A Letter to My College-Bound Daughter

You are fortunate to have parents that can take care of your biggest bills—tuition, room and board, transportation home. But the rest, dear child, is up to you. It would be a shame for you to end up in debt with your modest earning ability right now (the average credit card balance for college seniors: nearly $3,000). So estimate all of your expenses over the next 17 weeks and compare that with your available resources. Looking at the whole semester, not just a sample week, makes plain how recurring expenses add up—like, say, $4 a day at Starbucks setting you back nearly $500.

Separate your spending into categories, such as books, laundry, entertainment, food and beverages (spare me the details about what kind of beverages). "Keep an envelope for each, and place all of your receipts in those envelopes so you can go back and count what you spent where," says Douglas Andrew, author of Millionaire by Thirty. "That way you'll quickly recognize where you may be going overboard." Make adjustments as needed. But when you add to one category, be sure you subtract from another. If money runs tight, don't default to a part-time job unless you'd really enjoy it or it's truly a last option. You worked hard all summer and saved enough to get by. Cut your expenses instead. That's a lifetime skill worth developing now.