Money Matters Presented by the Office of Financial Education SUB

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 9/11/14Scholarships 101SUB 1775pm 9/25/14What is in a Credit Score & More SUB 1775pm 10/14/14Salary NegotiationSUB 1775pm 10/30/14Don’t be Scared of Your Loans SUB 1775pm 11/13/14Your Financial Roadmap to Success SUB 1775pm 12/4/14Survive the Holidays on a Budget SUB 1775pm

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!

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 You will need your PIN to log in If you don’t have your PIN, visit 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)

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: 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