WoodGreen Community Services: Financial Literacy

Topic: Budgeting

Presenter: Lindsay Newton

Welcome Ryerson

Students!

PLEASE REMEMBER!!

Information provided by participants will be confidential. Feel free to discuss and share your experiences

Housekeeping items re: washroom facilities, prepare for a different kind of meeting process, room layout etc

Please fill out evaluation form

Please feel free to take medication or to eat/drink as required

Please respect other viewpoints

Disclaimer• The information provided are tips, suggestions

and options that can be utilized by individuals in order to enhance their financial literacy skills.

• WoodGreen is not responsible for any repercussions that may come about from an individual acting upon the information presented.

• This is information can be accessed by the general public and can be found on various validated websites.

Disclaimer

• The resources provided are for information purposes only, and WoodGreen does not endorse the external resources listed here.

• Reasonable efforts are made by WoodGreen to ensure these resources are accurate but WoodGreen is not liable for the content of these resources or any damages resulting from their use.

• This is information that can be accessed by the general public and can be found on various validated websites.

Financial Literacy Series:Tuesday March 3rd: OSAP 101

Wednesday March 4th: Budgeting

Monday March 9th: Banking

Wednesday March 11th: Tax 101

Location: Ryerson Student Centre - Thomas Lounge

ObjectivesBy the end of this workshop , you will:

• Understand concepts of income and expenses

• Have an understanding of where your money is going and a plan to better this understanding and plan for the future

• Have access to financial planning resources

• Identify ways to decrease spending

• Develop financial goals and set a budget to achieve goals

• Learn different ways to save money

Why learn about Financial Literacy?

• Knowing how to manage your money will protect you financially and help you reach your goals.

• Benefits of being more financially literate:– Control your financial future– Identify your financial goals and plan how you

will achieve them – Provide for yourself – Be a smarter consumer– Reduce stress!!

Exploring Our Relationship with Money Activity

One thing about money/budgeting/credit that I would like to learn more about is ______________________________________________________________________________________________________________________________________

The “B” Word- Budget Activity

Flipchart Paper:

What is a budget?

Why would you use a budget?

A budget is….

• An important step to financial security

• About choices – choosing how to make and spend money

• A spending plan help to control expenses (Moneywise)

• A summary of income (what you make) and expenses (what goes out) over certain period of time (CCFL)

• A tool that tells you how much money you have, how much you need and what you’re spending your money on (CCFL)

• A way to keep track of your money (FDIC)

Benefits of a budget? (FDIC)

• To be more aware of where money is being spent

• Find areas where you can spend less/ save more

• Take control of your finances – peer pressure still exists!

• Feel more confident

• Pay bills on time & avoid late penalties

• Reduce or pay off debt

• Save for financial goals!!

Budgeting

• Income and expenses should balance (be equal) or there should be money left over.

• Budget must remain realistic.

• If you cannot make a realistic, balanced budget, talk about the options for changing your personal situation.

Step 1: Keep Track of Daily Spending

Do you know where your money goes each month?

Have you ever had money and then spent it all?Do you remember exactly what you bought?

• Know where your money goes• Keep a personal spending diary• Keep all receipts in a envelope• Create a file for keeping income and expenses

Budgeting Resource

Budgeting Resource

Financial Consumer Agency of Canada

Various tools such as Budget Calculator, Financial Goal Calculator, Account selector,

etc.

Step 2: Income(FDIC)

Income comes in the form of:

• Job Employment • Earnings on savings and investments• Social assistance benefits• Disability benefits• Income support from immediate

family and relatives

Step 3: Expenses(FDIC)

Expenses: items you may pay for each month:

• Shelter• Food • Clothing• Transportation• Heat and Hydro (in some buildings)• Cable• Personal or pet care• Eating out • Entertainment• Medical Expenses• Memberships (gym, community center, programs)• Laundry

Step 3: Expenses

Know what you spend

• Keep every receipt• Record every expense in a notebook• Review bank and credit card statements

Do this for at least three months

• Then, make a list of irregular expenses (gifts, donations)

• Total your irregular expenses at the end of each month

Needs VS. Wants(FDIC;Moneywise)

• Needs: essential things – example: food, medication, transportation,

rent, cleaning service

• Wants: non-essential things – example: entertainment, cable, internet,

eating out

Needs VS. Wants(FDIC;Moneywise)

• Get into the habit of asking yourself if something is a need or a want

• There is nothing wrong with spending money on wants

• But it is important to learn to set spending priorities so you will have money for things you really need and want

Tip: Small behavior changes will result in big savings. It is important to know the difference between needs and wants

Needs VS. Wants

Be aware of why you spend: Questions to ask yourself

• When does a want become a need?• What motivates me to buy? (advertisements, friends,

trendy styles)• Does the urge to buy die the next day?• Do my purchases make me happier?• What can I learn to live without?

Try the 30 day test: write down a list of things you want, wait 30 days and recheck the list. Do you still want these things?

Needs VS. Wants

Share your own experience creating a budget!

Monthly Budget Example

Monthly Budget WorksheetIncome TotalPart-Time Job $

Income Support $

Scholarships/Bursaries $

OSAP $

Other income: $

Total monthly income (A) $

Monthly Budget WorksheetLiving Expenses Total Personal

ExpensesTotal

Food $ Entertainment $

Clothing $ Eating out $

Laundry $ Personal Grooming (eg haircuts)

$

Credit cards $ Newspaper $

Medical expenses $ Gifts/ donations

$

Pets $ Other: $Total Living expenses $ Total personal

expenses$

Total monthly expenses (Living, Personal, Transportation, Housing)

(B) $

Monthly Budget Worksheet

Overall Balance

Total monthly income (A) $

SUBTRACT total monthly expenses (B)

$

= (-) OVERSPENDING or (+) SAVING

$

Find info on budgeting in resources section

Step 4: Find Ways to Decrease Spending (FDIC)

Step 4: Find Ways to Decrease Spending (FDIC)

• Carrying little cash and controlling your credit card use

• Not shopping for recreation

• Remembering your savings goals

• Buying only what you need (what is a need again?)

• Paying your bills on time to avoid extra fees and interest charges

• Prioritizing wants and needs!

Stretching Your Dollar

• Eat at home and pack lunches

• Tips– Have staples on hand – onions, potatoes, commonly used

spices– Pick recipes that aren’t too complicated and time

consuming– Make sure you have the tools needed for the job

Stretching Your Dollar

• Check unit prices – consider an app:

• Shopare lets you record the price per unit of the same item at different stores

• Read weekly flyers using reebee from your phone

• And price match at discount grocery stores

• And buy the no name store brand

Stretching Your Dollar

• Take public transit or walk

• Reduce available credit on your credit card to protect from temptation!

• Avoid pay day loans and cash advances

• Check your bills for mistakes or over charges– Get errors corrected before it is too late

• Take advantage of student bonuses around Toronto!

Stretching your dollars• Bundling services pays!

Negotiate better plans for banking and services (bundle packages)– Call service providers and ask:

• If there are better deals or plans that they can offer you• What plan you are currently on and if you can bundle

servicesExample: • You pay $25/month for home phone, $30/month for internet and

$40/month for cable = $95.00

• Do you know that bundling discounts can save you?– Combining 2 services; save 5%– Combining 3 services; 10%

Save 10% of $95.00= $9.50

Frugal versus Cheap

• Some ideas from Mr Money Mustache:

– It’s (almost) all in your mind– Frugal does not mean owning lower quality items– Use Social Responsibility as a Guide– Physical fitness is a nice Substitute for style– Artsy-ness Makes Cheap Stuff Cool:– Choose Wise Friends, not Vacuous Consumer

Drones

Average cost # of times per week reduction

Weekly Savings Monthly Savings

Not eating out

Walking / transit instead of drivingHaving one less meal/ coffee/ tea out a weekBuying fewer: newpapers, lottery ticketsBorrowing movies from the library instead of buying themDoing laundry once a week or bi- weekly instead of every other day Other

Total: Total

Cutting back activity

Cutting back exercise cont

After calculating your weekly savings total write down what else you could

do with that money.

Step 5: Find Ways to Increase Income

• Ensure you are filing your taxes AND on time to get money back!

• Use certain tax credits that can help you increase your income (or pay fewer taxes so that you get more in your paycheck)

• Selling used items – you won’t look at the textbook again!

Budgeting Tools (FDIC;Moneywise)

These help you manage your budget:

• Daily spending diary – Mint has an app

• Monthly payment calendar

• Bank Account

These help you:• Record income in advance• Plan ahead to pay your bills

Daily Spending Diary (FDIC)

Watch Spending Closely

• Use a daily spending diary or log

• Record daily what you spend your money on

• Know where your money goes

• Cut expenses to save for goals

Bank Accounts

• A bank account is an important money management tool

• Helps you to keep track of your spending and how much money you have available

Benefits: • Money is safe• Each account is insured (up to $100k)• Confirmation of paid bills • Having the right bank account can save you money

Keeping a financial record

Pagers Shelf lifeBirth Certificate Keep for lifeSocial insurance card Keep for lifeMonthly bills with confirmation payment

Keep for one year

Receipts for major purchases Keep until warranty expiresMedical receipts Keep for at least a year (may be

able to use them for your tax return)

Bank books and statements Keep for at least a yearCredit card statements Keep for at least one year (may be

able to use them for your tax return)

Tax returns/ notice of assessment Keep for six years

Words of Wisdom

“Money in the bank is like toothpaste in the tube. Easy to take out, hard to put back”

-Earl Wilson

Financial Literacy Series:Tuesday March 3rd: OSAP 101

Wednesday March 4th: Budgeting

Monday March 9th: Banking

Wednesday March 11th: Tax 101

Location: Thomas Lounge

Thank Youfor your time!