Welcome to the first seminar:

1. Welcome to the first seminar: MONEY TALKS BUDGETING presented by the Financial Aid Office and the Medical Alumni Association

2. How to build your budget • Make a list of all of your resources • Make a list of all of your expenses • Don’t forget non-monthly expenses • Gifts, car maintenance, insurance, taxes, books, boards, etc • Can build these into your monthly plan

3. Resources First, make a list of all of your resources for medical school. • Help from family: parents, grandparents, aunts, uncles, siblings • Personal (or spouse) income or savings • Scholarships: • Need-based school scholarship (must qualify each year) • Non-need-based scholarships (school and outside): • www.finaid.org • www.fastweb.com • Hampton Roads Community Foundation • Beware of scholarship search sites that make you pay! • Service-based scholarships • Loans: • School loan (must qualify each year) • Federal loans • Other loans: private, family, outside

4. Loans • School loan • Need-based, must qualify each year • No interest while in school or grace period • Fixed 5% interest, must pay INTEREST-ONLY during residency • Federal loans • Unsubsidized Loans • 6.21% fixed interest rate for 2014/15 • Interest starts accruing immediately after disbursement • Maximum listed in your financial aid award letter • Graduate PLUS Loan – Loan of last resort • 7.21% fixed interest rate for 2014/15, must contact your counselor • Can make up difference between aid and Cost of Attendance • Private loans • Variable or fixed rate • Variable rates have nowhere to go but up, begin repayment in 4-11 years • Ask lender for terms • Consider: residency options, forgiveness options, payment plans, interest payment and capitalization policies

5. Expenses Make a list of all of your monthly and non-monthly expenses. Make sure to include SAVINGS. Not sure? Keep track for a few months – keep all of your receipts, credit/bank card statements, ATM receipts, etc. Find a way that works for you: - use your debit or credit card for all purchases (be careful!), - keep all your receipts in your wallet, - use software or a website like mint.com, or - keep track in phone/PDA as you spend money: There’s an app for that (BUDGT, GoodBudget, Best Budget) Make sure you don’t forget expenses that only come up once or twice a year: taxes, car insurance, Christmas and birthday gifts, health insurance, books, board fees, security deposits, etc.

6. Your Cost of Attendance Budget includes: • Tuition & fees: $47,118 for in-state, $57,726 for out-of-state • Health insurance: $2,640 ($2,445) • Books and supplies: $614 • Instruments: $600 • Living expenses: $1714/month for 10 months (August – May) • For example: $814 rent & utilities (including internet) • BUY RENTER’S INSURANCE! • $250 transportation • $300 food and household supplies • $50 savings • $300 personal & miscellaneous (clothes, recreation, copays, haircuts, gifts, pets, alcohol, etc)

7. Budgeting on Financial Aid • One rule: Live as cheaply as possible. Monitor your spending closely during the month – at least until being frugal is a habit! • If your personal expenses are less than your resources: • Great! Only borrow what you really need. • If you need more money later, you can always request more loans. • If your personal expenses are more than COA/your resources: • Look for creative resources: help/loans from your parents, tutoring, selling organs. • The best solution is to find a way to reduce your expenses. • Reducing your debt now will allow you more income later: • Spending an extra $200/month = $100/month for 10 years, costing you over $12,000 to repay. • Stretch your payments out to 25 years, that $200/month could cost you almost $18,000.

8. If you are borrowing, your budget will determine how much loan money you need to request. Add up all of your necessary expenses, then compare that to your resources. For example: Expenses: $57,726 tuition & fees $0 health insurance (on parent plan) $1000 books/supplies/instruments $700 misc (car taxes/insurance, gifts) Monthly costs (for 10 months): $500 rent $135 utilities (half of: $100 electricity, $30 phone, $80 cable/internet, $60 water) $200 groceries $50 household supplies $75 car insurance $50 gas $150 eating out $150 misc (recreation, clothes, copays, etc) $1,310 total/month x 10 months = $13,100 Total Expenses for the year: $72,526 Resources: $2000 from parents $5000 from grandparents $1000 outside scholarship $24,000 school scholarship $10,000 school loan $42,000 total resources so far This student can borrow up to $44,178 in loans. Should she?

9. Building a non-aid budget If you are not on financial aid and have a fixed amount of income, you should take the sum of your resources, subtract your fixed costs, and what’s left is discretionary: recreation, personal/miscellaneous, etc. Example: Student is married and someone’s parents are paying tuition. Spouse’s take-home: $2700/month (after taxes, health insurance, etc) Fixed expenses: $100 savings $1200 rent $330 utilities ($100 electric, $50 water, $130 phone/internet, $50 cable) $250 car payment $90 car insurance $150 gas/maintenance $250 groceries $75 household supplies $150 non-monthly expenses $2595 This leaves $105/month for discretionary spending – is that enough?

10. Real World Budgeting • Remember the debt-to-income guidelines • 28% maximum for housing (including taxes and insurance) • 36% max overall • $100,000 income = $670/month in other debts • Large student loans will increase your overall DTI • Take your projected debt to www.finaid.org and figure out what your monthly payments are going to be • Eliminate debt asap • Two methods: highest-rate first, snowball • Have a plan for raises and bonuses: savings, debt, or plan of thirds • Pay yourself first • Choose an amount and make it automatic

11. Saving Pay yourself first! It never works to just “save what’s left.” Students should always have a small emergency fund in case unexpected expenses come up. Plan ahead: health insurance, boards, travel, 4th-year interviewing expenses and relocation costs. Make sure to plan for the summer! In the “real world” you need AT LEAST four types of savings: • Emergency fund (at least 3-6 months of living expenses) • Regular savings (travel, repairs, appliances, toys, etc) • Retirement • The get-rich money You may also need college savings or other goal-oriented savings (house, wedding, kids, car, caring for family members, etc). Do these BEFORE investing.

12. Savings and Banking Keep savings separate to protect the money from yourself. Don’t settle for the interest rates offered by your local bank! • The UVA Credit Uniongenerally has better rates than banks • Online-only accounts may have even better rates (Capital One, ING, Discover) – still currently under 1% • Look into any organization that you belong to – USAA, a credit union, ask your parents! Don’t pay fees: avoid monthly maintenance fees, ATM fees, debit card fees (the UVA credit union doesn’t charge one), overdraft fees, and returned check fees

13. Okay, I have a budget. Now what? • Stick to it! Especially when you first start living on a budget, keep track of your expenses carefully. Check weekly to see how you’re doing. Use mint.com, an app, receipts, a spreadsheet – whatever works for you. • Tell your friends! It’s very hard to live on a budget without help from friends and family. • Organize low-cost activities with your friends • Participate in meal-sharing with your roommates • Don’t panic! If you overspend one month, look for ways to save money and get back on track the next month.

14. The Psychology of Budgeting • Beware of “keeping up with the Joneses” • Remember, the Joneses are broke. • This problem will get worse when you’re a doctor • Don’t be overly optimistic • Watch your language. Getting a good deal is not “saving” money. • Find a way to trick yourself into (real) saving: • Deposit savings automatically • Save your change • Save what you get from coupons • Set savings goals

15. More Psychology • Be realistic about needs vs. wants • Establish a waiting period • Mentally double the price of everything you buy • If you’re buying using loan money, that’s the true price • You’re busy: pay bills automatically • Avoid late fees, just balance your checkbook • Routine is your friend • Studies show that using plastic makes you spend more • Think of your budget in positive terms: it lets you spend your money on what you want and avoid unnecessary debt • Saying “no” now means you can say “yes” later

16. Living Cheaply in Cville • Housing: share rent with as many people as you can stand, or just live at the library • Do NOT forfeit your security deposit • Utilities: always attempt to negotiate with telecommunications companies, ask about discounts (student, UVA) • Banking: check out the UVA Credit Union • Transportation: use UVA buses, free transfer to Charlottesville city buses – avoid paying for gas • Ask for student discounts everywhere

17. Local grocery tips Harris Teeter • 5% student discount – link your student ID to your VIC card • Double coupons up to 99 cents • Circular in store, Wednesday Daily Progress, or www.harristeeter.com Kroger • Circular in store, Wednesday paper, or www.kroger.com • Coupons redeemed at face value Giant • Circular in store, Wednesdaypaper (effective Friday), or www.giantfood.com • Double coupons up to 99 cents Food Lion • Circular in store, Wednesdaypaper, or www.foodlion.com • Coupons redeemed at face value

18. Local household expense tips • K-Mart • Circular in store and in the Sunday paper • Wal-Mart • Sam’s Club • $40 annual membership fee (can be used by two people!), a Collegiate membership gets you a free $15 gift card • Refer a friend, and you each get a $10 gift card! • Target • Bed Bath & Beyond • Coupons: Sign up at www.bedbathandbeyond.com • Big Lots • Circular in Wednesday or Thursday paper

19. Saving on Splurges • Gotta have local/organic/fresh produce? • BellairFarm Community Supported Agriculture, Local Food Hub, Relay Foods – find coupons and share memberships • Need new dress clothes? • Goodwill and Salvation Army have great finds, and the money goes to a good cause. Lots of consignment shops too. • Like fine wine? • Local wineries offer free tastings, and local wine shops like Wine Warehouse can find you great bottles on a budget. • Night on the town? • Pick a bar/restaurant with specials, go during happy hour, and/or drink at a friend’s house!

20. Local food/drink deals These deals change constantly! Ask your favorite bartender, and go during happy hour if possible. Or drink at home! Sites to check: www.findmespecials.com, www.gotime.com/charlottesville

21. Other tips • Ask about student discounts and discount cards everywhere. • Don’t be loyal. Shop around for banks, credit cards, insurance, utilities, etc. Call periodically and threaten to cancel your service. • Get a credit card that gives you cash back or points, and auto-pay your utilities with that card. • Live without cable – everything is online. • Talk to the 4th-years! • Websites to check out: • www.frugalliving.tv – specifically, www.frugalliving.tv/free-stuff/birthday-freebies.html for birthday freebies • Mom sites are great for tips and coupons: www.momsneedtoknow.com and www.moneysavingmom.com • Slickdeals.net (especially for online shopping and tech stuff) • Amazon: Subscribe & Save, buy gift cards at Kroger to get Kroger points

22. Other tips • Free entertainment in Charlottesville: • Fridays after 5:00 – free concerts during warm weather months • Final Fridays – free art shows, refreshments • Local attractions: historic sites, vineyards/breweries, orchards, museums • Outdoors: hiking trails, parks, natural areas • Make use of your resources as a student • $3 movies at Cinematheque (Newcomb Hall basement) • Free recreational facilities, football games • Cheap/free entertainment: Rotunda Sing, Tom Deluca, speakers, comedy shows, improv, music, art shows • Check the UVA student calendar and find the University Programs Council on Facebook or their website: www.student.virginia.edu/upc • Free movie rentals at UVA libraries (and local libraries) • Student Health • Share tips with your fellow students

23. The Financial Aid Office • We have an open-door policy – feel free to drop by anytime with questions or concerns. We can help with: • making a budget • debt management • figuring out how much loan money to take out • financial decisions (for example, using savings vs. taking out loans) • financial emergencies Dennis (A-H) Margaret (I-R)