byob build your own budget
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BYOB Build Your Own Budget. Build Your Own Budget. What is a budget? Spending guidelines Creating a realistic budget Budget S.O.S. group activity Making it stick Benefits of starting now Resources. Budgeting. What is a budget? Make the most of your financial resources - PowerPoint PPT PresentationTRANSCRIPT
BYOB Build Your Own Budget
Build Your Own BudgetWhat is a budget?Spending guidelines
◦Creating a realistic budget◦Budget S.O.S. group activity
Making it stickBenefits of starting nowResources
BudgetingWhat is a budget?
◦Make the most of your financial resources
◦Determine monthly allowance◦Plan how to spend limited funds
Why create a spending plan?◦Reduce unnecessary expenditures◦Unsubsidized loans accrue interest
Who can benefit?◦Everyone
Creating a Realistic Budget
Three easy steps….1. List the income you expect
and when you expect to receive it
2. Write down your expenses – keep a list as they occur
3. Add up the two columns and find a balance
Cost of Attendance – 10 monthsCollege Expenses under your control
◦Living expenses - $782 per month◦Transportation - $303 per month◦Personal stuff - $510 per month
College Expenses NOT under your control◦Tuition and fees◦USMLE exam fees and travel◦Books and supplies (allowances by year)
M1=$2380, M2=$1020, M3=$930, M4=$560
Spending Guidelines
Housing33%
Transportation19%
Food13%
Other10%
Savings10%
Health care6%
Entertainment5%
Clothing4%
Source: U.S. Bureau of Labor and Statistics
Budgeting the Cost of AttendanceGuideline % Per
GuidelineStudent A Student B
Housing – 33% $526 $558 $600Food – 13% $207 $230 $200Transport – 19%
$303 $300 $210
Clothing – 4% $63 $60 $73Entertain – 5% $80 $80 $85Health Care – 6%
$96 $207 $207
Savings – 10% $160 $10 $10“Other” – 10% $160 $150 $120Monthly Budget
$1,595 $1,595 $1,505
*Tuition/Fees, Books/Supplies, USMLE have their own budget.
COA = $15,950 / 10 months = $1,595 per month
What is $3 a day worth?Daily Cost $3.00Monthly Cost $90.00Months in Year 12Total Yearly Amount $1,080.00Total borrowed after 4 years $4,320.00Annual Interest Rate 6.8%Interest after one year on first loan $260.00Interest after four years on all four loans
$604.00
Interest during grace period $145.00Total owed at repayment $5,069.00
Monthly loan payment $58.33Total payments $7000Total interest* $2680*4 yrs school, 6 month grace, 10 year repayment
Financial Aid AdjustmentsExtra money? Return it!
◦You have 120 days from disbursement to return any portion of your loan without penalty (it’s in your promissory note)
◦Email me the details – I can specify which loan to return while you can’t
Ask for budget adjustments for car repairs, medical expenses, daycare, computer purchases, etc.
Budget PitfallsBeware of variable expenses
like…◦Parking◦Eating out◦Gifts◦Fun money◦Cell phone◦“Miscellaneous”◦Dry cleaning/Laundry
“Personal finance is 20% head knowledge and 80% behavior.”
-Dave Ramseyauthor of “The Total Money Makeover”
Budget SOS (Save On Spending)Discuss budgeting pitfalls and
saving tips in the following areas:◦Food◦Housing◦Transportation◦Entertainment◦Personal
Designate a scribe for the groupCollection of tips will be posted to
web
Save on GroceriesBecome a strategic shopper
◦Never go shopping hungry!◦Stick to your list◦Stock up on items when they are on sale◦Start a price book so you know when those
items typically go on sale◦Use coupons when items are already on sale◦Know who will double or triple your coupons◦Know where to find coupons
www.couponmom.com
Save on Housing – House vs. AptHouse Costs
◦Electricity and gas +$75◦Water, trash, sewer +$65◦Yard maintenance +$25
Time Costs◦Yard maintenance 4 hours◦House cleaning4 hours
Total possible monthly savings: $165Total time savings: 8 hours
Save on TransportationRaise insurance deductible to $1,000Consider dropping comprehensive or
collisionShop around for insuranceMaintain itRepair itSell itCar poolPublic transportation?Move closer to campus
Save on EntertainmentRent a DVD vs. going to a movieTake a few bucks and leave your
wallet at homeTake poor friends with you!Volunteer for local eventsSwap and shareDo you really need cable?
Save on BankingFree checking vs. “free” checking
◦Balance requirements, checks, etc.◦Overdraft fees, bill paying fees, etc.
Convenience fees◦Check card fees◦Using other ATMs
Discounts and Services◦Using multiple services◦Automatic payments◦Overdraft protection/Line of Credit
Making Your Budget StickHave a plan and write it downEliminate temptationsUse Cash (or credit….)Prioritize your spendingReward yourself when you meet
goalsThink long-term (remember
6.8%)Find a system that works for YOU
Benefits of Starting NowSave money
◦Means fewer debt problems◦Better prepared for future◦Your borrowing from your future income
Learn new money tools◦Take control of unknown◦Be prepared
Reduce stress
If you aim at nothing…….you’ll hit it every time.
Online Resourceshttp://som.missouri.edu/financial/smartd
ocs/
Office for Financial SuccessAAMC : FIRST for Medical EducationBankrate.comwww.kiplinger.comMint.comwww.daveramsey.comwww.suzeorman.com
What’s next?
Demystifying CreditNovember 4th at Noon
M105