life, which many students relieve by shopping.

"You have to study, it's a hectic schedule and a lot of times, you're far from home," she said. "If you're emotionally stressed, there's a tendency to go to the mall."

For many students, going to college is the first time they're handling a checking account, a credit card, paying bills and shopping for groceries. Ellen Braitman, author of Dollars and Sense for College Students (The Princeton Review, $10.95), stresses the need to establish a budget to give students a reality check on their financial situation.

The biggest problem areas for students, money-wise, seem to be entertainment and food.

"The incidentals also really add up," Braitman said. "Get a cup of coffee, a newspaper and a bagel on the way to class everyday and you could be spending $50 to $100 more a month than you thought. Setting a budget is about making sure you have enough money to cover the needs, including having fun. It really reduces stress."

Help is out there
Technology is offering some innovative ways to help parents help their students make the jump to financial independence.

John Taylor, an attorney in Indianapolis, decided he wasn't quite ready to cut the cord when his daughter, Abigail, left home for Ball State University last fall. He talked to his banker at the First Internet Bank about a linked account. Through the 'Net, he can make deposits into her account and "she can write checks or go to an ATM and get cash.

"I did it this morning," he said. "I got an e-mail from my daughter. She needed a book for French class, she'd gotten a parking ticket from the university and she's going to Europe at the end of the term for a class and needed to make another payment."

Without the linked account, he said, he'd be mailing checks to her and worrying about them getting lost in the mail. Having her own checking account and credit card gives her some independence, but dad can access her account to keep tabs on her spending habits.

"I want Abigail to start learning how to write checks, and it's helping her to build up a little bit of credit history with use of the Visa," he said. "I can see the amounts she's spending. I don't say that because I mistrust her, but she's new to handling money. I can keep a closer eye on it."

A card with parent strings
For students who need a higher amount of supervision, a new option on the market is the PocketCard, a Visa debit card that allow parents to closely monitor via the Web or by phone.

PocketCard works somewhat like a prepaid phone card that can be reloaded with more time. Parents load money onto the card from their own checking account. The transfer, either on the Web site or by phone, is immediate, and parents can turn the card on or off, controlling when it's used. Accepted anywhere Visa is taken, the card also can be used for cash at an ATM. Every time it's used, the parent is sent an e-mail instantly.

Whether you use the 'Net or an old-fashioned ledger, your college-bound student needs to know how to manage a bank account, enough budgeting skills to ensure that expenses don't exceed income, the proper use of credit cards, and where to turn for help if problems come up, Braitman said.

"If, when you're 18, you make smart decisions," Braitman said, "you're armed for the future."

Pat Curry is a freelance writer based in Georgia
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-- Posted: Aug. 9, 2000