1. BYOB Build 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…. 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

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 Guideline %Per GuidelineStudent AStudent B Housing – 40%$695$650$550 Food – 20%$348$308$300 Transport – 12%$208 $256 Health Care – 12%$208 Misc – 16%$280$275$245 Monthly Budget$1,739$1,649$1,559 *Tuition/Fees, Books/Supplies, USMLE have their own budget. COA = $17,390/ 10 months = $1,739 per month

8. What is $3 a day worth? Daily Cost$3.00 Monthly Cost$90.00 Months in Year12 Total Yearly Amount$1,080.00 Total borrowed after 4 years$4,320.00 Annual Interest Rate6.8% Interest after one year on first loan$266.00 Interest after four years on all four loans*$630.00 Interest during grace period*$147.00 Total owed at repayment$5,097.00 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 maintenance4 hours ◦ House cleaning4 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 14 th at Noon S255