Many college kids not making the grade in money management

When this year's freshmen class arrives on campus, the last thing they're going to worry about is money management.

As for a budget -- who needs it?

The checking account is brimming with cash from summer jobs and a hefty contribution from Mom and Dad. A student loan check is on the way. The credit cards are shiny and new. Let the college adventure begin.

Fast-forward three months. The student loan money is gone and you're not sure where. The credit card bills are hard to look at and even harder to pay. You're trying to figure out how to stretch what's left in your checking account for the next six weeks. What happened?

"A lot of it's entertainment and clothing; eating out, beer -- you know," says Vickie Hampton, a financial planner and an associate professor at Texas Tech University in Lubbock, Texas.

A new place to spend
It's easy to see how it happens. Think of what would happen if you gave any 18-year-old the credit equivalent of a big wad of cash without first discussing how they would spend the money or even if they should spend any or what the repayment terms will be. Then send them away from home for the first time in their lives to a place where the social scene never stops. And just when they're starting to enjoy themselves, bury them with bills.

"They're not used to having to pay for so many things. They're not used to the freedom they have," says Steve Bucci, president of Consumer Credit Counseling Service of Southern New England.

"While at the same time they have unlimited wants, they have just been handed seemingly unlimited resources." This can be a recipe for disaster.

They also have a feeling of invincibility.

"Your freshman population is probably your most vulnerable. They think they've got it together and nothing negative is going to happen to them," says Mallary Tytel, president of Healthy Workplaces, a human resources consulting firm based in Bolton, Conn.

"You're dealing with a population that doesn't see the hazards that might await them."

Shuffling the debts
They also don't like to admit when they're in trouble. Some will ignore the bills and the warnings only to end up entering the job market and adult world with damaged credit, while others will try to buy some time with the student shuffle. They use student loan money to pay off credit bills. They use one credit card to pay off another. They start working all kinds of hours -- anything to avoid that phone call home to talk to their parents about it.

"They'll start to work more hours and their school work can suffer as a result," says Bucci.

All of the sudden college isn't much fun anymore. It's hard to relax when you're working yourself ragged trying to make ends meet.

The best way to avoid such a fate is to map out a spending plan early in the semester and stick to it. A good plan will help you keep track of bills and get a handle on spending.

"Even short discussions or simple guidelines can make a huge difference to kids," encourages Bucci. "I suggest that parents keep advice to a few well-chosen words and then rely on the 18 years of upbringing they have already provided. One of my personal favorites is defining what using a credit card for emergencies means. The advice is, 'If you can wear it, eat it or drink it, it's not an emergency!'"

Check out Bankrate.com's articles on college budgeting tips and a college budget worksheet to help get you started in planning your college finances.

Many graduates enter the real world weighed down by credit card bills. The debt can linger for years and years. Don't let this be you.

"You can live like a professional as a student but if you do you'll have to live as a student when you're a professional," says Mark Oleson, director of a financial counseling clinic at Iowa State University.

"It will catch up with you at some point. You can deal with it now or it will deal with you later."