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Budgeting for College: Money Wisdom Gary Moore, Andrea Morgan, Melissa Greenslade Program Coordinators University of Arkansas, Office of Financial Aid.

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Presentation on theme: "Budgeting for College: Money Wisdom Gary Moore, Andrea Morgan, Melissa Greenslade Program Coordinators University of Arkansas, Office of Financial Aid."— Presentation transcript:

1 Budgeting for College: Money Wisdom Gary Moore, Andrea Morgan, Melissa Greenslade Program Coordinators University of Arkansas, Office of Financial Aid

2 Budget: -A budget is a sum of money allocated for a particular purpose.

3 Income Financial Aid Refund Check Parental Contribution Savings On Campus or Off Campus Job ◦ Remember taxes—approx. 1/3 of gross wages

4 Need: -Necessary for a person to live a healthy life. -Needs are distinguished from wants because a deficiency would cause a clear negative outcome, such as dysfunction or death. Want: -Something that is desired. -There may be unlimited wants, but limited resources. As a result, one cannot have everything one wants and must look for the most affordable alternatives. vs.

5 -A duty or obligation to satisfactorily perform or complete a task. *You are responsible for paying the bills/debt that you incur for needs and wants. Responsibility: Bills Rent Utilities Tuition Books/Supplies Debt Incurred Credit card debt Pay back loans *plus interest and fees

6 Four Walls Housing (Shelter) ◦ On/Off Campus, Rent/Mortgage ◦ Roommates Food ◦ Groceries vs. Eating Out Utilities (Heat/Air) ◦ Water, Trash, Electricity, Gas ◦ Conserve, Recycle Clothing

7 Transportation ◦ Car Payment, Gas, Maintenance, Insurance ◦ Exercise Technology ◦ Internet, Cable, Cell Phone Medical Expenses ◦ Insurance/Out of Pocket ◦ Doctor Visits ◦ Medications Other Needs ?

8 Savings Emergency Fund ◦ $500-$1,000 6-month Emergency Fund Savings ◦ 10% of income ◦ Long-term goals?

9 Are you a Saver or a Spender? What would you do? You make $1200 a month Your monthly needs total: $600 Your monthly responsibilities total: $100 How much should you save? How much do you have for spending money?

10 How Much Time Will It Cost You? NOW: Work 20 hours/week Hourly Wage: $ hour of work after taxes = $4.84 Weekly Wages: $145 1 week of work after taxes = $97 $100 pair of jeans. It will cost you 21 hours of work. FUTURE: Salary: $32,000 Work 40 hours/week Weekly Wages earned: $615 ◦ After taxes: $410 Daily Wage: $ ◦ After taxes: $82.08 Student loan: $30,100 (10 years to repay) 4-6% interest: $47,520 Repayment: $82.50/wk It will cost you a little more than 1 day a week for 10 years.

11 Maximum Student Loans Suggested Source for starting salaries: 5/23/11 article of The Chronicle of Higher Education Don’t borrow more than you need! Profession Starting Salary Max Advised Loan* Law$53,500$42,800 *The maximum advised loan is based on the repayment over 10 years using approximately 8% of annual income Education$43,000$34,400 Psychology$41,000$32,800 Kinesiology$61,000$48,800 Business$62,500$42,000 Biology$56,000$44,800 Computers/Math$74,000$59,200 Engineering$87,500$70,000 Communications$48,000$38,400 Health$72,500$58,000

12 American Spending Habits Starbucks Entertainment Gas Clothes

13 Cautions about Credit Cards The $100 Pizza! For emergency vs. regular use Spending future income Interest costs Affects your future “Financial freedom is not determined by how much money you make. It is determined by how you use the money you have.”

14 Tools ◦ Budget Plan ◦ Checking account check registers ◦ ◦ Financial Literacy Seminars Tell your money where you want it to go rather than wondering where it went.

15 Budget Plan BUDGET PLAN Calculate your semester budget by entering your information in the charts below. Assumptions: A semester consists of 5 months FINANCIAL AID Per SemesterFinancial Aid RefundPer Semester Pell Grant$0.00Financial Aid Awards$0.00 AR Challenge/Other State Aid$0.00Tuition & Fees$0.00Subtract this amount Outside Scholarship A$0.00Housing (on campus)$0.00Subtract this amount Outside Scholarship B$0.00On Campus Meal Plan$0.00Subtract this amount Subsidized Loans$0.00RazorBucks$0.00Subtract this amount Unsubsidized Loans$0.00*Refund Check Amount$0.00 Other Aid (do not include FWS)$0.00*(Find this amount in ISIS under Student Bill) TOTAL AWARDS $0.00 JOBSPay Rate# of Hours per WeekWeekly PayBi-weekly PayMonthly PaySemester Total On or Off Campus Job (include FWS)$0.000 TOTAL$0.000 IncomePer MonthPer SemesterNotesTOTAL Financial Aid$0.00 On or Off Campus Job(s)$0.00 Parent Contribution$0.00 TOTAL$0.00 ExpensesPer MonthPer SemesterNotesTOTAL Housing (off campus)$0.00 Utilities (electric, gas, water, trash)$0.00 Food/Groceries$0.00 Transportation(car pymt, insurance, gas)$0.00 Text Books/School Supplies$0.00 Medical/Dental$0.00 Internet, Cable, Cell Phone$0.00 Debt Repayment (loans, credit cards)$0.00 For Emergencies (10% of income)$0.00 Clothing/Gifts$0.00 Entertainment$0.00 Other$0.00 TOTAL$0.00 Net Discretionary Funds Per Semester $0.00

16 Budget Plan: Financial Aid Assumptions: A semester consists of 5 months FINANCIAL AID Per SemesterFinancial Aid RefundPer Semester Pell Grant$0.00Financial Aid Awards$0.00 AR Challenge/Other State Aid$0.00Tuition & Fees$0.00Subtract this amount Outside Scholarship A$0.00Housing (on campus)$0.00Subtract this amount Outside Scholarship B$0.00On Campus Meal Plan$0.00Subtract this amount Subsidized Loans$0.00RazorBucks$0.00Subtract this amount Unsubsidized Loans$0.00*Refund Check Amount$0.00 Other Aid (do not include FWS)$0.00*(Find this amount in ISIS under Student Bill) TOTAL AWARDS $0.00

17 Budget Plan: Income JOBSPay Rate# of Hours per WeekWeekly PayBi-weekly PayMonthly PaySemester Total On or Off Campus Job (include FWS)$0.000 TOTAL$0.000 IncomePer MonthPer SemesterNotesTOTAL Financial Aid$0.00 On or Off Campus Job(s)$0.00 Parent Contribution$0.00 TOTAL$0.00

18 Ideas for Generating Income Work-study, On-campus Jobs ◦ https://jobs.uark.edu/applicants/jsp/shared/Welcome_css.jsp https://jobs.uark.edu/applicants/jsp/shared/Welcome_css.jsp Off-campus Jobs ◦ Babysit/Pet Sit/House Sit/Personal Assistant ◦ Tutoring, Translating Research Participation ◦ Sell Textbooks, Electronics, etc. ◦ Craigslist, eBay, Amazon.com ◦ Garage Sale

19 Budget Plan: Expenses On campus vs. off-campus housing/food/RazorBucks ExpensesPer MonthPer SemesterNotesTOTAL Housing (off campus)$0.00 Utilities (electric, gas, water, trash)$0.00 Food/Groceries$0.00 Transportation (Car pymt, insurance, gas)$0.00 Text Books/School Supplies$0.00 Medical/Dental$0.00 Internet, Cable, Cell Phone$0.00 Debt Repayment (loans, credit cards)$0.00 For Emergencies (10% of income)$0.00 Clothing/Gifts$0.00 Entertainment$0.00 Other$0.00 TOTAL$0.00 Net Discretionary Funds Per Semester $0.00

20 Spending and Saving Tips Coupons/Discounts, Sales/Specials Groceries vs. Eating Out Buy Used; Textbook Rental Program Exercise vs. Car Expenses Free Events and Entertainment Give yourself an allowance Leave your credit/debit card at home Ask, “Do I really need this?” Remember the cost of credit

21 Examples Spring Break! ◦ Income; Housing; Food; Transportation; Entertainment Interactive Budget Plan

22 7 Things a Budget Can Do for You! 1. Know what is going on 2. Control 3. Organization 4. Communication 5. Take advantage of opportunities 6. Extra time 7. Extra money

23 Before you go… Evaluation Forms PowerPoint and Budget Plan are posted on our website

24 Thank You Contact Information: ◦ Office of Financial Aid: Andrea, Gary, or Melissa ◦ Campus location: 114 Silas Hunt Hall ◦ Phone: ◦ Fax: ◦ Website: ◦ And find us on Facebook at University of Arkansas Financial Aid!


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