BYOB Build Your Own Budget

1. BYOBBuild Your Own Budget

2. Budgeting • What 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

3. Creating a Realistic Budget Three easy steps…. • List the income you expect and when you expect to receive it • Write down your expenses – keep a list as they occur • Add up the two columns and find a balance

4. Cost of Attendance – 10 months • Fixed College Expenses • Tuition • Health Insurance • USMLE Step exams • Books/Supplies (year) • M1 = $2400 • M2 = $1,020 • M3 = $930 • M4 = $560

5. Cost of Attendance – 10 months • Variable College Expenses • Living expenses - $11,790 or $1,179/m • Transportation - $2,412 or $241/m • Personal stuff - $3,188 or $318/m • Total = $17,390 or $1,739/m

6. Spending Guidelines Source: U.S. Bureau of Labor and Statistics

7. Budgeting the Cost of Attendance COA = $17,390/ 10 months = $1,739 per month *Tuition/Fees, Books/Supplies, USMLE have their own budget.

8. What is $3 a day worth? Monthly loan payment $58.66 Total payments $7,040 Total interest* $2,717 *4 yrs school, 6 month grace, 10 year repayment

9. Financial Aid Adjustments • Return excess funds each semester • You have 120 days from disbursement to return any portion of your loan without penalty (it’s in your promissory note) • Borrow less and ask for more later • Ask for budget adjustments for car repairs, medical expenses, daycare, computer purchases, etc.

10. Budget Pitfalls • Beware of variable expenses like… • Parking • Eating out • Gifts • Cell phone • Class Dues • Dry cleaning/Laundry • Expenses paid yearly • “Miscellaneous”

11. “Personal finance is 20% head knowledge and 80% behavior.” • Dave Ramsey • author of “The Total Money Makeover”

12. Save on Groceries • Become 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

13. Save on Housing – House vs. Apt • House Costs • Electricity and gas +$75 • Water, trash, sewer +$65 • Yard maintenance +$25 • Time Costs • Yard maintenance 4 hours • House cleaning 4 hours Total possible monthly savings: $165 Total time savings: 8 hours

14. Save on Transportation • Raise insurance deductible to $1,000 • Consider dropping comprehensive or collision • Shop around for insurance • Maintain it • Repair it • Sell it • Car pool • Public transportation? • Move closer to campus

15. Save on Entertainment • Rent a DVD vs. going to a movie • Take a few bucks and leave your wallet at home • Volunteer for local events • Swap and share • Do you really need cable? • Take poor friends with you!

16. Making Your Budget Stick • Have a plan and write it down • Eliminate temptations • Use Cash • Prioritize your spending • Reward yourself when you meet goals • Think long-term • Find a system that works for YOU

17. If you aim at nothing……. you’ll hit it every time.

18. What’s next? Understanding Credit November 14that Noon S255