Millions of new college students are preparing for a fresh chapter of personal independence when they head for campus this fall.

For most freshmen, it will be the biggest taste of freedom that they've ever experienced: No one around to blow the whistle on 3 a.m. pizza parties. They'll be free to bag that crack-of-dawn English class and sleep in until noon.

Oh yeah ... nothing like that first full whiff of independence. But as parents are quick to point out, the flip side of independence is responsibility. And when it comes to managing money, many a student will graduate cum laude from the School of Hard Knocks before learning how to cope with their finances.

The two biggest challenges: managing day-to-day cash (aka living on a budget) and avoiding the tar pit of credit card debt.

Budget Is Not A Four-Letter Word

Most of us know what it's like when there is too much month left at the end of our money. So now is a good time for students and parents to sit down and figure out a realistic monthly budget for life on campus. Expenditures may include:

Meals not covered by a meal plan
School supplies
Entertainment
Medications and personal-care items
Telephone and the Internet
Transportation
Miscellaneous

Write down estimates of these expenses on a monthly basis. (If the budget later turns out to have been a little stingy, adjustments can be made.) How much, if any, of this amount will the student be responsible for earning through part-time work? How much, if any, will be sent from home?

One Lump Or Two?

How often should living-expense money be sent to the student? A lump sum for the semester seems a bit risky. The young scholar could be broke by Homecoming weekend. Some students can manage a monthly payment; others may need the money tank topped off every two weeks. Those on the two-week plan can be promoted to monthly payments once they've proven themselves.

Many students will be opening a checking account for the first time. Banks are eager for young customers who often stay with a bank for years after opening accounts as freshmen.

Now is a good time for parents to show students how checking accounts work and how to balance a checkbook (assuming that the parent knows how to do this). Based on my own unscientific research, it seems that millions of adults never balance their checkbooks. I wonder if it's the same people who have perpetually blinking "12:00"s on their VCRs?

Anyway, a few checking-account pointers should be passed down through the generations. Students should look for an account that meets their needs, such as reasonable minimum balances, low monthly fees and convenient ATM locations.

Credit Vultures Are Circling

Virtually all students will be offered credit cards. It may even seem like they are being force-fed credit cards. One campus bookstore that I visited stuffed a credit card application in every bag carried out of the shop. Credit card companies engage in feverish campaigns each fall to sign up new students, despite their having no credit history or visible means of support.

Many a student has learned the harsh and bitter lessons of easy credit. It's all part of that double-edged independence/responsibility thing. You can dig a much deeper hole with a sliver of plastic than you can with a backhoe and a dump truck.

Mom and Dad may have lost a few battles in the credit wars and may be in no position to preach the gospel on this matter. But whether they learn it the hard way or the easy way, every student needs to know that credit is a huge responsibility and must be very carefully managed.

Here are two rules, one for each thumb:

It's good to have a credit card for convenience and emergencies and to build a credit history.
Do not use a credit card unless you can pay off the bill each month. In other words, don't use credit to live beyond your budget or engage in "lifestyle creep."

Many students are lured into the credit trap until it becomes a miserable burden and they can't even meet the minimum monthly payments. That's when Mom and Dad are asked to step in and save the day (and keep Junior from botching his credit record before he's old enough to be served a drink). Credit card companies count on this homegrown rescue service, and that is why they feel free to litter campuses with applications by the ton.

Heading off to college is a great experience -- exciting and somewhat scary for the student, and bittersweet for parents. Taking time to share a few lessons from Money 101 may help this wonderful transition go a lot more smoothly.