Financial Wellness CurriculumThe Budgeting Process

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Financial Wellness CurriculumThe Budgeting Process

More information available at YouCanDealWithIt.com.THIS PRESENTATION HAS BEEN DEVELOPED BY AND PAID FOR BY PHEAA.

The information contained herein is believed to be accurate at the time of printing. Due to the rapidly changing nature of the law and the industry, information contained in this document may become outdated, and PHEAA/AES does not guarantee the accuracy of the information herein. You should verify that this information is correct. Any Stafford or PLUS loan first disbursed on or after July 1, 2010 must be obtained directly from the federal government through the Federal Direct Loan Program (FDLP). Please contact the financial aid office at your school for additional information.

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Objectives

•Budgeting Misconceptions and Truths

•The Budgeting Process» Goals» Income » Expenses

•Create a Budget

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Budgeting Misconceptions

» A budget won’t allow me to enjoy life or spend money on “fun” things.

» It’s unrealistic and restricting.

» Budgets are “set in stone.”

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The Truths About Budgeting

Budgeting…

» Is a necessary part of managing your money

» Enables financial independence

» Helps to manage and prevent debt

» Prepares you for the future by balancing spending and savings

» Enables you to plan ahead for big purchases

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The Budgeting Process

Three Steps

» Goals---What you want

» Income---How much money you earn

» Expenses---How much money you spend

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The Budgeting Process: Goals

What are your goals?

» Short Term• 3 months to 1 year

» Long Term• 2--5 years or longer

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The Budgeting Process: Income

Sources of Income

» Graduation money

» New job

» Second job or part-time job

Determine how much money you have saved.

Determine how much you expect to earn.

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The Budgeting Process: Expenses

Where does your money go?

» Rent/mortgage

» Taxes, insurance, medical

» Food

» Utilities, cell phone, etc.

» Transportation (car, gas, bus, train)

» Student loan payment

» Clothing

» Entertainment

» Investments

» Day care

» Credit cards and other debt

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The Budgeting Process: Expenses

Evaluate and Track Your Spending

» Do you run out of money before the weekend?

» Do you know where the money went?

• Eating out • Clothing

• Social activities • Savings

• Your personal appearance • Church or charity

• Paying debt • Hobbies

• Sports

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Create a Budget

Think “spending plan,” not “budget.”

» Gather the information you need (income and expenses).• Pay stubs• ATM receipts• Bills • Expense tracker• Etc.

» Consider savings an expense and figure out how much you need to save to reach your short-term and long-term goals.

A budget lets you have more control!

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Create a Budget

Use the YouCanDealWithIt.com budget calculator.

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Create a Budget

Budgeting 101: A day in your life---What to eat and where

Eating Out

» Café latte, muffin ($6)» Cheese steak, bottled water ($10)» Drive-thru meal ($8)

Total: $24Price per meal: $8

Eating In

» Trip to the grocery store ($105 for the week)» Sample menu for 1 day:

• Muffin/coffee• Sandwich and water• Pasta with sauce and salad

Average per day: $15Average price per meal: $5

Annual savings: $3,285

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Objectives

•Budgeting Misconceptions and Truths

•The Budgeting Process» Goals» Income » Expenses

•Create a Budget

Questions? Comments?