College Budgeting

1. Becoming financially independent College Budgeting

2. Financial Literacy • “The ability to make informed judgments and to take effective actions regarding the current and future use and management of money. It includes the ability to understand financial choices, plan for the future, spend wisely, and manage the challenges associated with life events such as a job loss, saving for retirement, or paying for a child’s education.” - NFEC • Knowing how to invest in your future well-being

4. Results • Q1: Varied, no significant pattern • Gap that may be hard to perceive and service • Q2: Varied, no significant pattern • Gap that may be hard to perceive and service • Q3: Significant results • 82.5% responded with 4 or 5 • Majority of students want Lawrence Tech to provide financial education • Q4: Varied responses • Financial seminars, campus jobs, more scholarships

5. Budgeting • An estimate of the balance between income and expenses over a specific period of time • Income: parents, student job, gift, loan, grant, scholarship, bridge card, etc. • Expenses: tuition, housing, food, gas, clothing, utilities, car loan, mortgage, credit card, etc. • Written/typed budgets become essential to financial health as you take on more types of incomes and expenses

6. Budgeting Priorities • 1. Immediate basic necessities (food, clothing, shelter) • 2. Emergency fund (or some financial safety net) • 3. Monthly payments (insurance, credit card, other payments that have penalties if missed) • 4. Education • 5. Credit card payoff plan • 6. Enjoy yourself – entertainment, hobbies, smart phone, etc. • 7. If you have enough left, get rid of debts

7. Food • Meal Plan • Only covers a fraction of what you need • NEVER pay for the RFOC in cash • Eat out (Only occasionally) • Gas + Expensive, unhealthy food = bad idea • Simple processed meals (Cheap and fast) • Ramen, Mac & cheese, TV dinners, etc. • Meals from fresh, whole ingredients (Cheapest and healthiest) • Use campus shuttle to Meijer • Make meals with roommates • Make giant proportions on a day and eat the rest of the week • Use coupons

8. Emergency Expenses • These are not accounted for in monthly budget • Accidents happen • Car repairs, medical expenses, sick pet, clothes for new job, theft • Fill gap until you receive insurance payout • Have a safety net • You should put money away in an Emergency Fund • ONLY for emergencies • Deposit monthly into a savings account • Should have $1000 at least

9. Insurance • Stay on parent’s health insurance plan • Check with school about what they offer • Any experiences you care to share?

10. Credit Cards • Have a credit card, but use it sparingly • Build credit • Credit cards are high-interest loans • Typically 10-20% interest rate • Never miss a payment! • Hurts your credit score -> premium increases, loan approval problems • Pay it off ASAP! • Best investment you can make (compare to high-return, high-risk investments like stocks with average 14% return rate)

11. University Expenses • Tuition, housing, textbooks, course-specific materials • Paid at beginning of semester • Out of pocket • Loans • Scholarships • Grants

12. Textbooks • Amazon.com • Resell at almost the same price • Can be risky • Rent • Much cheaper than initial cost of buying • No risk, but avoid late fees! • Share • Some classes barely use their textbooks – do research, ask around • Find a friend to pitch in

13. Student Loans • Know your loans • Principal • Interest Rate (typically 3-7%) • Grace Period • Lower your principal if you can • Make payments towards the loan with highest amount of interest accruing • Pay off the loan with the highest interest rate first • This will decrease the amount you pay in the long-run • If you can’t, don’t worry! • You don’t need to pay until grace period ends

14. Scholarships and Grants • FREE MONEY • Scholarships are merit-based • Lawrence Tech gives about 30% of tuition back to students • There IS a scholarship out there for you • Athletics, academics, volunteer service, writing, chance • Go to Career Services or the Office of Financial Aid to find out more • Grants are need-based • Awarded based on FAFSA

15. Car • Buy a safe, reasonable car • Cars are never good investments – they instantly depreciate in value • Get one with good gas mileage • If living on campus, don’t drive to class • Find cheapest gas • GasBuddy, other apps • Drive safely and minimize your insurance payments • Don’t speed down 10 mile

16. Cell Phone • Smart phones are not a need • The phones themselves and data are very expensive • Get a limited data plan • Only use data when necessary, otherwise use wi-fi • Get a family plan if you can and split the cost

17. Entertainment • Internet vs. Movie Theater • $9/mo unlimited vs. $9 per movie • Stay in shape and have fun at the field house • Join a club/greek life

18. Let’s make a budget!

19. Budgeting Priorities • 1. Immediate basic necessities (food, clothing, shelter) • 2. Emergency fund (or some financial safety net) • 3. Monthly payments (insurance, credit card, other payments that have penalties if missed) • 4. Education • 5. Credit card payoff plan • 6. Enjoy yourself – entertainment, hobbies, cell phone, etc. • 7. If you have enough left, get rid of debts

20. Student Jobs • Everyone should have one • Beginning to know how to provide for yourself • Extra money to improve life • Work ethic • Friendships • Internships/Co-ops • Career Services center • On-campus jobs (limited) • Off-campus jobs • Don’t waste your days at Wendy’s

21. Questions?