You’ve graduated college and are moving on to the world of the financially responsible adult. Yeah, right. The number of bankruptcy filings by the college educated has continued to climb (although bombing your student loans with bankruptcy is pretty difficult), and the cost of a college education continues to rise.
Instead of falling into this category of the financially confused, adopt some habits that will start putting you on the right track now – while you’re in college. Not only will you keep yourself out of money trouble, but you’ll also find yourself with a serious competitive advantage.

Before You Get into the Tips

I didn’t want to write the same old “money saving tips for college students” article that we’ve all read before. These articles always include tips like:

1. Learn how to budget
2. Spend less than you earn
3. Buy used text books
4. Don’t take out bigger student loans than what you really need

Duh.

Instead of regurgitating the same old common sense crap, I wanted to share some things that I wish I had known when I was going through college. I ran each of these ideas by a number of my closest, college educated friends, too, to make sure there was some sort of consensus before I published it.

Not all of these tips will apply to every college student (for instance, letting your mom use your credit card could turn out to actually be a nightmare), but you’ll find them to be completely original.

Avoid Credit Cards at All Costs

Credit cards are the bane of many college students. Sure, you might think that you’ll accept an offer and pay it off every month before the interest hits – and you might even stick with that plan for quite some time. But an inevitable day will come where you experience an emergency (or some other absolutely “acceptable” excuse) that requires you to bite off way more than you can chew.

You’ll start accruing interest and you’ll have a hard time catching up. You’ll be throwing money away, and if there’s any money tip that’s worth reading, it’s that you shouldn’t throw money away.

If you want to have a credit card to start establishing your credit worthiness now, check out the next tip.

Get a Credit Card in Your Name, and Let Mom Use It

No, not to buy her romance novels, crocheting supplies, or anything else that moms are interested in. Instead, have her use the card every time she plans on sending you a care package, or buying you a gift. She can use the card and then pay off the balance on your behalf each month.

This won’t help you develop good money management habits, but it will certainly take all of the risk away from using a credit card to establish a solid credit score. You do, however, have to be absolutely certain that your mom won’t use your card for a shopping spree (and there are plenty of you who know your mom would do such a thing).

Don’t Ever Try Keeping Up with the Joneses

While you’re a college student you have a lot of leeway that the rest of us adults dream of. You can dress like a slob without being given as much as a second glance. You can feast on ramen noodles and no one will question your sanity. In most college towns, you can even get by without a car (if for no other reason than the fact that some of your friends have cars).

Use this to your advantage. Instead of trying to buy the nicest clothes, shop at the local thrift store (I understand that’s rather trendy these days). Instead of buying a new MacBook with credit, pick up a refurbished dell for a quarter of the cost. No one is going to judge you, and all of the money you save can help fuel your financial goals.

Get a Job

I didn’t even think of mentioning this until I’ve written and reviewed the first draft. I assumed it went without saying. But then it dawned on me – plenty of you are going to question how viable any of this is since it requires a source of income.

Life is going to be full of choices that require some form of sacrifice. They’re going to get more difficult as you get older, too. The biggest challenge right now is choosing between unfettered time for socialization and getting a job.

Just remember – you’re young and full of energy. You’ll have plenty of time to put in the hours studying, working, and making those ever-important social connections that will help you further your career. But, who am I trying to kid? Most of you won’t even use your time socializing to build these types of relationships. You’ll just go out and get wasted.

Throw all of that away in favor of getting a job and generating some revenue for yourself while your friends throw all of that time away. When they’re wondering why you’re so successful, you’ll know the answer.

Make Some Money on the Side

If you haven’t heard of Ramit Sethi, then you haven’t been exposed to some of the best financial advise for anyone in any age bracket. He has a great course that will teach you how to earn $1,000 a month on the side – all with the intention of helping you improve your financial situation.

I can’t recommend you purchase the system, though, because it’s very expensive, and I’m trying to help you learn how to save money, here. So instead, I’ll encourage you to learn everything you can about making some money on the side and actually putting that information to work.

Even if you just pick up some cheap, easy, freelance writing assignments, you’ll end up with a bit of extra cash that can help keep you out of debt while fueling your investment accounts. And since you probably don’t have a family and fifty million other financial obligations, yet, you’ll have the flexibility to experiment with different “side jobs” to generate serious dough.

If you do it right, you won’t even need to have a wage-based job, and you’ll come out of college with a reliable source of income – something most of your peers won’t be able to do.

Learn How to Go on a Cheap Date

You’re in college. You’re going to be looking for romance. Romance involves dates. Don’t spend a lot of money on dates.

I wish it was as easy as that. If you’re a guy, you probably think that girls judge you based on how much money you’re willing to spend on them. If you’re a girl, you probably think that a guy who doesn’t spend a lot of money on you doesn’t like you.

While both of those are rather shallow stereotypes, they are none-the-less accurate, and perpetuated by our culture. Instead, take the time to learn how to have an amazing, affordable date. There are plenty of websites dedicated to this, but I found some of these tips to be absolute gold.

Start Saving for Retirement Now

You’re in college, so I’m sure you’ve heard the phrase “the magic of compounding interest.” I won’t insult your intelligence by breaking it all down for you, but even if you’re only able to squirrel away a small amount each year, you’ll be able to retire much more comfortably (or much earlier) than those who wait to start until later.

You might not be able to take advantage of employer contributions to your 401k, yet (you’re probably not even working), but that shouldn’t stop you from opening your own money market account, index fund, or mutual fund. Each of these will follow the losses and gains of the market rather closely – and when you consider the fact that the annualized rate of return for the S&P 500 is 10.6%, you’ll realize that it’s virtually impossible to “lose your shirt” in the stock market.

The key is to develop the habit of saving and investing now, so that you continue to do it even after you graduate from college.

Design Your Chief Definite Financial Aims ASAP

If you haven’t already read Napoleon Hill’s The Law of Success, you should make it a point. Napoleon Hill defines a chief definite aim as one that is:

1. Specific
2. Time Bound
3. Measurable

You may have also heard of a similar goal-setting strategy, known as S.M.A.R.T. goals – these are: specific, measurable, attainable, relevant, and timely. It doesn’t matter which methodology you prefer to adopt – you need to have clear financial goals as soon as possible, so you can start working towards them. Here are two examples:

1. I will own a single family home with a value of $300,000 with no outstanding mortgage payments within three years of graduating with my Bachelor’s degree
2. I will have $150,000 in my investment accounts on or before the day I graduate from college

Notice that each of these are clearly defined, measurable, and have a deadline. The reason they’re so important is that they actually give you a target to hit. You might fall short, or you might exceed it. Either way, by having at least one chief definite financial aim, you’ll be working towards something that matters in the long run.

Buy a Home as Soon as You Settle Down

If every friend I know who waited to buy a home until they were ready to have children could go back and do it differently, they would have bought their home way sooner. Why? Because they could have rented the spare rooms out to their friends and paid off their mortgage about 15 years sooner.

Instead of waiting to buy a home until you’re ready to have children, plan on buying one as soon as you know you’re going to be sticking around for a while. You’ll be able to rent each room to a friend and split the cost of the utilities, too.

You can take the extra money (that would have otherwise gone towards your mortgage) and put it in your investment accounts, or towards your mortgage. Either way, you’ll end up way ahead of the curve.

Wait to Have Children Until Your Financial House is in Order

There are two schools of thought when it comes to having children:

1. Have them while you’re young, so you can enjoy your empty nest when your career is established, and the money is flowing in
2. Wait to have them until you’re a bit older and a bit more financially stable

While option number one certainly has some benefits, it’s not the best option for those of you worried about keeping your financial matters in good order. Most of the people who subscribe to option number two aren’t usually doing it for financial reasons, though – they just want to be able to provide materially rich lives for their kids.

If, however, you’re really looking at the big financial picture now, you’ll be able to put things into perspective. You can’t buy a house and rent the rooms out to your friends quite as easily when you have kids. You’ll also need a bigger house, and you’ll have to spend a lot of money on extra insurance, diapers, and all sorts of other things.

By waiting to have children until you have at least established your investment accounts and own your home outright, you’ll be at a serious financial advantage.

Bonus Tip: Screw College

I’m going out on a limb, here, but it’s worth mentioning. I’m sure you know plenty of self-made millionaires that didn’t graduate college (Bill Gates being the most famous). But there are plenty of others who are earning $100k or more per year without having finished college.

I can’t tell you that college isn’t right for you, but if you find yourself with an opportunity to generate a serious income without having to accumulate all of that student debt, then it might be worth considering it.

With a little bit of research, you’ll find that the starting salary for most degrees falls between $35,000 and $50,000. Dig a little deeper, and you’ll find that there are dozens of career opportunities starting at $75,000 to $90,000 with little more than on the job training.

Sometimes it seems like earning a college degree is just an intellectual form of keeping up with the Joneses.

Money market accounts aren’t new, nor are they particularly complicated or restricted (in fact, virtually every sizable financial institution offers one), but for some reason most people still do not know a lot about them.

Instead, other asset classes steal their thunder, classes like stocks, bonds, mutual funds, exotic instruments like exchange-traded funds, and even certificates of deposits. Yet, to make a truly informed decision for your investments, it’s important to know about money market accounts, how they work, and the benefits and drawbacks of each.

What Are Money Market Accounts?

A money market account (MMA), also known sometimes as a money market deposit account (MMDA), is a financial account that is based on money markets. I’ll explain what those are below. The money placed in a MMA is subject to interest, which is how you grow your wealth.

An MMA is very similar to a savings account. A savings account accumulates interest, but this is paid to you by the banks based off their interest rates. A MMA is based off the interest rates in the money markets. Plus, you can write checks against an MMA (for the most part; more on this later).

What is the Money Market?

A money market is exactly what it sounds like – a market for money. Specifically, the market is made up of financial institutions, like banks, credit unions, and brokerages, who want to borrow or lend money with those who have access to funds. What is being traded in these markets is called paper, which is basically a short-term financial instrument. Paper is used for short-term – less than a year – financial needs. You can think of paper as an IOU of sorts; government entities, corporations, and financial institutions all issue paper as a way of financing short-term needs.

Another way to picture a money market is to imagine a bank coming to you asking for a loan (instead of the other way around). You deposit your money into your MMA. The bank then uses this money, with other money from other people like you, to buy paper in the market. The return on this paper gives the bank a profit, which is divided between you and the other creditors (investors). You receive profit based off the interest rate for the paper.

What Kinds of Paper Can You Find in a Money Market?

A money market has several types of paper that can be bought and traded.

Treasury Bills

Treasury Bills (T-Bills) are one major type of paper in money markets. These are issued by the U.S. Treasury and are generally viewed as the safest investment securities in the world. These are bonds, and have maturity dates of one year or less from the time they are issued, in three-month, six-month, and one-year increments. At maturity, you are paid the par value (face value) of the bill. Your profit comes from the difference between the par value and the purchase value, which is lower than the par value. This is basically the same as interest.

T-bills are very safe and not subject to state or local taxes. They offer low returns, though, because they do not carry any risk.

Commercial Paper

Another main type of paper is commercial paper, or, securities offered by corporations as a way to raise money without taking out a loan from a bank. You purchase this paper at a discount, and it matures anywhere from one month to nine months. Most mature between 60 and 90 days, making them an effective way to accumulate money in the short term.

Commercial paper is pretty safe; they’re usually only issued by institutions with solid credit ratings. They are unsecured, but defaults are rare. The downside is that they are very expensive for the average individual investor, since one piece of commercial paper is worth at least $100,000 in most cases.

Certificates of Deposit

A certificate of deposit (CD) is a financial instrument that has a specific interest rate and maturity term. You place your money in a CD and you know how much you’ll receive and when you’ll get it. Since it’s a time deposit (i.e. it has to be in there for a certain period of time), it’s not as liquid as other kinds of investments.

The advantage of a CD is that return is very predictable. Plus, they are very safe, only slightly riskier than T-Bills. They also offer a higher yield than a T-Bill. Additionally, virtually any sizable bank or credit union offers CDs. Finally, they are FDIC insured up to $100,000 and typically beat savings accounts.

The downside is that rates aren’t very competitive and yield is small compared to most other assets. Also, you’ll have to pay a steep penalty if you withdraw money from your CD before maturity.

Municipal Notes

A municipal note is very similar to a T-Bill; it is a bond offered by a city to raise money. The city banks on tax receipts or other sources of revenue in the future, and issues notes against that amount to fill in short-term financial needs. You can take advantage of that by purchasing municipal notes at a discount and receiving payment when they mature.

Municipal notes are not as safe as T-Bills, but they are usually viewed as safe, since municipal defaults and bankruptcies aren’t very common. Because they are riskier than T-Bills, they generally offer a higher return (depending on where you are). Plus – and this is a big plus – the interest you receive from a municipal note is exempt from state and federal income tax (in most cases). Furthermore, you can trade them as often as you like.

A downside is that repayment is usually contingent on some future source of revenue. This is the case with revenue bonds. General obligation bonds by contrast promise to be repaid as long as the government is solvent, which means they carry less risk and lower yields. With revenue bonds, if tax receipts are significantly lower than expected – as with a recession – it is difficult to pay back municipal notes without risking bankruptcy.

Still, if you compare a municipal note with a piece of commercial paper with the same rate, you’ll often see that the total return for a municipal note is higher because of tax advantages.

Money Market Funds

Finally, there are money market funds, which are basically mutual funds with debt securities instead of stocks. These are groups of debt securities – like T-Bills or commercial paper or municipal notes – that are bundled together and sold to investors. This limits exposure to risk and gives an individual investor the chance to indirectly invest in securities that otherwise would be inaccessible due to their high cost.

Money market funds rarely lose value, but it does happen.

There are more than just these few types of paper traded in a money market, but these are the major ones you will more than likely encounter.

Why Have a Money Market Account?

The main advantage of an MMA is that it offers a higher rate of return than a savings account. Plus, it is far more liquid than a CD. Your money, with a MMA, gathers interest and can be withdrawn as you wish. Other assets, like a CD, do not have this feature.

Money market accounts are great for those who want to avoid the risk of the stock market and do not want to get involved in other types of riskier securities. Investors who also want a simple approach to saving and increasing money, yet want a higher rate than just opening a savings account and receiving a pretty paltry return, turn to MMAs.

For those who want to aggressively grow their funds, though, MMAs probably aren’t the best assets. Still, they have advantages for a wide range of savers and investors alike, and have a place even in advanced, aggressive portfolios as a way to hedge against risk.

When you think of high gas mileage, you probably don’t think of sports utility vehicles (SUVs). Sure, these bad boys may be convenient – and some are actually capable of going off road, believe it or not – but high gas mileage isn’t typically a selling point.

That is slowly but steadily changing. These days, in today’s market, SUVs are steadily becoming more fuel efficient (although none of them are anywhere close to the most fuel efficient cars on the road). You don’t even have to resort to an obscure model that runs off refined peanut oil or something exotic like that; plenty of mainstream manufacturers have models with significantly-improved fuel efficiency.

Here, we’ll take a look at this year’s most fuel-efficient SUVs on the market today. This list includes gasoline-only vehicles as well as hybrids and alternative-fuel SUVs.

(All MPG reported is combined MPG instead of city and highway. All base prices are without tax incentives, rebates, or credits.)

Ford Escape Hybrid – 32 MPG
Base price: $21,440

The Ford Escape Hybrid is a fuel-efficient version of Ford’s best-selling SUV. This vehicle has a parallel-track hybrid engine, meaning it operates in electric mode up to a certain speed (44 mph) and uses gasoline when going faster. It also comes with regenerative braking, which helps improve fuel economy. Front wheel drive (FWD) models have better gas mileage. The Ford Escape Hybrid puts out 177 net horsepower.

Lexus RX 450h – 30 MPG
Base price: $45,910

With the RX 450h, Lexus has produced the most fuel-efficient SUV for the luxury market. It is twice the cost of the Ford Escape Hybrid and delivers less mileage per gallon, but it does so without being a hybrid. Plus, the performance far outstrips the Escape; its V6 engine delivers an impressive 295 horsepower.

Mazda CX-5 – 30 MPG
Base price: $20,695

The CX-5 isn’t a true SUV; it is technically a crossover, which means it combines features of an SUV with a car. Nevertheless, it delivers a very fuel-efficient performance even if its output (155 horsepower) is on the car side of the equation.

Nissan Juke – 29 MPG
Base price: $19,990

The Nissan juke is another crossover vehicle that tries to deliver the fuel efficiencies of a car with the space and relative performance of an SUV. The turbocharged four-cylinder Juke offers a nice amount of power (188 horsepower) and an affordable price with good mileage.

Toyota Highlander Hybrid – 28 MPG
Base price: $38,715

There aren’t many hybrids and alt-fuel SUVs on the market; the Highlander is only one of two mainstream hybrids (the other being the Escape). The Highlander’s MPG isn’t nearly as good as the Escape, and the price is significantly higher, but its V6 engine with its 280 horsepower packs more of a punch. The Highlander is bigger too boot.

Mitsubishi Outlander Sport – 27 MPG
Base price: $22,695

The Outlander is Mitsubishi’s main SUV model that delivers a decent amount of mileage for a manufacturer that doesn’t market itself as a leader in fuel efficiency. It’s a pretty roomy SUV with 168 horsepower from its four-cylinder, 2.4L engine, but those looking for maximum value and gas mileage have better options.

Honda CR-V – 26 MPG
Base price: $22,495

The Honda CR-V is easily one of the most popular SUVs in the United States. Over the past four years, Honda has averaged roughly 200,000 vehicles sold a year and has grown its sales each year since 2003. The CR-V is a relatively-small SUV that gets a good amount of horsepower (185 hp) from its relatively-small four-cylinder, 2.4L engine.

Chevrolet Equinox – 26 MPG
Base price: $25,505

The Equinox is marketed as a fuel-efficient SUV, and while its fuel efficiency is noticeably lower than others on this list, but compared to its main competition – other mid-size SUVs like the Dodge Journey, Ford Explorer, and Jeep Grand Cherokee – its gas mileage is markedly superior. The Equinox delivers 182 horsepower from the standard 2.4L, four-cylinder engine. There is some controversy regarding the official mileage reported from the EPA (26 mpg) and tests from third-party reviewers; some critics allege that the Equinox inflates its mileage, although other third-party reviewers have reported similar findings to the official numbers.

Currently, there is no mainstream, mass-produced electric SUV on the market. The closest is the Toyota RAV4 EV, which gets 81 mpg equivalent. That model is sold in limited numbers only in California at the moment, and while it would make history as the first mainstream electric SUV on the market, there’s no indication that Toyota plans to expand it at the moment (the manufacturer is dedicated to hybrid technology at the moment).]

Before I finish, I’d just like to say a special thanks to freemoneyfinance for including me in the recent carnival.