We’ve created a presentation on budgeting:
The dialogue to accompany the slides is as follows:
Intro
The basic premise…the most important aspect of budgeting… is understanding the in-and-out aspect of your personal finances. The ‘in’ being what you earn and the ‘out’ being what you spend. If you can justify the two against each other and have your earnings remain greater than your spending then you’ve successfully budgeted your finances.
(Slide 2 + 3) Finding Balance-Title slide/What are we here to learn
College is expensive but you can take a great deal of pressure off of your family and yourself if you can keep your own personal spending organized while you’re in school…plus learning these skills now just gives you another effective tool in your toolbox when working towards a successful life after college. To start, you must find a balance between your income and your expenses.
What can I spend?(Fix Title) (Slide 6 + 7)
Remembering that your loans are debt, and should be budgeted into your monthly allowances as such, is key. If you’re spending loan money on food and the money you earn working on non-necessities then you’ve got your financial priorities mixed up and are due for a reassessment of your goals.
The Importance of Budgeting (Slide 8)
Now I understand that nobody here is planning their finances with ten years down the road and I’m not suggesting you do that…it would be a waste of time as you just can’t anticipate life in that way…BUT helping to keep your finances in perspective while you’re in school will provide a foundation for life after school (and hopefully minimize the amount of debt you graduate with). A budget answers three basic questions: (slide 9)
Where does my money come from? (Slide 10)
Where is my money going? (Slide 11)
What choices should i make financially? (Slide 12)
Budget Definition
Expenses
Essentials and nonessentials
Essential Expenses:
Essentials: food, water, electricity, heat, a roof over your head…
Non Essential Expenses
a 50 dollar bar tab at the dugout or eating lunch out daily.
Setting Financial Goals
The first step to taking control of your finances is to set yourself a series of financial goals based around three primary categories. those categories are your saving, spending and your income.
(insert snapshot of the three goals)
Income Goals
Goals related to income are really relevant only to students with jobs or sources of monthly income…that being said a goal for a student without monthly income could be to find part time work for a certain number of hours each month or week.
Spending Goals
Spending goals should be as concrete as possible. You want to try to stay consistent with your spending goals so every month you can gauge what you can and cannot afford.
Saving Goals
Once again, how much you spend is more important than how much you earn. The percentage you save will depend on the amount you earn. For example: If you make $250 per month, and put 10% of that monthly income into a savings, you will be saving $25 per month. The important part sticking to that percentage.
Financial Zen
How much you earn, save, and spend are all dependent on each other. If you stay consistent and keep a monthly tab on all three of these aspects, you have a solid budgeting foundation.
Young Money Slide
It is important to know about your income and how much you can safely spend. If you are aware of these things, you’ll be on the right track.
So how do we balance Income VS Expense?
So now we’re going to show how to track and balance your income and expenses so that, at the end of the month, you’ll be left with a little extra money to put in your savings. To start off, you should use the two-month cashflow worksheet that we’ve provided for you. You can find it on the FinAid website or have one of us e-mail it to you.
Cashflow sheet overview
It looks like this. One section for monthly income and another for monthly expenses. The spreadsheet has been populated with all of the calculations so all you have to do is customize the expense categories to reflect your personal spending habits and enter your income and expenses….the computer will do all the calculations for you.
Monthly Income
Any type of income inserted in rows 3 through 7 will automatically be added together and placed in row 8, entitled ‘Total.’
Monthly Expenses
Now, down to monthly expenses. Let’s say you’re beginning your cashflow sheet and you input your cell phone bill as your first expense: $200. The sheet will automatically calculate itself, placing the $200 at the bottom in ‘Total Expenses’ and subtracting it from the income total above, leaving you with $800. Budgeting your cash is as easy as copying down your expenses.
Proper Budgeting Worksheet
After you have gotten an idea of your expenses versus your income, you can create a more proper budgeting sheet. In Monthly Income, place the maximum amount of money that you are able to receive in the budgeting column, and in Monthly Expenses, place the maximum amount of money that you are able or willing to spend. After the month is over, input what you actually spent and received into the Actual column. Although this individual received 50 dollars less in actuality than they expected to in their Budget column and spent 50 dollars more in Groceries, they made up for it in spending less on gas, receiving 50 dollars in Other Income, and spent no money on Dating; leaving them with $50 as their Difference. That’s fifty dollars more to put into savings.
Tips for Managing Money
Expect the unexpected. Expenses pop up when you least expect them and you don’t want them to affect whether or not you can travel or, worse, eat. Peer pressure is also a drain on funds… if you can’t really afford to drink beers then DON’T! Just because a debit card isn’t cash and doesn’t feel as immediate doesn’t mean it isn’t. think of it as cash. Because it is.
Big Expenses
These things seem intangible and way down the road, but trust us: four years in college flies by and all of a sudden you’re in the real world staring down the barrel of significant financial obligations. Be prepared for them by practicing good habits now. if you don’t…
Loan Repayment Schedule
One tool for helping you to budget is an interest rate table which, based on the amount of your loan debt, can help you to figure your monthly payments (if you haven’t already)
Helpful Budgeting Tools
Your smartphone is a great tool in preventing added financial burden… if you feel your debit account is in the red zone (near overdraft) then quickly hop on your phone and check your finances before you go down to the dugout for wings… it could save you 35 bucks in overdraft fees! This leads us to and important thing to consider as a student: Some banks will offer online banking, no atm fee’s, etc. As a student, especially if you are a freshman or sophomore, it is recommended to open a student checking/savings and use direct deposit. It is only beneficial to choose a bank with online banking and no atm fees (maybe one or the other), but most of all, do your research on the banks before you apply to open a new account.
PAID 