1. Managing Your Financial Resources

2. What Is a Budget?
What can a budget do for me or tell me?
A budget is an itemized summary of your income and
expenses for a given period.
A budget is a plan for managing your money.
A budget provides a concrete, organized, and easily understood breakdown of
how much money you have coming in and how much you are letting go.
A budget is a plan for short-term expenses, like your monthly bills, and mid-term
expenses, like vacations, as well as long-term expenses, like buying a house,
paying for your college education and putting money away for retirement.

3. Why Is a Budget Important?
What use is a budget?
A budget helps you determine whether
you can grab that bite to eat or
should head home for a bowl of soup.
It’s an invaluable tool to help you
prioritize your spending and manage
your money—no matter how much or
how little you have.
Source:
http://www.personalfinance.duke.edu/manage-your-finances/budg

4. Why Have a Budget?
Why should students budget?
College students can use a budget to figure out how to make do with their
school expenses and limited incomes, thus reducing stress and providing
stability in knowing how to make ends meet.
 New graduates create budgets to make
sure they're properly allocating their first
paychecks among emergency savings,
retirement savings, student loan
repayments, rent and utilities, and reward
for their hard work like new gadgets and
nights on the town.
Adapted from: http://www.investopedia.com
/university/budgeting/basics1.asp

5. How Do I Create a Budget?
Creating a budget is vital in keeping your financial house in order.
In order to be successful you have to include as much detailed information as possible.
Ultimately, the end result will be able to show where your money is coming from, how much is
there and where it is all going.
Record all of your
sources of income.
Create a list of
monthly expenses.
Gather every financial statement you can.
Break expenses into two
categories: fixed and
variable.
Total your monthly
income and monthly
expenses.
Make adjustments to
expenses.
Review your budget
monthly.

6. Budgeting Tools
Tools can be simple – paper and pencil or online, whatever
fits your style. There are free tools on the Internet as well as
tools you can purchase. The following are just two examples:
http://www.mint.com (free) - Mint pulls all your financial accounts
together so you can see your entire financial picture. It allows you
to set a budget, track your goals and do more with your money.
You can also see your balances and transactions
together, on the web or your phone.
http://www.youneedabudget.com (available for purchase after free
trial)– You Need a Budget (YNAB) teaches you how to set up an
account, customize your categories, budget your dollars and work
toward building a buffer. Read YNAB’s four budgeting rules:
http://www.youneedabudget.com/method.

7. Budget Challenge: Impulse Control
Budgeting requires discipline and organization, but equally important is
practicing impulse control so that you don’t sabotage your own success.
Impulse control is one very important predictor of success in life.
In one Stanford study, children who were able to resist eating a marshmallow when
asked turned out 10 years later to be more competent and have higher SAT scores!
You can improve impulse control by practicing deferred gratification.
Controlling impulsive behavior contributes to more education and more wealth.
Self-control lets you relax because it removes stress and enables
you to conserve willpower for the important challenges.
Adapted from: http://www.nytimes.com/2011/09/04/books/review/willpower-by-roy-f-baumeister-
and-john-tierney-book-review.html?pagewanted=all&_r=0 and http://sivers.org/book/Willpower

8. Budgeting Tips: After You Graduate
Budgeting is a practice that you should incorporate into your life
beyond your school years. If you budget your money, you will be able
to take control of your life and feel more secure and content. Not
budgeting can lead to a live of fear, drama, misery and insecurity.
The top issues to incorporate into your
budget, now if possible, but particularly after
you graduate are:
Paying off student loans
Setting up an emergency fund
Starting a retirement account

9. Budget Tips:
Paying Off Student Loans
Student Loan Repayment Strategy
Paying off student loans should be your first/highest priority.
Pay the highest interest rate loans first (usually private loans), then lower interest
rate loans (usually federal Stafford and Perkins loans).
Student loans are not dischargeable in bankruptcy, so you need to plan for
repayment.
Budget for a 10-year payoff structure for your loans, if possible, to save on interest
and to allow you to move on to other priorities.
Paying the loans earlier in your career makes sense from a tax perspective. As you
start out, if you make less than $75,000, you can deduct the first $2,500 in interest.
Consolidation generally doesn't save money. Be sure to read all the fine print if you
are considering consolidation to see if it makes sense for you.
High debt may make you financially undesirable to a potential partner!

10. Budget Tips:
Setting Up an Emergency Fund
Emergency Fund Basics
Start with the goal of saving $2,000 for minor catastrophes.
Slowly build your emergency fund up until you have enough to cover
4-6 months’ of living expenses.
Things can happen (e.g., a new grad who injured a knee
playing Wii tennis was out of work for 6 months!).
Automate deposits to your fund so that saving the money is routine.
Make the fund less accessible so that you are not tempted to dip into
it for other things and to help you practice impulse control. Have the
deposits go into a separate stand alone account or use two different
financial institutions, like a bank and a credit union.
Investigate using a credit union because they are usually competitive
with banks in services, if not better. Many hospitals are often affiliated
with a credit union, so you may be able to join a credit union easily.

11. Budgeting Tips: Credit Cards
If you must rely on credit cards…
Your goal should be to pay them off monthly and if that is
not possible, carry no more than a 10% balance.
You need to maintain a good credit rating, not a perfect one.
You can check your credit ratings at Equifax, Experian, and TransUnion annually at:
https://www.annualcreditreport.com/cra/index.jsp.
You generally do not need credit monitoring services. Get advice from your bank or credit
union before you commit to this type of service.
Cash rewards and miles are not necessarily a good deal – investigate the rewards
programs carefully.
Stay away from store cards: low limits results in high utilization.
If you need to get a credit card, look for cards with no application fee, an annual fee of
under $40. It can be a good way to establish credit and contain spending.
Try not to use your credit cards. You will spend more than if you use cash!

12. Budgeting Resources
 How to Create a Budget
http://financialplan.about.com/od/budgetingyourmoney/ht/createbudget.
htm
 Budgeting Basics (9 sections)
http://www.investopedia.com/university/budgeting/
 Money Saving Tips for the Going-Back-to-School Crowd
http://www.allalliedhealthschools.com/blog/2012/money-saving-tips-for-
back-to-school/
 10 Steps to Making a Financial Budget
http://money.cnn.com/magazines/moneymag/money101/lesson2/index.
htm
 Master Your Money in 9 Days
http://www.youneedabudget.com/method/nine-day-course

13. Managing Your Financial
Resources:
An Investment in Yourself
If a man empties his purse into his head, no one can
take it away from him. An investment in knowledge
always pays the best interest.
~Benjamin Franklin