Money Matters
Presented by the Office of Financial Education
SUB 177
406.994.4388
makechange@montana.edu
What the Office of Financial Education
Can Do For You
•
One-on-One Financial Coaching to assist in loan repayment, credit, budgeting
scholarship and other money management skills.
•
Upcoming Workshops
9/11/14
Scholarships 101
SUB 177
5pm
9/25/14
What is in a Credit Score &
More
SUB 177
5pm
10/14/14
Salary Negotiation
SUB 177
5pm
10/30/14
Don’t be Scared of Your
Loans
SUB 177
5pm
11/13/14
Your Financial Roadmap to
Success
SUB 177
5pm
12/4/14
Survive the Holidays on a
Budget
SUB 177
5pm
Topics
• The importance of a budget
• How you can start today!
• Types of Budgets & Examples
• Goal Setting
• Review, Review, Review
• The Importance of Saving Money
• Student Loans-The Basics
What is a Budget
• A spending plan
• A plan to keep you living within your means
• Keeps you personally and financial responsible
Why Do You Need One?
• Know your limits
• Know your wants vs. your needs
• Know your values
• It is important for you to take a vacation once a year?
• Put that into your budget!
• Know how to spend wisely
What Can You Do Today
• Make a quick budget of your fixed and flexible
expenses vs. income
•
•
•
•
•
Rent
Groceries
Utilities
Phone Bill
Etc.
• Are you exceeding your income?
• Start tracking the “small” and “impulse buy” items
Monthly Budget
• Now that you have a handle of the basics of
budgeting, try tracking your expenses for a month
• This will give you an idea of where your money is
going
• Make as many categories as you need
• Don’t forget about your savings!
MONTHLY(SPENDING(PLAN
Houshold(Income
Salary/1
Salary/2
Other
Total
Budgeted(Items
SAVINGS
Emergency/Fund
Retirement/Fund
College/Fund
HOUSING/
First/Mortgage/
Second/Mortgage/
Real/Estate/Taxes
Homeowner's/Ins./
Repairs/or/Mn./Fee
Replace/Furniture
Other////////////////////////////
UTILITIES
Electricity/
Water
Gas
Phone
Trash/
Cable/
FOOD
/Groceries
/Restaurants
PAGE(1(TOTAL
Amount
Notes
$2,716 1st/of/month
$945 1st/and/15th/of/month
$3,661
Sub/Total/
Actually/Spent
%/of/Take/Home/Pay
6%
$224
26%
$915
$50
8%
$100
$55
$75
$45
$21
12%
$360
$50
$1,895
IMPULSE/BUYS
RECREATION
Entertainment
Vacation
DEBTS/(Hopefully/_0_)
Visa/1/
Visa/2
Master/Card/1
Master/Card/2
American/Express
Discover/Card/
Gas/Card/1/
Gas/Card/2
Dept./Store/Card/1
Dept./Store/Card/2
Finance/Co./1
Finance/Co./2
Credit/Line/
Student/Loan/1
Student/Loan/2
Other/
Other/
Other/
Other/
Other/
PAGE/3/TOTAL
PAGE/2/TOTAL
PAGE/1/TOTAL
GRAND/TOTAL
TOTAL/HOUSEHOLD/INCOME
TOTAL/SURPLUS
Budgeted(Items(Continued
Sub/Total/
Actually/Spent
$100
%/of/Take/Home/Pay
3%
2%
$50
$25
18%
$100
$75
$50
$100
$325
$825
$900
$1,895
$3,620
$3,661
$41
There is an
extra $41.
You can put
that towards
any category
you want
If You are Spending More
Than You Earn…
• Try a week by week spending plan
Week by Week Spending Plan
• Allows you to track your money and know exactly
where you are spending it
• Easier to prioritize your expenses
• Allows you to save money easier
• Can calculate how much money you have left over each
week and put it towards savings
• Control where you spend your money
• Can increase or decrease the money you put towards
luxuries and entertainment
How to Get Started
•
Use all of the categories that you used for your monthly plan
• Add more if needed
•
Each week track of your expenditures and the amount that you
have left over
• Example: Joe earns $350 per week. He spent $100 on groceries the
week of 3/17
• Joe entered that expense in as
• Food $100/$250
•
At the end of each week you are able to see if you are spending
too much or too little in one category
•
Once you know where you are spending your money it is easier to
adjust your spending habits
Still Feel You Are Spending
Too Much?
• The envelope system might be the best fit for you
Envelope Budgeting
•
Divide your money into different categories
•
•
•
•
•
•
Rent/mortgage
Childcare
Groceries
Utilities
Phone bill
Assign each category to an envelope
• Determine how much you will spend in each category
• Budgeted $400 for groceries put in the envelope $400
• Track how much you are putting in each category
•
Only use the money in the envelope for that particular category
• Track expenditures from each envelope & re-calculate how much you have
leftover after each transaction
Does & Don’ts
• Do:
• Take out the exact amount of cash that you budgeted
for
• If you run out of money in one envelope either
• Don’t spend any more in that category or
• Pull money from a different envelope
• Next month budget more in the categories that ran out
Does & Don’ts
• Don’t
• Pull additional cash from your checking account
• Try to avoid using your credit or debt card as much as
possible
• If you must use your credit or debt cards put the cash
amount into a envelope labeled “bank” and deposit it
back into your bank account
Don’t Like Carrying Cash?
• There are many websites and apps that use the
envelope system to help you budget
• Be careful, some might cost money to participate!
Keep Your Financial Goals In
Mind
• Set Short Term and Long Term Goals
• Are you wanting to be debt free when you graduate?
• Are you saving for a vacation, wedding, house?
• Want to put 10% of income into savings?
• Set SMART Goals
•
•
•
•
•
Specific
Measurable
Attainable
Realistic
Time-based
Review
• Review your spending plan
each month
• Focus on what you did, not
what you didn’t do
• It’s okay if you slipped up a
few times just adjust your
budget accordingly
• Go into each month with a
positive attitude
Why Is Saving Important?
• No one can predict the future so it is important to
have a cushion for emergencies and for when “life
happens”.
• The amount you can afford to save now may seem
small at first but remember you are earning interest
of the dollars you save.
• Experts recommend putting at least 10% of earned
income into a savings account.
How to Get Started
• Before you start saving, you should have a clear
understanding of what you are saving for. Setting a
savings goal will keep you motivated.
• For example, a few common savings goals are
emergencies, investments/retirements and special
occasions (weddings, vacations, etc.).
How To Make the Savings
Habit Stick
• Commit to one month
• Find a person to be accountable to and who you can talk
to if you are wanting to make an impulse purchase
• Find a savings role model who is successful with their
money
• Write your SMART goals down and track the progress
• Avoid tempting situations
Student Loans
The Basics
Types of Student Loans
• Subsidized
• Unsubsidized
• Perkins
• Parent PLUS
• Private
Federal Subsidized
• 3.86% + 1% origination fee
• During periods of deferment, interest is paid by
federal government
• Grace period=6 months after student
graduates/leaves school
Federal Unsubsidized
• 3.86% + 1% origination fee
• During periods of deferment, interest is NOT paid
by federal government
• Grace period=6 months after student
graduates/leaves school
Perkins loans
• Lender is Montana State University
• Current interest rate at 5% (subsidized)
• Grace period=9 months after student
graduates/leaves school
• Can be consolidated with federal loans
Private
• Private lender (ex. Wells Fargo, Sallie Mae)
• Varying interest rates; can be fixed or adjustable
• May or may not have a grace period
• Cannot be consolidated with federal or Perkins
loans
• Use as a last resort and use sparingly!
National Student Loan Data
System
• http://www.nslds.ed.gov
• You will need your PIN to log in
• If you don’t have your PIN, visit http:pin.ed.gov to
“Request A Duplicate PIN”
• Refer back to NSLDS once a year
• Make sure information is accurate and up to date
• Locate your loan servicer!
Identifying Your Loan Servicer
• Servicers for federal loans:
•
•
•
•
FedLoan Servicing (PHEAA)
Nelnet
Great Lakes Educational Loan Services
Sallie Mae
• Servicer for Perkins/Nursing Loans is Montana
State University
• Contact the Perkins & Nursing Loan Servicer at
(406)994-2702
Payment Plans
• Standard-automatically enrolled; 10 years
• Extended: 25 years; smaller payments, pay more
interest over time
• Graduated: 10 or 25 years; payment amount
increases every 2 years
• Various Income-based Repayment: 20-25 years;
based on your annual income
Avoid Default!!!
• Default=non-payment for 270 days (9 months)
• Potential consequences include:
•
•
•
•
•
Loan becomes due in full immediately
Collection fees of up to 24%
Garnished wages, seized tax refunds
Negatively affect credit scores and reports
State licenses could be suspended
• Always stay in contact with your loan servicer!
Minimize Loan Debt Now
• Budget loan refunds...pay back what you don’t
need
• Make payments now! Even small amounts here
and there help.
• Consider working while in school to help reduce
need for loans.
Thank You!
Any questions?
Office of Financial Education
SUB 177
406.994.4388
makechange@montana.edu