Today's post may be one of the most important chapters in the entire book. It's a perfect example of the mentality that, if you just get it done, you will be set for the future.

We all love a little bit of procrastination, but given that saving for retirement is all about maximizing your time, you just need to get it done. No excuses. Just make it happen.

This is definitely easier said than done for younger folks, but you definitely know someone who isn't prepared for retirement. If they were in your position, they'd do things differently. Be smart and get started now.

******************************

Retirement.

Depending on where you are in life, it's either the furthest thing from your mind or your biggest up-and-coming worry.

Wherever you are, saving for retirement needs to be a priority. You may already be started with a 401(k) at work, or have a rolled-over IRA from a previous job. You may have nothing at all, and that's okay, too.

We won't get too deep into retirement planning, but you likely want to spend less time worrying about saving for retirement and more time enjoying life.

5 Principles of Smart Retirement Savings

• Start early – The earlier you start saving for retirement, the more time you have to grow your money, ride out the bumps in the market and establish a mindset for long-term saving.
• Take free money – If your company matches a percentage of your 401(k) contributions, make sure you are saving at least up to that level.
• Don't time the market – Trying to find the best time to invest in the stock market is a loser's game. Professional money managers can't beat it consistently, and neither can you. Live with it.
• Ride the waves – When you're investing for the long-term, your retirement funds will go up and down with the market. Don't lose sleep over seeing your account shrink, and don't get excited when it balloons.
• Own the market – Stock picking is not a long-term investment strategy. The best investments for your retirement account are low-cost mutual funds that track a particular financial index, like the S&P 500. These are called index funds.

How to Get Started Saving for Retirement

If your employer offers a retirement program, like a 401(k) or 403(b), with matching savings, this is the first place you should go.

Most retirement planners suggest you save at least 10% of your income. You should at least be saving enough to get the company’s matching contribution.

Since 401(k) and 403(b) contributions happen pre-tax, your paycheck will drop less than the percentage you've set aside. So it'll actually cost you less to set aside the money that you're saving.

Using the money you still have from your flux account, it's time to set up a Roth IRA. This retirement account has tax-free withdrawals at the age of 59½ with a number of benefits.

But first, the rules:

• In order to be eligible, your modified adjusted gross income needs to be less than $107,000 for single filers and $169,000 for joint filers
• You can contribute a maximum of $5,000 after-tax dollars ($6,000 if you are 50 or above)
• Contributions are not tax-deductible

For a broader look at the history and advantages/disadvantages of the Roth IRA, check out the Wikipedia entry.

Why Index Funds are Your Best Retirement Option

When it comes to picking your investments for your retirement accounts, you may or may not have a choice. Most likely, your company's retirement plan limits – or heavily suggests – what you should invest in. But for your Roth IRA, you have the freedom to determine where your money is going.

If you're looking to spend less time managing your retirement accounts and still come out near the top with your long-term investments, look to index funds.

Index funds are the investments that professional retirement planners don't want you to invest in. They're not actively managed by a fund manager, they can never beat the stock market, and they rarely change their holdings.

Guess what? Those are all great things.

Because index funds are consistent in their investments, they have low turnover (buying and selling) fees. Thanks to fewer transactions, they don't need a money manager who takes a cut of their earnings (win or lose). And despite the fact that they will never beat the stock market, they will outperform almost every other mutual fund over time.

Where Should I Open a Roth IRA?

While many financial institutions offer Roth IRAs, it's my experience that the best one to use is Vanguard.

Vanguard founder John Bogle created the first index fund in 1976 and is undoubtedly the leading name in passive, low-cost index investing. Using his philosophy, Vanguard offers a large selection of index funds, including that first index fund – the Vanguard 500 Index, now one of the world's largest mutual funds.

Head over to Vanguard's Web site at www.vanguard.com and sign up for access. You'll need to have some personal information handy to fill out.

Follow Vanguard's prompts for getting started. Once you get your account set up, come back and we'll continue.

TIP:  Because understanding your retirement goes well beyond what we've covered here, a must-read is "The Bogleheads' Guide to Investing" by Taylor Larimore, Mel Lindauer and Michael LeBoeuf. The book – written by followers of John Bogle's investing philosophy – breaks down everything you need to know about investing for retirement. It's a great read for everyone, no matter where you are in your savings journey.

OK, there's not actually any robots involved in today's post, but the image above was too good to pass up.

Now that we've got your accounts open, it's time to put the system in place to automate your success. The beautiful part about this is that once you set it, you can essentially forget it. You don't have to worry about remembering to transfer money into your savings each month … it'll be done automatically.

PS. I haven't plugged purchasing the PDF version of the ebook in a while, but if you want to support this great content, here's the link to get a downloadable copy.

******************************

This is where it gets fun. Today, you're going to set up processes to automatically save for your goals and dreams. And once you get it going, you'll barely ever have to check back in.

Using your online savings account, you can automate savings from your central checking account on a weekly, bi-weekly, or monthly basis.

But before we set it up, let's look at the reasons why automating is so important.

5 Reasons You Should Be Automating Your Savings

• Treat Saving Like a Bill – Instead of waiting until the end of the month to see how much money you have left over, automating your savings treats it like a bill you have to pay. Saving is now a priority; it's not something you try to do when you can.
• Pay Yourself First – The second most important personal finance principle – after spending less than you earn – is to pay yourself first. You'll never build your net worth and reach your goals if you aren't saving, and automating that is crucial to consistent growth.
• Remove the Human Element – When your money moves automatically, you never make the mistake of forgetting to put it aside, transferring the wrong amount, or making a mental excuse for why you can’t save it this month.
• Feel Comfortable – Stop worrying about whether you're saving enough, or if you'll have the cash to put aside this month. When the system is set up to work for you, you can feel comfortable that you're on track to reach your goals.
• Save Time – Your time is valuable. Why not use these tools to spend your time doing the things you love, rather than managing your money?

Thankfully, ING Direct – and pretty much every other online savings account – makes it extremely easy to automatically transfer money into your specific accounts.

How to Automate Your Short-Term Savings

After you've logged in to your ING Direct account, click on the "Transfer Money" tab to get started.

Using your budget calculations from Day 9, enter your monthly savings set-aside into the "Amount" field, with the money moving from your central checking account to your specific goal account.

Choose the recurring frequency, with the transfers happening monthly on a day that you choose.

Select a start date, with a finish date of the specific month you'll reach your savings goal.

Click continue, double-check everything, click accept and … you're done!

Literally. That's all you have to do to automate your savings.

It's so easy, you're probably wondering why you haven't done this before. You've done it now; that's what matters.

If you're going to be saving for more than one short-term goal at a time, repeat the automation process with the money going into its designated fund.

Remember to set up your once-in-a-while fund to be automatically filled. Even though it's not technically a savings account, treat it like one until you need to access the money to pay those bills.

Shouldn't It Be Harder Than This?

Saving your money isn't hard when it's happening automatically – that's the beauty of it.

How often have you worried about whether you're saving enough (or at all)? Have you ever worried about needing money in an emergency?

When you've got the money in the bank – and are growing it monthly without a lift of your finger – those worries disappear. And when the day comes that you need to spend that money, you don't have to worry about having it at all. You've got it.

Now that you've got your short-term savings in place, it's time to move on to your longer-term goals, including retirement. We'll take a look at that tomorrow.

TIP: Don't forget: after you set up your short-term transfers, you should still have money left in your flux account for retirement. If you're down to nothing, you'll need to slow down your short-term savings. Take a few more months for your vacation fund, or save for fewer short-term goals at a time.

I know I've written about it before, but the day I opened my first online savings account literally changed the way I manage money.

It was back in the good old high-interest days of the mid-2000s, when you could find an account paying 5% or 6% in interest. I remember putting money into the account, and checking it a couple of times a day … and seeing more money than I had put in.

While interest rates for savers generally suck today, seeing your money make money on its own has a profound effect on your savings habits. 

******************************

The Automatic Finances system is built upon using today's technology to make your life easier and your money work harder for you.

It isn't possible without a modern banking invention: the online savings account.

What's an Online Savings Account?

An online savings account is, generally, no different than an account that you have with a brick-and-mortar bank. It's a totally secure bank account where you can make deposits, withdrawals and transfers.

You may have an online savings account from your local bank, or from an Internet-only bank, like ING Direct. Sometimes they're also called a high-yield savings account.

So what's the difference between an online savings account and your brick-and-mortar account? An online savings account has fewer fees and minimums, and makes your money work harder for you.

The best online savings accounts have:

• no monthly fees
• no minimum balances
• an interest rate higher than brick-and-mortar banks

Generally, online savings accounts offer all of these benefits because their costs are much cheaper than traditional banks. With little overhead for online-only banks, they can offer better rates and minimize the fees and other costs.

How much better are online savings accounts? Let's take a look.

A Comparison: Online to Brick-and-Mortar

If you've been saving money with your local bank, you've probably been ripped off.

Let's take a look at Bank of America's Regular Savings Account:

• 0.20% APY (annual percentage yield)
• $3 monthly maintenance fee (without a balance of $300 or automated $25/monthly savings)
• $3 fee for more than 3 withdrawals per month (if balance is less than $2,500)
• $25 to open

Compare that to ING Direct's Orange Savings Account:

• No monthly fees
• No minimum balance
• No fees for withdrawals or transfers

Without a doubt, ING Direct offers a much better product that will make you more money than old-fashioned savings accounts.

But Is It Safe?

If you have an online savings account, you should feel just as comfortable depositing and withdrawing money as you would with your brick-and-mortar.

Many brick-and-mortars have even begun offering their own high-yield, online savings accounts. If you feel more comfortable opening an account with a bank you know (like HSBC), your favorite bank may offer their own version.

Online banks like ING are FDIC-insured just like brick-and-mortars, which means that the Federal Government will ensure your deposits up to the same amount.

Depending on where the Federal Reserve sets certain key interest rates, the return you get on your online savings account will change. It's totally normal for APYs to go up and down, normally in relation to the Fed rates.

Open Your Short-Term Savings Accounts

Now that you have a better idea of why you should save online, it's time to open up your online savings accounts.

There are a number of Internet banks with online savings accounts as well as brick-and-mortars with competing high-yield accounts.

Some of the high-yield online savings accounts come from:

• ING Direct
• HSBC Direct
• FNBO Direct
• Emigrant Direct
• E-Trade
• WTDirect
• E-Loan

While each one of these has positives and negative features, we recommend using ING Direct.

Why ING Direct?

ING Direct, part of the international financial institution ING Group, is an online-only bank founded in 2000.

Their most popular account is the Orange Savings Account, one of the most flexible and low-cost high-yield accounts available. The Orange Savings Account was one of the first high-yield online accounts, which many competitors have attempted to imitate.

ING Direct offers a number of benefits over other accounts, including:

• No fees or minimums
• Ability to open sub-accounts
• Easy linking to external bank accounts

So let's get started opening your Orange Savings Account. If you choose a different online savings account, the sign-up process will be different, but should be generally similar.

How to Open Your Orange Savings Account

Before you can open your account, you need to gather a few items.

ING breaks it down:

1. Be sure to have your checkbook handy – you'll be making your initial deposit electronically from your existing checking account. This will create an electronic link between both accounts so you can easily transfer funds in the future.
2. To verify ownership of your checking account, we'll ask you to verify 1 or 2 small amounts, each less than $1.00 that we'll deposit into your checking account (this must be done within 60 days).
3. Your initial deposit and any recurring deposits that you set up will be withdrawn from your linked checking account even if you haven't confirmed the 1 or 2 small deposits.
4. If this is a joint account and your joint account holder is on your external checking account, that person is also required to confirm the 1 or 2 small deposits.
5. Until the link verification is complete, you (and your joint account holder if you have one) will not be able to make withdrawals from your ING DIRECT Account.
6. Withdrawing money, regardless of when it was deposited, cannot be done for the first 10 business days after the account is opened. All future deposits are subject to a 5 business day hold before they can be withdrawn.

Ready? Let's go!

At This Point…

Rather than double up on the process of opening your account, follow ING's directions. Link your central checking account to your new savings account. When you're done setting up your account, come back here and we'll show you how to get the most of it!

Click here to get started.

Setting Up Your Subaccounts

Now that you've set up your Orange Savings Account, it's time to make it even more useful.

One of the great things about ING is its ability to set up "subaccounts" within your Orange Savings Account. Under one umbrella, you're able to have multiple accounts for specific goals.

So when you're saving for more than one goal, or housing your emergency and once-in-a-while funds, you can keep the specific money separate to know exactly where you are.

In order to open a subaccount for a specific goal:

1. Log in to your ING Direct account
2. Click on the "Open an Account" link
3. Click on "Orange Savings Account" and then "Open Now"
4. Select either Single, Joint or Living Trust
5. Give your account a nickname relating to your goal: Emergency, Once-in-a-While, Vacation, etc.
6. Fund it with some money – even if it's only $1 to begin – from another account
7. Agree to the terms, and click "Open Account"
8. Start saving!

That's it! You'll now see the new account on your main page, with all of your other accounts.

Do this for each account you need, making sure that you give it the appropriate nickname. You can also re-name the first account you opened to specify what that money is to be used for.

TIP: One of the best reasons to open subaccounts for specific savings goals is so that you can physically – not just mentally – separate those funds from your other savings goals. The last thing you want to do is mix your emergency fund with your vacation fund.

So at this point, if you've been following along, you've basically gotten a big picture look at your financial situation.

You know what you're bringing in, how much you've been spending and what you've been spending it on. But now it's time to focus on what you're keeping — your savings goals. I have to admit, I love saving money. I don't mean getting discounts on stuff at the store and not actually adding any money to my bank account — I mean seeing my targeted savings accounts (more about that soon) filling up.

It's a great feeling. I hope you have it, too.

******************************

If you don't know where you're going, there's no way you're going to get there.

Saving money isn't just about stockpiling cash; it's about where you want to be in life and what you want to do. Money is only as good as what you can do with it.

So it's important that you know what you're saving for before you start.

What are You Saving For?

First, write down the things that you're saving money for.

These could include:

• an emergency fund
• a car
• real estate
• college/school
• kids
• vacation

Chances are you're saving for more than one of these, so it's important to prioritize.

For example, having an emergency fund of 3-6 months of expenses may be the most critical to have. Should you unexpectedly lose your job, you'll have a cushion on hand. A vacation may come next, and so on.

Your priorities might be different from anyone else's, but it's important that you decide what comes first. List out your number 1, 2, 3 etc. priorities to determine where you should start.

Don’t think that you must save for everything at the same time, though you may want to, depending on when you'll need the money.

You may have noticed that retirement is not on this list; we'll get to that in a few days. Saving for retirement normally involves more than one vehicle (a 401(k) and Roth IRA, for example), and its handling and management is different than short-term goals.

What Will it Cost?

After you've prioritized your savings goals, you need to figure out what they'll cost.

Certain goals are easier to calculate than others. An emergency fund is typically 3-6 months of your household expenses. You can make a ballpark guesstimate on what a vacation will cost you.

To determine how much you need to be putting aside each month, list estimated costs next to the things that you're saving for. For the smaller goals, be as specific as possible. For the bigger goals, a ballpark estimate will do.

Divide the amount by the number of months you'd like to take to reach the goal, and you've got your monthly set-aside.

Adjust your timetables accordingly; if you see that you can't save $10,000 in 12 months, give yourself more time.

It's up to you to make smart decisions about what you can handle financially.

Add to Your Budget

After you've determined your monthly set-aside for savings, add it to your budget in Yodlee (or your account aggregator).

At this point, most of your Flux total should be used – but not ALL of it. There's still one more important thing to save for – and you'll want to have room to pay for this.

3 Tips for Short-term Savings

When you're saving for short-term goals, it's easy to get overwhelmed with putting money aside. But it doesn't have to be.

Here are 3 tips for saving for short-term goals:

• Save for One Goal at a Time – It's much easier to attack one goal with as much force as possible then to spread yourself out over multiple goals. You can't always focus on just one savings goal, but if you can, do it.
• Push Yourself to Reach it Quicker – By determining how long you'd like to take to reach the goal, you've given yourself a maximum amount of time necessary. Aim to hit it quicker by pocketing bonuses, gifts, and any raises you get.
• Make it Part of Your Spending Routine – If you're at the supermarket or out at the mall, think about what you're spending money on: could you get something cheaper (or not at all) and put the difference toward your savings?

TIP: Saving money can be one of the most exciting things you do. You've probably experienced it when you got a good deal on a purchase; putting money aside is just as good. When you find you already have the money to buy something you need, you don't stress about it – you enjoy it.

It?s often said that trouble comes in threes. This past weekend, I narrowly avoided not one, but three expensive bills.

On Friday, the washing machine broke down; it wouldn?t drain, leaving the drum and the laundry full of water. Fortunately, I was able to open it up and disconnect the pump from the hoses.

Inside, I found a wooden splinter obstructing the pump. After reassembling it, the washer was working fine.

On Saturday, our furnace stopped working. When the guy from the gas company came, he said that the sensor had crapped out and would need to be replaced. The cost of getting the part, and getting another tech to come on the weekend, would run several hundred dollars.

But just as he said that, he spied an object sitting on top of the hot water tank, right next to the furnace.

It was the part we needed! It was covered in dust, and honestly, was there when we bought the house five years ago. I have no idea how or why the original homeowner left it there in plain sight, but it was only my basic laziness that meant I had never moved it or thrown it away. Saved!

On Sunday, the toilet in the master bathroom was leaking. In order to provide some back-story, I?ve replaced various parts on that toilet repeatedly over the past five years, so much so that I started to wonder if it was cursed or haunted.

As I result, I wondered if this was going to be the time that a band-aid solution wasn?t going to work, and I would have to replace the toilet with a new one. This time, it was just that the nut connecting the water line to the flow valve was loose, and required tightening.

Preparing for the Worst

I had three strikes of bad luck this past weekend, balanced out by three strokes of good luck. But it got me to thinking: what if each of those situations had ended up to be worse than that?

What if I needed a service call and a new part for the washing machine, the furnace, and I needed to go buy a new toilet and install it, all at the same time?

Financially, that would suck. It wouldn?t be the end of the world, but it would mean spending close to a thousand dollars that I don?t just have lying around ?just in case.? That means it would have to come out of another budget, probably one earmarked for a new furnace, since the current one is fifteen years old, low efficiency and at a stage where it?s living on borrowed time.

Having to shell out for three catastrophes in one weekend would set back my new furnace plans.

The bottom line is that, as a responsible adult, you need to have an emergency fund for when unexpected bad situations occur. Alternately, having access to an open line of credit is another resource, although not as good a one as using cash.

Preparing for the worst doesn?t necessarily mean living in a bunker with a supply of canned food, guns, and ammo. But it does mean keeping funds earmarked for emergencies around.

And ?we?re out of beer!? isn?t the kind of emergency I mean.

You don't have to be 55 to start thinking about retirement. In fact, if you've waited that long, you're in a bit of a pickle.

While retirement often seems far away if you're in in your prime working years, you need to make it a priority … now. Because the scary truth is that most people don't — and that's how most people end up broke.

Take a guess at how many American workers have less than $10,000 socked away for retirement.

Ready?

43%.

And how many have less than $1,000?

27%. Yes, 27%.

Think about it for a second. $1,000 is literally almost nothing to last on; $10,000 is probably less than a six-month emergency fund for most families.

And that's scary. Especially because you can't count on Social Security to provide much, if anything, to you.

Sure, some of it is because of the economy, and people raiding their retirement accounts to keep afloat. But that's not the entire problem; the number of people who have saved for retirement (like, ever) dropped from 75% last year to 69% this year.

It's an attitude change as much as it is anything else.

Here's how you save for retirement:

1. Start Now (or as soon as you have paid off all non-mortgage debts)
2. Invest in Your Company's 401k up to the match
3. Open a Roth IRA
4. Invest only in index funds
5. Dollar cost average if you don't have big chunks of money
6. Once a year, re-balance.

All of this information is available in the Automatic Finances ebook — the $7 download that will change your life. If you haven't gotten your copy yet, click here to download.

P.S. Based on current sales trends, I am heavily considering increasing the price of Automatic Finances from $7 to $17. Soon. So if you're on the fence but want to save yourself $10, get your copy now.

I stumbled across this video the other day on YouTube, and let's just say, I was rolling my eyes the entire time.

But, it could just be me. Watch this video, let me know what you think in a comment, and then I'll share my entire thoughts.

You never know where the best tips to save money will come from.

(Well, we do know one thing: don't listen to most athletes.)

But there are some celebrities who actually do know how to manage their money and save for the future. Case in point: Jay Leno.

How to Turn a Side Job Into Real Savings

The former host of The Tonight Show has been doing stand up comedy on the side for years, despite his fame and millions in earnings from late night TV. But it's not just a way to test out new material and keep him fresh — it's also a way to save money for the future.

In the latest issue of American Way magazine, Leno explains:

I have always been a believer in the two-job theory. I live on one job and bank the other.

When I was a kid in school, I worked at McDonald's and at a place called Wilmington Ford, and I would spend the money from one job and save the money from the other one. And that's what I've always done as an adult. I basically live on the money I earn from personal appearances.

It's no secret that having a second job can be a great source of money. But if you have a secondary source of income — from a part-time job, freelance work, a blog, or even eBay sales — what are you doing with that money?

You may not be making as much as Jay Leno (he obviously makes enough to afford all of those cars), but the idea is the same: pocket any extra money you make for the future as often as you can.

(Photo by Alan Light)

Years ago, a friend far more driven by money than I am shared with me this saying: "Pennies become nickels, and dimes become dollars."

His point, of course, is that putting together a lot of small savings or a lot of small profits adds up to something big.

In order to cultivate a frugal mindset, you need to approach your everyday activities with the mindset of a professional efficiency expert. Ask yourself: "Is there a way that I can do this better, and cheaper?"

The answer is almost always, "Yes!"

The habits you need to be frugal are no-brainers, and writing about them feels like Pointing Out The Obvious. But it's important to remember that even simple ideas are a lot like baking bread: if you don't know how, you just don't know.

If you do know, it's so obvious that you can't imagine anyone not knowing it. So with that in mind, let's look at a money saving idea that's so obvious that it's easy to overlook: coupons.

Coupons + Sales Calendar = Frugal Success

One frugality habit that came to me later in life is clipping grocery coupons. When I was young and single, I went to the store and bought what I wanted to eat without really thinking about an overall budget or what things cost.

Today, with a family, things are different, and so is my attitude towards household expenses. Raising a family isn't cheap, but by adopting habits that take advantage of grocery stores' coupon offers, you can cut your household's expenses, saving money for other pursuits.

My family primarily patronizes a single grocery store, and in addition to accumulating their reward points, we know that they run a predictable calendar of sale offerings from week to week. One week may be Buy-One-Get-One, another may be a bonus points event, and another may be the Case Lot Sale.

Stocking Up on Sale Items

If your family is anything like mine, you consume the same staple items week in and week out. You also know what's in your fridge, freezer and pantry, and know when you're getting low on something.

With that knowledge, and knowing your local grocery store's promotional calendar, it makes sense to stock up on what you routinely use when it's one sale.

Need bread? Buy it when it's on promotion, and keep it in the freezer. Canned goods? Wait for a case lot sale. Chicken? Get it on BOGO. Know that you're running low on laundry detergent? Look for a coupon.

You get the idea.

Not that you also can't have a little spontaneity, like deciding to pick something up on the way home, but if you routinely bargain hunt for the regular staples, little indulgences aren't quite so guilty.

I've also found that by registering with household goods vendors, we routinely get coupons mailed to us every month. Getting money off things you were going to buy anyway is hard to refuse. It's especially handy if you have small kids: diaper makers are only too happy to mail you coupons to get you to buy their wares.

Collecting and using coupons isn't the most exciting money-saving strategy, but don't discount (sorry!) the benefit that saving pennies, nickels and dimes on your grocery bill will have on your bottom line.

Every fall, U.S. News and World Report publishes its annual Best Colleges list, which includes current tuition and fees. This and other college guides are excellent sources of tuition information, but generally this is only the sticker price.

When it comes to tuition, the schools to watch are the state's flagship public universities.

In Virginia, that is the University of Virginia; in Michigan, it is the University of Michigan; in California it is UC Berkeley and so on. Each state has at least one well respected state supported university.

Private Schools Will Cut Tuition for Excellence

Tuition at a state's flagship university will be well below private colleges, and that includes private colleges with and without a national reputation of academic excellence.

Private schools do not get a legislative appropriation, so they must have higher tuition than state universities to meet their budgets. Higher tuition puts them at a disadvantage to attract the highest achieving students who can attend a state's flagship university at much lower cost.

To attract excellent students, private colleges are willing to offer a combination of options that sound like scholarships or grants, but really amount to a tuition cut.

Know Your Local Tuition to Leverage Scholarships

The market competition for students makes tuition at flagship state universities the floor for discounted tuition offered to high GPA students. This is why the first thing you need to know is the tuition of your state's flagship university.

For example, the published tuition for North Carolina residents at the University of North Carolina at Chapel Hill is $5,625, which becomes the benchmark tuition for North Carolina residents. If that is too much to pay, then expect other smaller and lesser known state colleges to have lower in-state tuition, or consider a junior college. Use the benchmark $5,625 as your maximum.

If $5,625 is not too much to pay, a student with a high GPA can apply to any number of out of state private schools and plan to get, or hold out for, an offer around $5,625.00. Colleges now generally request a list of other college applications. It is a good idea to tell them, and as a bargaining strategy to include your state's flagship university on the list.

There was a time when parents would tell the kids to "Study and you'll get into a good college." Now it should be "Study and we'll save a bundle."

Private colleges will cut their price for good students; make it be you.