Financial Wellness Curriculum The Budgeting Process

1. Financial Wellness Curriculum The Budgeting Process

2. Financial Wellness Curriculum The Budgeting Process More information available at YouCanDealWithIt.com. THIS PRESENTATION HAS BEEN DEVELOPED BY AND PAID FOR BY PHEAA. The information contained herein is believed to be accurate at the time of printing. Due to the rapidly changing nature of the law and the industry, information contained in this document may become outdated, and PHEAA/AES does not guarantee the accuracy of the information herein. You should verify that this information is correct. Any Stafford or PLUS loan first disbursed on or after July 1, 2010 must be obtained directly from the federal government through the Federal Direct Loan Program (FDLP). Please contact the financial aid office at your school for additional information.

3. Objectives • Budgeting Misconceptions and Truths • The Budgeting Process • Goals • Income • Expenses • Create a Budget

4. Budgeting Misconceptions • A budget won’t allow me to enjoy life or spend money on “fun” things. • It’s unrealistic and restricting. • Budgets are “set in stone.”

5. The Truths About Budgeting Budgeting… • Is a necessary part of managing your money • Enables financial independence • Helps to manage and prevent debt • Prepares you for the future by balancing spending and savings • Enables you to plan ahead for big purchases

6. The Budgeting Process Three Steps • Goals---What you want • Income---How much money you earn • Expenses---How much money you spend

7. The Budgeting Process: Goals What are your goals? • Short Term • 3 months to 1 year • Long Term • 2--5 years or longer

8. The Budgeting Process: Income Sources of Income • Graduation money • New job • Second job or part-time job Determine how much money you have saved. Determine how much you expect to earn.

9. The Budgeting Process: Expenses Where does your money go? • Rent/mortgage • Taxes, insurance, medical • Food • Utilities, cell phone, etc. • Transportation (car, gas, bus, train) • Student loan payment • Clothing • Entertainment • Investments • Day care • Credit cards and other debt

10. The Budgeting Process: Expenses Evaluate and Track Your Spending • Do you run out of money before the weekend? • Do you know where the money went?

11. Create a Budget Think “spending plan,” not “budget.” • Gather the information you need (income and expenses). • Pay stubs • ATM receipts • Bills • Expense tracker • Etc. • Consider savings an expense and figure out how much you need to save to reach your short-term and long-term goals. A budget lets you have more control!

12. Create a Budget Use the YouCanDealWithIt.com budget calculator.

13. Create a Budget Budgeting 101: A day in your life---What to eat and where Eating Out • Café latte, muffin ($6) • Cheese steak, bottled water ($10) • Drive-thru meal ($8) Total: $24 Price per meal: $8 Eating In • Trip to the grocery store ($105 for the week) • Sample menu for 1 day: • Muffin/coffee • Sandwich and water • Pasta with sauce and salad Average per day: $15 Average price per meal: $5 Annual savings: $3,285

14. Objectives • Budgeting Misconceptions and Truths • The Budgeting Process • Goals • Income • Expenses • Create a Budget

15. Questions? Comments?