Part two was focused on saving wisely. Part three is on spending wisely. I know, it almost goes without saying. The focus, though, is not simply on buying less expensive items but rather on buying with purpose. When in graduate school (or undergraduate school), get the right tools at the right price to make MORE MONEY than if you had not invested in the tool. In short, prioritize purchases that will make you money.
There are many examples, from the kind of computer software (Publisher to make your own flyers) or the kind of phone in order to get a better camera (for pictures of items sold on Ebay). But among the many types of tools, the most potentially wasteful is a car. In graduate school, I didn't have a car until my third year. I used a bike to travel the four miles to campus and the L and bus to get to my part-time job. My bike was a tool to get to school and around Chi-Town, and the price it was purchased for reflected that fact.
But I decided to buy a car because I would have options among better work opportunities and more time to take on more work with the time I saved in travel. In other words, the car would make me more money. Now, consider the cost versus the reward. Some may think that I bought a used car from a dealer. No. I bought a $400 dollar Geo Metro from a generous colleague. This car so happens to continue to be my favorite. The car was a tool, and it served me well. I made several thousand dollars extra, and saved money driving instead of flying from Chicago to South Texas (not recommended, in hindsight). I reluctantly sold the car because Albuquerque's hills were too much for 2.67 cylinders to push. And, as promised to my generous colleague, I sold it for $350 to someone who also needed a leg up.
The approach is simple. Ask yourself "Will this purchase improve my debt situation?" and "Will this purchase improve my ability to graduate faster?" If the answer is no, it is not worth it in the long run.