1. Copyright, 1996 © Dale Carnegie & Associates, Inc. COLLEGE STUDENT BUDGET

2. OUT OF CASH Experience can be a dear teacher when it comes to overspending at college. Many students discover, at the most inconvenient and embarrassing times, that their expenses have exceeded their income -- they are out of cash! The question is what to do. Call home? Borrow from the roommate? Both are short term solutions at best. A better solution is to design a budget using the worksheet Budget for college spending and take control of the cash flow.

3. COLLEGE BUDGETING 101 The primary purpose of a budget is to design a realistic plan for spending limited financial resources. A student budget requires flexibility to adapt to the changing circumstances of college life. Essential steps in designing a budget are: Identify your income sources. Income can include your allowance from home, take-home pay from student employment, savings allocated to college expenses, interest, dividends, gifts, grants, scholarships.

4. More Facts Review and modify the plan. If expenses exceed income identify ways to increase income or reduce expenses. This is not rocket science, but doing it right is terribly important to your economic well-being at college. List fixed and flexible expenses. Fixed expenses are exact amounts due on a specific date. Flexible expenses include money spent on wants and needs that are irregular in nature.

5. Peer Pressure Peer pressure and conveniences such as automatic teller machines can play havoc with student budgets, because ready cash makes it easy to buy things on a whim. A budget can help you sidestep impulse spending. It puts you in control of the decision to buy or not to buy, based on your needs and available cash.

6. Budget Format The time period of a student budget can be a month, a semester, or the school year. After listing all income, estimate how much money you will spend on the fixed and flexible items in your budget. Fixed items are a constant and easily defined. Flexible expenses are more difficult to identify because of their changing nature. Keep a daily record of your expenditures for a few weeks to better estimate the kind and amounts of your flexible expenses.

7. Fixed Expenses College room and board -- dormitory meal plan or off-campus housing Car payment and insurance, if you have a car Health insurance, if not covered by parent's policy Tuition, a fixed expense, may vary depending on course load Other fixed expenses, such an emergency fund and other saving

8. Flexible Expenses Books, lab fees, equipment, supplies, tutoring, etc. Snacks, drinks, groceries, restaurant meals Telephone bills, including long distance calls Social and recreation expenses -- such as movies, sporting events

9. More Flexible Expenses Transportation -- plane, train, bus, cabs, car maintenance, and parking Personal expenses -- toiletries, haircuts, laundry Clothing -- new purchases, dry cleaning Health Care -- prescriptions, doctor or dentist fees Other expenses -- such as dues and gifts

10. SPENDING PLAN A spending plan can encourage students to be careful money managers: identify income, including allowances and gifts set goals based on needs and wants determine expenses, both fixed and flexible develop a spending plan revise the spending plan as needed

11. Credit Cards & College Students You will have access to credit cards as a college student. While credit cards are useful when used appropriately, the temptation to overspend can lead to expenses that could destroy your budget as well as your financial independence. Students sometimes wisely use credit cards to pay for unexpected expenses such as medical emergencies, with the full understanding that it costs money to borrow money if the credit card balance is not paid in full each month.

12. More Facts Your credit record begins when you establish credit in your name, and a history of repayment is recorded by credit reporting agencies. Your credit rating follows you wherever you go, and a bad credit rating can affect your ability to get a job or buy a car or house.

13. Tips for College Students Set a credit card limit and stick to it. When possible, pay off credit card balances each month. If you pay only the minimum balance on credit cards each month, you will pay interest on the use of the money, and it will take time to pay off the total debt.

14. More Tips Comparison shop for credit cards. On credit applications, compare the annual percentage rate (APR) including finance charges, methods used to compute charges, the grace period, annual fees, penalties for late payments and other charges.

15. More Tips Your credit limit may increase when you pay your bills on time. To avoid overspending, make buying decisions based on a careful analysis of your financial condition rather than on the credit limit on your credit cards.

16. DISCUSSION QUESTIONS 1. Explain the advantages of a college student using a budget. 2. What are the steps that you would use to design a budget for your situation? 3. What are your options if your expenses are greater than your income? 4. Suggest uses of a credit card that are appropriate for college students.

17. ACTIVITY Budget this: You received $200/mo. from your parents for extra expenses, and you earn $50 a week working at the student book store. This adds up to $400/mo. to live off of. You live on campus and your room and board has already been taken care of with scholarships and federal funding. You are still covered by your parent’s health insurance. However, you do drive a car and have a social life, which incur extra expenses every month. You also are responsible for paying your own cell phone bill.

18. ACTIVITY Follow the following prompts to see where your money goes every month.

19. ACTIVITY Day 1: You didn’t have time to eat at the cafeteria between your classes and work so you stopped at Subway for lunch. Your total came to $5.35 You had to drive across town to renew your license at the DMV, but you had no gas. You only filled up to ½ a tank, but it ended being $20.

20. ACTIVITY Day 2: You stopped at Target to get some toiletries: soap, shampoo/conditioner, tooth paste, make up, toilet paper, face wash, etc. $35.00

21. ACTIVITY Day 3: You never left campus but you stopped at the on- campus convenience store to get a pop and a snack. This is not a part of your meal plan. $3.50

22. ACTIVITY Day 4: You need to have some groceries and snacks in your dorm room for when you are in a bind. You buy the basics: bread, lunchmeat, peanut butter, Raamen Noodles, cereal, milk, chips. You also decided that you needed some soda and energy drinks to have on hand. $30.00

23. ACTIVITY Day 5: A credit card sets up in the student union. You decide to get the credit card because they offer a free t-shirt to anyone who signs up. Also, if you spend $50 online within the first 24 hours of opening the card, you will receive a $10 cash back bonus. You decide you could use a new pair of jeans and a nice shirt from the Buckle and buy online that night. $100 is put on your new credit card (this does not come straight out of your checking account – but you will eventually have to begin making payments on it)

24. ACTIVITY Day 6: You stayed up the night before doing homework so you buy a coffee at the coffee shop on campus. $3.50

25. ACTIVITY Day 7: You are busy with class, studying and work, but you meet friends for a quick lunch and dinner in the school cafeteria. You have a meal plan so you did not spend money all day! High five!

26. ACTIVITY Day 8: You have been so busy with everything that you decide you need a break from homework for one night. You go to a movie with your friends. You get a soda and popcorn, as well. $20.00

27. ACTIVITY Day 9: You stay home all day and study. You eat from the groceries you bought at the store last week. Another day of no spending – woohoo!

28. ACTIVITY Day 10: You have to take your car in for an oil change. You are almost out of gas again, too. Gas: $20 (1/2 tank) Oil Change: $24.95 special!

29. ACTIVITY Day 11: You realize that you have been spending a lot lately – you decide to try to not spend money again.

30. ACTIVITY Day 12: No spending again – you are smart!

31. ACTIVITY Day 13: You and some friends decide to go out to dinner to celebrate your performance on a difficult test. $20.00

32. ACTIVITY Day 14: No Spending. YES!

33. ACTIVITY Day 15: Subway run. $5.35

34. ACTIVITY Day 16: Your cell phone bill came. $100

35. ACTIVITY Day 17: No spending. Woot.

36. ACTIVITY Day 18: You were in a hurry to hand in an assignment and had to park illegally on campus. $20

37. ACTIVITY Day 19: Classes and homework took up all of your time. You made do with what you had! No spending!

38. ACTIVITY Day 20: Your credit card bill arrives. $20 minimum payment.

39. ACTIVITY Day 21: You want to go to an out-of-town football game. You have to drive because your friend’s car is broken down but they agreed to pay you for ½ of the gas. You pay $25

40. ACTIVITY Day 22: You are out of town and have to spend money on food. Breakfast, Lunch, Dinner, Breakfast. $30

41. ACTIVITY Day 23: You get back to town and you are out of gas. You have a doctor’s appointment after class and will have to drive there. You also have to pay your $25 co-pay. Gas - $20 Co-Pay $25

42. ACTIVITY Day 24: You need to get groceries again. $25

43. ACTIVITY Day 25: It’s your mom’s birthday – you take her out to dinner: Applebee’s 2 for $20 and you tell your mom she has to get ice water. $26.00 (including tax and tip)

44. ACTIVITY Day 26: No spendy-spendy.

45. ACTIVITY Day 27: You left your coat at the out of town football game. Time to get a new one – it’s cold! $40

46. ACTIVITY Day 28: No spending.

47. ACTIVITY Day 29: No Spending.

48. ACTIVITY Day 30: Budget. How did you end up?