(MONEY Magazine) – Congratulations. You've done it. You've endured your high school classes, studied hard--well, at least hard enough--and you've not only graduated but also are heading to a college of your choice. As we know from having been in college just a few years ago, there's so much to look forward to: Parties. Sports. Stimulating classes. New friends. Bills.

Bills? Sorry, but yes. Like it or not, it's time to take responsibility for handling your own finances. Doing so correctly will help you move through college without the distraction of money worries that you can easily avoid. At the same time, you'll be laying a foundation for sound financial management for the rest of your life.

How do you get started? Based on our own experience and extensive interviews with college students, we've anticipated your questions. The detailed answers that follow set out a strategy for making smart money moves throughout your college years.

It's time to open a BANK ACCOUNT. Are all banks the same? If not, how do I choose one?

Just as fast-food joints pop up within hollering distance of one another, banks tend to cluster on campuses. But don't just head for McBank. After all, says Kim Kellogg, a senior vice president at Wells Fargo in San Francisco, "The bank you choose as a freshman is typically the one you'll stick with for four years."

Walk around the campus and check out which bank is handiest. How close is it to your dorm? Does it have a cash machine in the student center so that you can withdraw money from your account with an ATM (automated teller machine) card? If you're at a large university, does the bank have branches scattered around town that you can conveniently use during your daily travels as a freshman and when you move to different living quarters later on?

Most important, are the fees reasonable? Banks charge for processing the checks you write and for other services, such as ATM withdrawals and overdraft charges (those rubber checks). But you can usually offset the fees with interest earned by keeping most of your money in a savings or money-market deposit account. Banks offer a smorgasbord of different accounts, so shop around for the best options. For starters, ask a few upperclassmen where they bank and why.

At Stillwater National Bank on Oklahoma State University's campus, for example, executive vice president Kerby Crowell recommends putting the money you've accumulated for your yearly expenses into an insured money-market account that pays interest (most recent rate: 4.17%) and charges no fees. In addition, he says, you should open a checking account. Then each month transfer enough cash from your money-market account to your checking account to pay immediate bills. Your goal is to have the interest you earn in the money-market account offset your checking fees.

Special student checking accounts, available at most banks' campus branches, usually cost $5 a month. These accounts give you 10 checks a month and un-limited use of an ATM card at machines in the bank's ATM network. (Using your card to obtain cash through another network typically costs $1.25 per withdrawal; be sure to ask your bank how to tell the difference between machines.) Some banks will waive the $5 monthly fee if you maintain a plump minimum balance, typically ranging from $600 to $1,500.

This brings us to a small lecture you will probably hear repeatedly from your parents: Keep careful records of how much you withdraw from your account. Writing checks for more money than you have available is, um, not cool, even if it's merely sloppy bookkeeping on your part or an oversight. The bank won't pay those checks and will return them to the person or company to whom you wrote them. In other words, you will have bounced a check, which typically will cost you a $15 bank penalty, plus some embarrassment. If you have a pattern of bouncing checks, warns Fritz Elmendorf of the Consumer Banker's Association, your account will be closed, and you may have a hard time opening one at another bank. You may also have trouble later qualifying for credit, such as a car loan or a home mortgage. Be particularly careful of draining your balance with so-called campus cards--student IDs that can be used to tap bank accounts in payment of goods and services ranging from sneakers at the corner athletic store to washing clothes at the Laundromat. Wells Fargo studies show that students at schools that offer campus cards spend up to 40% more than those at other colleges because the card is so easy to use. In fact, says Peg Downey, a family financial planner at Money Plans in Silver Spring, Md., "Beware of charging too much of anything. It's the easiest way to lose track of your finances." And to blow your budget.

--Jillian Kasky

Okay, everyone tells me the importance of sticking to a BUDGET. How do I set one up? And if the federal government can't balance its budget, how can I expect to balance mine?

So your idea of a budget is to stash away money for incidentals like partying, and if there's not enough left for bills, to put the bite on Mom and Dad? Well, that may have worked in high school, but "now is the time to stop relying on your family," says Irene Leech, a professor of financial man age ment at Virginia Tech. Begin planning your own budget today, she advises. Even very rich and royal folk, like Princess Di, plan their spending to some degree. Tabloids report that Diana, for example, budgets a whopping $4,800 a week on personal grooming alone. If you follow her instincts for thinking ahead, but on a mere human scale, you ought to be able to get the most mileage out of your money.

Making a budget is pretty simple. First, grab a pencil and a notebook and write down all the money you'll have to spend for the school year, including your allowance from your parents, grants, loans, gifts, savings, interest on bank accounts, and earnings you expect from a part-time job. Next, tot up your expenses for the school year. (It's usually easiest to figure them for each semester and then multiply the total by the number of semesters you will spend at school each year.)

Think about every expense you expect to incur, right down to ones as small as a single dollar. The basics are easy: room and board, tuition, phone, books, supplies and laundry. It's the extras that will kill your budget if you don't plan for them--late-night pizzas, sodas between classes, clothing, even dry-cleaning bills for formal wear. Suddenly that income doesn't seem enough, does it? Keep a cool, level head and start setting priorities.

First, determine what you really need before allowing for what you want. Financial planner Downey stresses that nobody else can tell you what's most important. She advises students "not to think of budgeting as a straitjacket--allow for some incidentals, like a social life." But you have to make choices. Can you afford concert tickets, CDs, movies and sporting events, and still pay for photocopies and the phone bill?

In the end, while expenses must not exceed income, by careful planning you can usually find ways to stretch your money. Carson Carr, director of academic affairs at SUNY-Albany, advises you to consider investing $100 in a small refrigerator for your room. Since freshmen eat an average of five meals a week away from the dining hall, according to a 1994 Roper study, Carr recommends bringing leftovers back to your room for some of those meals. Also, he says, buy fruit and other snacks at a supermarket and keep them handy in the refrigerator rather than paying as much as 20% more for them at campus stands or food machines. And if you drink a lot of soda, Carr advises, buy two-liter containers at the supermarket (77 cents each near the SUNY--Albany campus) rather than consume the equivalent amount in 12-ounce cans (70 cents each in the supermarket; $1 in vending machines set up in the dormitories).

You'll notice how even the smallest savings add up when you start living with a budget. Downey tells clients it's best to keep track of what they spend as they spend it; carry around a small notebook and jot down every cent. "You may be surprised," she says. "Many students don't even notice the dollar that they spend on a Coke from the vending machine every day."

Downey suggests using a separate page of your notebook to keep track of spending in each budget category, such as entertainment or school supplies. If you find you're likely to go over the estimated expenditures in a category one month, compensate by cutting the amount you plan to spend in another category. It's okay to move money around as you need it--that's why you used a pencil. Just remember, you can spend only as much as you have.

--Jillian Kasky

I've heard that college is the time to start establishing a good CREDIT rating--and that the first step is to get and use a credit card. How do I do that? And what should I be wary of?

Your first month in school, countless companies will send you letters offering credit cards. Why do they want you, you may wonder, since you probably aren't exactly gainfully employed? "Because credit-card companies believe the first card a person has is the one he or she holds on to," says James Daly, editor of the twice-monthly newsletter Credit Card News ($45 a year; 800-535-8403). In fact, he says, a full 85% of students do keep the first card they are issued for 10 or more years. And as bizarre as it may seem, you'll have just as easy a time qualifying for a card as an unemployed student as you would as an employed recent graduate. That's largely because card companies know that if there is a problem, parents will generally foot the bills. "Credit-card companies really want to snap up students," says Daly.

They are succeeding. In 1994, according to the Roper College Track Financial Services study, 59% of all undergraduates had credit cards (not including store charge cards). But here's the hitch: Of those, 39% maintained an average monthly balance of $465. That means they were doing exactly what the credit-card companies want them to do--not paying off their bills each month. As a result, these students are paying enormously high interest rates on their balances--an average of 18% a year. And that means if the students pay only $500 of a $1,000 bill, they will end up owing $7.50 extra a month on that $500 balance. Each time the balance on your card gets bigger, so does the amount you pay in interest.

Not everyone needs a credit card, says Ruth Susswein, executive director of the Bankcard Holders of America, a consumer-education group in Herndon, Va. "But since it is far easier to qualify for a card while you are in school," she says, "why not?" After all, as long as you pay off all the money you owe each month, the card can be a first step toward establishing a good credit rating, which you will need to secure that home mortgage or car loan later on.

Before selecting a card, though, check out the choices. You want to learn which company or bank offers the lowest rates and yearly fees. Chemical Bank's classic Visa card, for example, costs $20 a year and charges 18% interest on unpaid balances, while Arkansas' Federal Savings Bank offers MasterCard and Visa for $33 annually but charges only 10.2% interest.

Limit the number of cards you sign up for. "In most cases, one is plenty," says Daly. The fewer cards you have, the less likely you are to spend, thereby increasing your chances of being able to pay your bills when due and establishing good credit. And we want to emphasize the importance of paying those bills on time. Although that advice sounds simple to follow, it is sometimes hard to remember when you've got a pile of papers on your desk, with the credit-card bill buried at the bottom. By paying promptly, you will avoid late fees, which average $14 a month for the typical cardholder; they are levied in addition to any interest fees you may owe. And do your best to pay off your balance in full each month. That is the most important move you can make, according to all of the experts and financial advisers we consulted. Your credit-card company will send you a bill that allows you to make a minimum payment--say, $15 on a $600 balance. "The real temptation is to just pay the minimum," says Daly. "But you'll start to rack up lots of interest if you do that." Says Susswein: "When you pay only the minimum, you are actually taking out a loan. Would you borrow money just to have dinner with friends?" Remember, maintaining an unpaid balance of $500 for a year at 18% interest will cost you $90 extra.

Finally, be careful of falling into the habit of charging everything just because it's so easy. "Remember, the bill will always show up in the mail," says Robert McKinley, president of RAM Research, a Baltimore company that tracks credit-card usage for consumers and banks. McKinley cites another reason for caution if you will have student loans to pay off after you graduate: "You wouldn't want to add credit-card debt to that already hefty heap."

--Elif Sinanoglu

I want to earn extra money, but I don't want work to interfere with my studies. What are guidelines for the BEST JOBS for college students?

Once again, you've come to the right place. To help you find the best jobs while in school, we consulted dozens of career counselors on campuses across the country. Here's what they say:

Before you look for a job, decide how many hours you must work (if the goal is to contribute toward your tuition) or how many hours you want to work without giving up too much study or socializing time. Most career counselors advise students to work no more than 10 to 15 hours a week. "Freshmen should work the minimum they can afford," says Tim Putzier of the Career Advising Services at the University of Wisconsin-Madison, "so they have time to adjust to college life. As they do, they can increase the workload." He adds, however, that all underclassmen should remember that they are students first and employees second.

Look for a job on campus before you try elsewhere. Why? For one thing, you'll save time by not having to commute to work. For another, on-campus employers offer more flexible hours around exam time or other demanding deadlines. Finally, you'll stay close to students, which can be critically important. Observes Robert Sanborn, associate dean for student affairs at Rice University: "The thing that keeps kids in college is involvement. Working on campus draws you into college life."

To find a campus job, start by seeking suggestions from other students. "Ask everyone on campus who has a job you want where and how he or she got it. Also ask your professors if they need research assistants," says Debbie Taylor, assistant director for multicultural services at the University of Michigan-Ann Arbor. If that doesn't work, try the student employment office or the career planning office. Both keep up-to-date lists of unfilled jobs.

Because competition for campus jobs is stiff, try to start your search the week before school starts. "Get there first," says Sanborn. "Hit the career office, the library--all the offices you wouldn't mind working in. Quiet on-campus jobs, like those in the library, are the most enviable ones." School dining halls also offer attractive opportunities. "Food-service jobs usually mean free meals," says Elan DalPonte, an employer outreach coordinator at the University of California at Los Angeles' career planning center. Also, the money isn't bad. At UCLA, most positions-whether cooking, washing dishes or serving food--start out paying around $5 an hour and can eventually go up to $8 or $9 an hour depending on your performance and seniority. "All in all, these are terrific jobs for younger students who don't have to worry so much about career experience," DalPonte says.

If you must work off campus, avoid jobs that require long commutes or so much time that you will be drained of the energy you need for studies or socializing. A paid internship in a field you are considering as a career would be ideal, of course. As you might expect, internships are therefore the hardest jobs to come by. To apply for one, visit your school's career planning office early in the year to find out what internships are available and how to qualify for one.

Career counselors also recommend the following off-campus jobs, all of which provide decent pay and flexible schedules:

Waiting tables. Believe it or not, this good ole favorite repeatedly was the experts' first choice, because of the opportunities for flexible hours and excellent tips.

Translating. If you are bilingual, especially if you are fluent in an Asian language, you can find lots of work as a freelance translator. People who can translate Chinese or Japanese legal or financial documents into English are especially in demand, says Peggy Curchack, assistant director of career planning at the University of Pennsylvania. The pay ranges between $10 and $15 an hour. In addition, international law firms in big cities such as New York or Philadelphia often hire people fluent in German or French to help translate legal documents for around $15 an hour--closer to $20 if you can work in the evening.

Data processing. Law firms and local businesses pay $8.50 an hour to start to students who are quick on the computer keyboard. Again, if you can work at night full time, the pay is usually around $20 an hour.

Work offers students more than pay, of course. "Holding a job while in school-any kind of job-shows that you know how to manage your time," says Curchack. "And that looks good to future employers."

--Elif Sinanoglu

I've heard some nightmare stories about LENDING MONEY to friends. How do I handle it when someone puts pressure on me?

There's no simple way to refuse to help a friend in need. Nonetheless, that's what you might have to do to avoid jeopardizing the friendship. Reason: If you're like most students, you simply can't afford to lend money for long. By giving a loan to a friend, you risk being short of cash--and understandably upset--if your friend doesn't pay you back promptly or at all.

When asked for money, have an excuse at hand. For example, "I'm having a tough time getting by myself." Or "Let me figure out my upcoming expenses and let you know." That way, says financial planner Peg Downey, "you'll seem gracious but simply unable to part with the dough."

Understandably, there will be situations when you decide you would be wrong to say no. In these cases, says Downey, first consider the risk. If you lend money to a jobless friend, will you see it again? Would a bank lend your friend money, or would he be considered a credit risk, someone who does not appear to have the means to pay back the loan? Next, know in advance how much you're willing to lend. "Don't be caught off guard," warns Elsa Schafer of Wells Fargo Bank. If it's only $25, stick to that figure, regardless of what your friend requests. And before you dish out your dollars, ask yourself this tough question: Can you separate your loan arrangement from your friendship so you won't get angry with your friend for getting a $10 manicure when she owes you $20? Generally, there are three types of friendly loans. What we might call a loan as a loan is when you give your friend $20 to tide her over until she gets paid again. On payday she comes to your room with the cash, a thank-you and a gracious smile. All went well--you got your money back and helped a pal. Beware: All loans won't go this smoothly.

The loan as a gift is when your friend offers to return the money and you say something like, "Oh, you can wait until I need it." Don't expect to see this money again, because you've essentially converted the loan into a gift.

Finally, there's the loan as a loss, or the ultimate opportunity for your parents to say, "I told you so." That happens when the two of you are best buddies before the loan, but afterward your friend doesn't wait for you after class, and never has her wallet when you do catch up with her.

To avoid that, keep in mind this short version of the best rule on loans to friends: Just say no.

--Jillian Kasky

My family has had some major money problems. Is it too late to check out FINANCIAL AID?

It's never too late," says Chris Walsh, the director of financial aid at Syracuse University. Most financial aid money is doled out at the beginning of the school year, he says, but students can apply for aid anytime. Loans are the easiest source of new funds; the financial aid office at your college can supply the details.

To get midyear gift aid (money that you won't have to pay back), your situation must be serious--"like your parent losing a job," says Walsh. If you're just jonesing for another cheeseburger, don't waste your financial aid office's time; Walsh suggests that you check between the couch cushions for loose change--or go out and get a part-time job.

--Jillian Kasky

Are we finished with the serious stuff yet? Come on, give me some tips for getting the most RECREATION for my money.

Discounts. Discounts. Discounts. That's the name of the game. Cheap is chic for college students--and the great deals start right on campus. For the small price of your mandatory student activity fee, usually less than $10 a semester, you can begin building a rounded recreational life. You can buy sports tickets at special student prices (only $5 a game, for example, for a season seat to see Ohio State play football or basketball) and concert tickets too ($15 to hear Better Than Ezra at the University of Michigan-Ann Arbor in May 1995). You can see movies on the cheap, such as the 40 or so offered annually at the University of North Carolina-Chapel Hill ($2 for a seat at first-run hits, which last year included Hoop Dreams and Pulp Fiction). And there are lively lectures, sometimes free. A few examples from the last academic year: the Dalai Lama at Rice University, sex guru Dr. Ruth Westheimer at the University of Miami and former Mideast hostage Terry Anderson at Northeast Missouri State--all without charge for students.

There's lots of recreation at your student union too, from Ping-Pong to pool, and much of it is free. You don't have to look hard for bargains off campus either. If you don't have wheels, check out cheap public transportation and, even better, special campus services. Many schools, like Nicholls State, near New Orleans, will shuttle you downtown or to a local mall for the low, low cost of...zilch.

Students attract "every kind of deal around," reports SUNY--Albany director of academic affairs Carson Carr. For instance, you can get 5% to 50% discounts at museums, restaurants, movie theaters and music stores. Discount packages are also available from airlines for vacation splurges at spring break and from an array of other businesses, including clothing stores and art galleries. Reason: You have strong potential for high earnings and large discretionary income after graduation, and "need ideas on where to spend it," says Kathy Cummings of American Express' Student Privileges program. You are, Cummings says, "a marketer's dream."

So don't ever buy tickets at full box-office rates or pay sticker prices for travel. Always search out and take advantage of student dis counts. Not only will you get more fun for less money but today's discounts will help even out the amounts you pay in four years when, as an esteemed graduate, you must pay full price.

--Jillian Kasky