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Budgeting for College: Money Wisdom

Budgeting for College: Money Wisdom. Gary Moore, Andrea Morgan, Melissa Greenslade Program Coordinators University of Arkansas, Office of Financial Aid. Budget :. -A budget is a sum of money allocated for a particular purpose. Income. Financial Aid Refund Check Parental Contribution

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Budgeting for College: Money Wisdom

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  1. Budgeting for College: Money Wisdom Gary Moore, Andrea Morgan, Melissa Greenslade Program Coordinators University of Arkansas, Office of Financial Aid

  2. Budget: -A budget is a sum of money allocated for a particular purpose.

  3. Income • Financial Aid Refund Check • Parental Contribution • Savings • On Campus or Off Campus Job • Remember taxes—approx. 1/3 of gross wages

  4. Need: -Necessary for a person to live a healthy life. -Needs are distinguished from wants because a deficiency would cause a clear negative outcome, such as dysfunction or death. vs. Want: -Something that is desired. -There may be unlimited wants, but limited resources. As a result, one cannot have everything one wants and must look for the most affordable alternatives.

  5. -A duty or obligation to satisfactorily perform or complete a task. *You are responsible for paying the bills/debt that you incur for needs and wants. Responsibility:

  6. Four Walls • Housing (Shelter) • On/Off Campus, Rent/Mortgage • Roommates • Food • Groceries vs. Eating Out • Utilities (Heat/Air) • Water, Trash, Electricity, Gas • Conserve, Recycle • Clothing

  7. Other Needs ? • Transportation • Car Payment, Gas, Maintenance, Insurance • Exercise • Technology • Internet, Cable, Cell Phone • Medical Expenses • Insurance/Out of Pocket • Doctor Visits • Medications

  8. Savings • Emergency Fund • $500-$1,000 • 6-month Emergency Fund • Savings • 10% of income • Long-term goals?

  9. Are you a Saver or a Spender? What would you do? You make $1200 a month Your monthly needs total: $600 Your monthly responsibilities total: $100 How much should you save? How much do you have for spending money?

  10. How Much Time Will It Cost You? NOW: • Work 20 hours/week • Hourly Wage: $7.25 • 1 hour of work after taxes = $4.84 • Weekly Wages: $145 • 1 week of work after taxes = $97 $100 pair of jeans. It will cost you 21 hours of work. FUTURE: • Salary: $32,000 • Work 40 hours/week • Weekly Wages earned: $615 • After taxes: $410 • Daily Wage: $123.04 • After taxes: $82.08 Student loan: $30,100 (10 years to repay) 4-6% interest: $47,520 Repayment: $82.50/wk It will cost you a little more than 1 day a week for 10 years.

  11. Maximum Student Loans Suggested Source for starting salaries: 5/23/11 article of The Chronicle of Higher Education Don’t borrow more than you need!

  12. American Spending Habits • Starbucks • Entertainment • Gas • Clothes

  13. Cautions about Credit Cards • The $100 Pizza! • For emergency vs. regular use • Spending future income • Interest costs • Affects your future “Financial freedom is not determined by how much money you make. It is determined by how you use the money you have.”

  14. Tell your money where you want it to go rather than wondering where it went. Tools • Budget Plan • Checking account check registers • www.feedthepig.org • Financial Literacy Seminars

  15. Budget Plan

  16. Budget Plan: Financial Aid

  17. Budget Plan: Income

  18. Ideas for Generating Income • Work-study, On-campus Jobs • https://jobs.uark.edu/applicants/jsp/shared/Welcome_css.jsp • Off-campus Jobs • Babysit/Pet Sit/House Sit/Personal Assistant • Tutoring, Translating • Research Participation • http://vpred.uark.edu/184.php • Sell Textbooks, Electronics, etc. • Craigslist, eBay, Amazon.com • Garage Sale

  19. Budget Plan: Expenses • On campus vs. off-campus housing/food/RazorBucks

  20. Spending and Saving Tips • Coupons/Discounts, Sales/Specials • Groceries vs. Eating Out • Buy Used; Textbook Rental Program • Exercise vs. Car Expenses • Free Events and Entertainment • Give yourself an allowance • Leave your credit/debit card at home • Ask, “Do I really need this?” • Remember the cost of credit

  21. Examples • Spring Break! • Income; Housing; Food; Transportation; Entertainment • Interactive Budget Plan

  22. 7 Things a BudgetCan Do for You! • Know what is going on • Control • Organization • Communication • Take advantage of opportunities • Extra time • Extra money

  23. Before you go… • Evaluation Forms • PowerPoint and Budget Plan are posted on our website

  24. Thank You • Contact Information: • Office of Financial Aid: Andrea, Gary, or Melissa • Campus location: 114 Silas Hunt Hall • Phone: 479-575-3806 • Fax: 479-575-7790 • Website: http://finaid.uark.edu/ • And find us on Facebook at University of Arkansas Financial Aid!

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