Budgeting Having Fun Ballin on a Budget ICE

Budgeting & Having Fun Ballin on a Budget

ICE BREAKER! What is your earliest money memory? These early experiences can shape your money behaviors as an adult.

SHOW OF HANDS! How many have created a budget in the past?

SHOW OF HANDS! How many of you have STUCK to your budget?

The Importance of a Budget: Looking to Your Future �Nearly 70% of consumers live paycheck to paycheck � 68% of Americans could not cover a $5, 000 emergency without having to go into debt for it � 55% of Americans “always” or “sometimes” worry about their money �Nearly 30% of Americans spent more time watching reality TV last month than they spent planning and preparing for retirement over the past 10 years �Habits you form now will affect the rest of your life

For every dollar you borrow of federal funds, you will repay $1. 72.

As You Begin the Budget Journey Take responsibility for your money: �Spend money wisely �You are accountable for your choices �Get help Behavior matters— become mindful: �Practice financial selfawareness �Observe thoughts, feelings, and behavior �Watch yourself and others and be honest �Beware the 24 -hour marketplace

Budgeting Rewards �Ability to maintain or improve your standard of living �Controlled spending allows you to live well today and tomorrow �Accumulate wealth—Remember, whatever your income, you can spend it or save it �Hope of avoiding much of the havoc that money problems wreak on your personal life—Conflict over money is the leading cause of divorce

What is Your Biggest Obstacle to Sticking to a Budget? �Little things adding up �Impulse purchases (coffee, clothes) �Not knowing how to start a budget �Having trouble creating a budget that adequately reflects all of my expenses, debts, etc. �Monitoring spending/tracking expenditures �Unexpected expenses—friends want to eat out, etc. �Not having a clear food budget �Feeling overconfident in my current spending habits �Not actually taking the time to make one �Problem being able to say “no” to things that don’t fit my budget

Budgeting 101 1 • Develop a plan • Keep it simple & realistic! 2 • Make a list of all sources of income • Make a list of all anticipated expenses 3 • Identify shortfalls • Do you have a Plan B for emergencies? 4 • Implement plan! • Revisit and revise quarterly

Budgeting in Action �A 1 st year MD student will have a ten-month $24, 897 cost of living allowance built into the financial aid budget: $24, 897/12=~$2075 per month *Per federal regulations, we are not allowed to provide you with financial aid for the months you are not enrolled as a student, so you will need to ration your funds to make it last the full 12 mo. *This is the gross amount disbursed to the student, not including the origination fees This student would use $2075 as the amount coming in each month, and subtract all obligations from this amount. FINANCIAL AID EXPERT TIP: When you receive your loan disbursement at the beginning of the semester, put the entire amount into your savings account. Then, each month, pull only that month’s worth of funds into your checking account.

Based on recent survey results: Expense Average Spent Per Month Rent (with avg. of 1 -2 roommates) $1, 000 Utilities $125 Laundry/Dry Cleaning $16 Groceries/Eating Out $342 Clothing $40 Toiletries/Personal Care $33 Monthly Charlie Card $63 Entertainment $60 Other $44 Total $1723 If the student in the example stuck to this budget, s/he would have ~$352 in excess each month. FA EXPERT TIP: Return unneeded funds within 120 days of disbursement and there will be no origination fees or interest accrued on that amount!

Types of Budget Plans �Traditional—example to follow �Zero-based �Every dollar is given a purpose �Every category is evaluated �Tends to be a bit more work �Ds. Budget is a useful website for this type �Envelope method �You can use “spreadsheet envelopes” instead of cash, or set up separate bank accounts for groups of expenses � 50/30/20: Essentials/Goals/Wants �Event-based �Vacation, wedding, holiday spending

Traditional Budget Plan

Budgeting Tools �Mint. com �Budgetpulse. com �AAMC’s FIRST page �Budget. Tracker. com �Money. Strands. com �Buxfer. com *These sites are not Tufts “endorsed”

Don’t Have Too Much Month Left at the End of Your Money! �Clip coupons to save money on groceries �Carpool or use public transportation �Buy clothes at end-of-season sales �Buy generic brands rather than name brands products �Buy non-perishable items in bulk �Cut out the daily latte or frequent dining out �The 30 Minute Rule: If you see something you “have to have, ” wait 30 minutes, then if you still can’t live without it—make the purchase.

Student Discounts �Several student discounts available both nationwide and locally in Boston �bostononbudget. com/college-discounts/ �www. giftcardgranny. com/blog/student-discounts/ �Amazon Prime for Students �Amazon Subscribe & Save

Student Discounts: Clothing �LOFT: 15% off �Ann Taylor: 20% off �Banana Republic: 15% off �J. Crew: 15% off regular-priced items �The Limited: 15% off �The North Face: 10% off �Marathon Sports: 10% off But remember, just because something is discounted, does not automatically mean it is budget friendly!

Entertainment �Take advantage of happy hour food specials �Use Groupon/Living. Social/Gilt. City for events and entertainment �Boston Public Library for movies, museum passes, tourist site tours, and more with membership �AMC Loews Boston Common 19 �Zip. Car—TUSM students join for only $15 �Seek out free or cheap events on thebostoncalender. com

I’m not the only expert here… Let’s help each other! What tricks do you use to save money?

Your Homework �Determine your income/funds available per month �Look at budgeting tools such as Mint. com or budgetpulse. com �Look at your monthly spending �Determine the items that are costing you the most �Make a plan…if you are spending $15 a week on an item like eating out or coffee, make a plan to reduce it and to reward yourself for sticking to it