BYOB Build Your Own Budget
BudgetingWhat 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
Creating a Realistic Budget
Three easy steps….
1. List the income you expect and when you expect to receive it
2. Write down your expenses – keep a list as they occur
3. Add up the two columns and find a balance
Cost of Attendance – 10 monthsFixed College Expenses
◦Tuition◦Health Insurance◦USMLE Step exams◦Books/Supplies (year)
M1 = $2400 M2 = $1,020 M3 = $930 M4 = $560
Cost of Attendance – 10 monthsVariable College Expenses
◦Living expenses - $11,790 or $1,179/m
◦Transportation - $2,412 or $241/m◦Personal stuff - $3,188 or $318/m
◦Total = $17,390 or $1,739/m
Spending Guidelines
Housing40%
Transportation12%
Food20%
Health care12%
Misc16%
Source: U.S. Bureau of Labor and Statistics
Budgeting the Cost of AttendanceGuideline % Per
GuidelineStudent A Student B
Housing – 40% $695 $650 $550
Food – 20% $348 $308 $300
Transport – 12%
$208 $208 $256
Health Care – 12%
$208 $208 $208
Misc – 16% $280 $275 $245
Monthly Budget
$1,739 $1,649 $1,559
*Tuition/Fees, Books/Supplies, USMLE have their own budget.
COA = $17,390/ 10 months = $1,739 per month
What is $3 a day worth?Daily Cost $3.00
Monthly Cost $90.00
Months in Year 12
Total Yearly Amount $1,080.00
Total borrowed after 4 years $4,320.00
Annual Interest Rate 6.8%
Interest after one year on first loan $266.00
Interest after four years on all four loans*
$630.00
Interest during grace period* $147.00
Total owed at repayment $5,097.00Monthly loan payment $58.66Total payments $7,040Total interest* $2,717*4 yrs school, 6 month grace, 10 year repayment
Financial Aid AdjustmentsReturn excess funds each
semester◦You have 120 days from
disbursement to return any portion of your loan without penalty (it’s in your promissory note)
Borrow less and ask for more later◦Ask for budget adjustments for car
repairs, medical expenses, daycare, computer purchases, etc.
Budget PitfallsBeware of variable expenses
like…◦Parking◦Eating out◦Gifts◦Cell phone◦Class Dues◦Dry cleaning/Laundry◦Expenses paid yearly◦“Miscellaneous”
“Personal finance is 20% head knowledge and 80% behavior.”
-Dave Ramseyauthor of “The Total Money Makeover”
Save on GroceriesBecome 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
Save on Housing – House vs. AptHouse 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: $165Total time savings: 8 hours
Save on TransportationRaise insurance deductible to $1,000Consider dropping comprehensive or
collisionShop around for insuranceMaintain itRepair itSell itCar poolPublic transportation?Move closer to campus
Save on EntertainmentRent a DVD vs. going to a movieTake a few bucks and leave your
wallet at homeVolunteer for local eventsSwap and shareDo you really need cable? Take poor friends with you!
Making Your Budget StickHave a plan and write it downEliminate temptationsUse CashPrioritize your spendingReward yourself when you meet
goalsThink long-termFind a system that works for YOU
If you aim at nothing…….you’ll hit it every time.
What’s next?
Understanding CreditNovember 14th at Noon
S255
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