Welcome to the first seminar: presented by the Financial Aid Office and the Medical Alumni...
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Transcript of Welcome to the first seminar: presented by the Financial Aid Office and the Medical Alumni...
Welcome to the first
seminar:
presented by the Financial Aid Office
and the Medical Alumni Association
BUDGETING
How to build your budget
• Make a list of all of your resources
• Make a list of all of your expenses
• Software may help: MS Money, Quicken, Excel…
• Use a website like mint.com
• Build non-monthly expenses into your monthly plan
• Gifts, car maintenance, insurance, taxes, books, boards, etc
Resources
• Help from family: parents, grandparents, aunts, uncles, siblings
• Personal or spouse income
• Personal savings
• Scholarships:
• Need-based school scholarship (must qualify each year)
• Non-need-based scholarships (school and outside):www.finaid.orgwww.fastweb.com
Hampton Roads Community Foundation Beware of scholarship search sites that make you pay!
• Service-based scholarships
• Loans:
• Federal loans
• School loan (must qualify each year)
First, make a list of all of your resources for medical school.
Loans
School loan• Need-based, must qualify each year• No interest while in school or grace period• Fixed 5% interest, must pay INTEREST-ONLY during residency
Federal loans• Subsidized Loans
• 6.8% fixed interest rate• No interest while in school or grace period• $8500 maximum every year
• Unsubsidized Loans• 6.8% fixed interest rate• Interest starts accruing immediately after disbursement• Maximum listed in your financial aid award letter
• Graduate PLUS Loan – Loan of last resort• Not included on your award letter, you must contact your counselor• Can make up difference between aid and Cost of Attendance
Expenses
Make a list of all of your monthly and non-monthly expenses.
Make sure to include SAVINGS.
Not sure about your expenses? Keep track for a few months – keep all of your receipts, credit/bank card statements, ATM receipts, etc. Find a way that works for you: use your debit or credit card for all purchases (be careful!), keep all your receipts in your wallet, use a website like mint.com, or keep track in your PDA as you spend money.
Make sure you don’t forget expenses that only come up once or twice a year: taxes, car insurance, Christmas and birthday gifts, health insurance, books, board fees, security deposits, etc.
Your Cost of Attendance Budget includes:
• Tuition & fees: $41,489 for in-state, $51,161 for out-of-state for 11/12
• Health insurance: $2,326
• Books and supplies: $1,039
• Instruments: $914
• Living expenses: $1683/month for 10 months (August – June)
For example: $812 rent & utilities (including internet)
$255 transportation
$312 food and household supplies
$50 savings
$254 personal & miscellaneous (clothes, recreation, copays,
haircuts, gifts, pets, alcohol, etc)
Budgeting on Financial Aid
One rule: Live as cheaply as possible. Monitor your spending closely during the month – at least until being frugal is a habit!
If your personal expenses are less than the Cost of Attendance:• Great! Only borrow what you really need. • If you need more money later, you can always request more loans.
If your personal expenses are more than the Cost of Attendance:• Look for creative resources: money from your parents, a part-time
job, or family loans. • The best solution is to find a way to reduce your expenses. • Reducing your debt now will allow you more income later:
Spending an extra $200/month in school will increase your student loan payment by $110/month for 10 years after you graduate, and cost you over $13,000 to repay. If you stretch your payments out to 25 years, that $200/month could cost you $20,000.
Expenses: $51,161 tuition & fees
$0 health insurance (on parent plan)
$1000 books/supplies/instruments
$700 misc (car taxes/insurance, gifts)
Monthly costs (for 10 months):
$450 rent
$165 utilities (half of: $80 electricity,
$70 phone/DSL, $50 cable,
$30 water; and $50 cell phone)
$200 groceries
$50 household supplies
$75 car insurance
$50 gas
$150 eating out
$150 misc (recreation, clothes, copays, etc)
$1,290 total/month x 10 months = $12,900
Total Expenses for the year: $65,761
If you are borrowing, your budget will determine how much loan money you need to request. Add up all of your necessary expenses, then compare that to your resources. For example:
Resources:
$5000 from parents
$1000 from savings
$3000 outside scholarship
$8500 subsidized loan
$17,000 school scholarship
$10,000 school loan
$44,500 total resources so far
This student can borrow up to $33,772 in unsubsidized
loans. Should she?
Building a non-aid budget
If you are not on financial aid and have a fixed amount of income, you should take the sum of your resources, subtract your fixed costs, and what’s left is discretionary: recreation, personal/miscellaneous, etc.
Example:
Student is married and parents are paying tuition.
Spouse’s take-home: $2400/month (after taxes, health insurance, etc)
Fixed expenses: $100 savings
$900 rent
$300 utilities ($90 electric, $30 water/sewer, $130 Embarq, $50 cable)
$250 car payment
$90 car insurance
$150 gas/maintenance
$250 groceries
$75 household supplies
$150 non-monthly expenses
$2265
This leaves $135/month for discretionary
spending – is that enough?
Real World Budgeting• Pay yourself first
– Choose an amount and make it automatic
• Remember the debt-to-income guidelines– 28% maximum for housing (including taxes and insurance)
• $100,000 income = $2300/month max for housing
• In Charlottesville, that’s approximately a $300,000 house
– 36% max overall• $100,000 income = $670/month in other debts
– Large student loans will increase your overall DTI• Take your projected debt to www.finaid.org and figure out what your
monthly payments are going to be
• Eliminate debt asap– Two methods: highest-rate first, snowball
• Have a plan for raises and bonuses
Okay, I have a budget. Now what?
• Stick to it! Especially when you first start living on a budget, keep track of your expenses carefully. Check weekly to see how you’re doing.
• Tell your friends! It’s very hard to live on a budget without help from friends and family.– Organize low-cost activities with your friends– Participate in meal-sharing with your roommates
• Don’t panic! If you overspend one month, look for ways to save money and get back on track the next month.
The Psychology of Budgeting• Beware of “keeping up with the Joneses”
– Remember, the Joneses are broke.
– This problem will get worse when you’re a doctor
• Don’t be overly optimistic
• Be realistic about needs vs. wants– Establish a waiting period
• Watch your language. Getting a good deal is not “saving” money.
• Find a way to trick yourself into (real) saving:– Deposit savings automatically
– Save your change
– Save what you get from coupons
SavingPay yourself first! It never works to just “save what’s left.”Students should always have either a small emergency
fund, or financial aid available, in case unexpected expenses come up.
Students need to plan for the summer!
In the “real world,” you need at least four types of savings:– “Life happens”– Emergency fund (at least 3-6 months of living expenses)– Retirement– The get-rich money
You may also need college savings or other goal-oriented savings (kids, house, car, caring for family members, etc).
BankingDon’t settle for the interest rates offered by your local bank! • Sample interest rates, as of 10/13/11, for savings accounts (no/low
minimum balance):
– SunTrust local branch: 0.04%
– Bank of America local branch: 0.05%
– Wachovia/Wells Fargo local branch: 0.05%
– UVA Credit Union: .40%
– Capital One: 0.1%, or .85% with $1,000+
– ING Direct: 1%
– Discover: 1 %
• Look into any organization that you belong to – USAA, a credit union, ask your parents!
• Don’t pay fees: avoid debit card fees (the UVA credit union doesn’t charge one), overdraft fees, and returned check fees
Local grocery tipsHarris Teeter• 5% student discount – link your student ID to your VIC card• Double coupons up to 99 cents• Circular in store, Wed. Daily Progress, or www.harristeeter.com
Kroger• 5% student discount – link your student ID to your Kroger card• Double coupons up to 50 cents• Circular in store, Sunday paper, or www.kroger.com
Giant• Circular in store, Wed. paper (effective Friday), or
www.giantfood.com• Double coupons up to 99 cents
Food Lion• Circular in store, Wed. paper, or www.foodlion.com• Coupons redeemed at face value
Local household expense tips
• K-Mart– Circular in store and in the Sunday paper
• Wal-Mart• Sam’s Club
– $40 annual membership fee (can be used by two people!), a Collegiate membership gets you a free $15 gift card
– Refer a friend, and get a $10 gift card!
• Target• Bed Bath & Beyond
– Accepts their coupons past the expiration date! Sign up at www.bedbathandbeyond.com
• Big Lots– Circular in Wednesday or Thursday paper
Local food deals
Monday Tuesday Wednesday Thursday Friday
Biltmore: $6 thumbs/toes
McGrady’s: $3.50 apps (every happy hour)
West Main: $5 burgers
Wild Wing: 15% off military
College Inn: $13 large pizza/pitcher
Maarten’s: double wings
McGrady’s: $3.75/10 wings
West Main: $10 ½ ribs
Siips: $20 3-course meal
Baja: $5 all-you-can-eat tacos
College Inn: ½ off specialty pizza
Coupe’s: $6.50 steak
Maarten’s: $5 bbq/fries
Wild Wings: $2 tacos
Baja: $3 apps
Biltmore: $7 ribs/fries
Maarten’s: $5 cheeseburger
Chili’s: $0.25 wings (every happy hour)
Trinity: $5 burger
McGrady’s: $9 ribs
Saturday
Baja: $1 tacos
Chili’s: $2 burger bites
These are just a few of the deals! Check www.cvilledrinkspecials.com.
Local drink deals
These deals change constantly! Ask your favorite bartender, and go during happy hour if possible. Or drink at home!
Monday Tuesday Wednesday Thursday Friday Saturday
Biltmore: $2 PBR Tallboy
Boylan Heights: $6 Coors Lt buckets
Nitrate: $2 rails
Virginian: $3 Jack, $3 Jim Bean
Chili’s: $3.50 margs
Biltmore: rail and pitcher progressives
Boylan: $2 rails
Mellow Mushroom: $2 pints
Trinity: $3 rails
Beer Run: $1 off pints
Baja: $2 Sol, jello shooters
Biltmore: Free virgin drinks 5-7
McGrady’s: $6 Killians pitchers, $3 rails
West Main: $3 local beer
South Street: $3 pints
Biltmore: $1 rails 8-9pm
Boylan Heights: $2 drafts, rails
Nitrate: rail progressive
Virginian: $2 rails
Mellow Mushroom: select $5 pitchers
Virginian: $3 shooters
McGrady’s: $1 Bud Lt
Baja: $2 Sol, jello shooters, rail progressive
Wild Wings: $4 SoCo
Baja: $2 drafts, $3 rails
Boylan Heights: football specials
Sunday
Miller’s: $2 bourbon
Virginian: $2 rails
Other tips• Ask about student discounts and discount cards everywhere.
• Don’t be loyal. Shop around for banks, credit cards, insurance, utilities, etc. Call periodically and threaten to cancel your service.
• Use a credit card that gives you cash back or points, and auto-pay your utilities with that card. But be careful!
• Discounts using Cav Advantage - www.virginia.edu/cavalieradvantage
• Talk to the 4th-years!
• Websites to check out:
– www.frugalliving.tv – specifically, www.frugalliving.tv/free-stuff/birthday-freebies.html for birthday freebies
– Mom sites are great for tips and coupons: www.momsneedtoknow.com and www.moneysavingmom.com
– Slickdeals.net (especially for online shopping and tech stuff)
Other tips• Free entertainment in Charlottesville:
– Fridays after 5:00 – free concerts during warm weather
– First Fridays – free art shows
– Lots of local bands – come see Dr. Martindale on October 28th!
– Hiking trails/parks
• Make use of your resources as a student– $3 movies at Cinematheque (Newcomb Hall basement)
– Free recreational facilities, football games
– Cheap/free entertainment: Rotunda Sing, Tom Deluca, speakers, art shows - check the UVA Student calendar
– Find the University Programs Council on Facebook or check their website.
– Free movie rentals at UVA library (and local libraries)
– Student Health
• Other tips on your handout
The Financial Aid Office
We have an open-door policy – feel free to drop by anytime with questions or concerns. We can help with:
• making a budget
• debt management
• figuring out how much loan money to take out
• financial decisions (for example, using savings vs. taking out loans)
• financial emergencies
Dennis (A-H) Margaret (I-R) Nancy (S-Z)