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BYOB Build Your Own Budget

BYOB Build Your Own Budget. Build Your Own Budget. What is a budget? Spending guidelines Creating a realistic budget Budget S.O.S. group activity Making it stick Benefits of starting now Resources. Budgeting. What is a budget? Make the most of your financial resources

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BYOB Build Your Own Budget

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  1. BYOBBuild Your Own Budget

  2. Build Your Own Budget • What is a budget? • Spending guidelines • Creating a realistic budget • Budget S.O.S. group activity • Making it stick • Benefits of starting now • Resources

  3. 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

  4. Creating a Realistic Budget Three easy steps…. • List the income you expect and when you expect to receive it • Write down your expenses – keep a list as they occur • Add up the two columns and find a balance

  5. Cost of Attendance – 10 months • College Expenses under your control • Living expenses - $782 per month • Transportation - $303 per month • Personal stuff - $510 per month • College Expenses NOT under your control • Tuition and fees • USMLE exam fees and travel • Books and supplies (allowances by year) • M1=$2380, M2=$1020, M3=$930, M4=$560

  6. Spending Guidelines Source: U.S. Bureau of Labor and Statistics

  7. Budgeting the Cost of Attendance COA = $15,950 / 10 months = $1,595 per month *Tuition/Fees, Books/Supplies, USMLE have their own budget.

  8. What is $3 a day worth? Monthly loan payment $58.33 Total payments $7000 Total interest* $2680 *4 yrs school, 6 month grace, 10 year repayment

  9. Financial Aid Adjustments • Extra money? Return it! • You have 120 days from disbursement to return any portion of your loan without penalty (it’s in your promissory note) • Email me the details – I can specify which loan to return while you can’t • 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 • Fun money • Cell phone • “Miscellaneous” • Dry cleaning/Laundry

  11. “Personal finance is 20% head knowledge and 80% behavior.” • Dave Ramsey • author of “The Total Money Makeover”

  12. Budget SOS (Save On Spending) • Discuss budgeting pitfalls and saving tips in the following areas: • Food • Housing • Transportation • Entertainment • Personal • Designate a scribe for the group • Collection of tips will be posted to web

  13. 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

  14. Save on Housing – House vs. Apt • House Costs • Electricity and gas +$75 • Water, trash, sewer +$65 • Yard maintenance +$25 • Time Costs • Yard maintenance 4 hours • House cleaning 4 hours Total possible monthly savings: $165 Total time savings: 8 hours

  15. 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

  16. Save on Entertainment • Rent a DVD vs. going to a movie • Take a few bucks and leave your wallet at home • Take poor friends with you! • Volunteer for local events • Swap and share • Do you really need cable?

  17. Save on Banking • Free checking vs. “free” checking • Balance requirements, checks, etc. • Overdraft fees, bill paying fees, etc. • Convenience fees • Check card fees • Using other ATMs • Discounts and Services • Using multiple services • Automatic payments • Overdraft protection/Line of Credit

  18. Making Your Budget Stick • Have a plan and write it down • Eliminate temptations • Use Cash (or credit….) • Prioritize your spending • Reward yourself when you meet goals • Think long-term (remember 6.8%) • Find a system that works for YOU

  19. Benefits of Starting Now • Save money • Means fewer debt problems • Better prepared for future • Your borrowing from your future income • Learn new money tools • Take control of unknown • Be prepared • Reduce stress

  20. If you aim at nothing……. you’ll hit it every time.

  21. Online Resources • http://som.missouri.edu/financial/smartdocs/ • Office for Financial Success • AAMC : FIRST for Medical Education • Bankrate.com • www.kiplinger.com • Mint.com • www.daveramsey.com • www.suzeorman.com

  22. What’s next? Demystifying Credit November 4th at Noon M105

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