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+
Managing Debt Accumulation
A Financial Beginnings Financial Education Program
Copyright © 2014 Financial
Beginnings, all rights reserved.
+ Ice breaker What aspects of college life are you looking forward to?
Copyright © 2014 Financial Beginnings, all rights reserved.
What will you miss from your pre-college life?
+ What are we doing today?
We will:
Learn how student debt accumulation relates to your post-college
financial future.
Learn how to budget to limit student debt accumulation, and learn
to spend and save money more wisely.
Explore strategies for managing a large amount of your education
expenses while still in school.
Copyright © 2014 Financial Beginnings, all rights reserved.
+ We know why we’re here!
Copyright © 2014 Financial Beginnings, all rights reserved.
+ We may have to borrow
Copyright © 2014 Financial Beginnings, all rights reserved.
+
Do you know how much student debt you are
going to have when you leave school? The average for an undergraduate degree is approximately $29,000
Copyright © 2014 Financial Beginnings, all rights reserved.
+ How many leave with debt?
Copyright © 2014 Financial Beginnings, all rights reserved.
+
What about credit card debt? The average is $10,000.
Copyright © 2014 Financial Beginnings, all rights reserved.
+ More students drop out of school
because of financial troubles than
academic troubles!
Build credit while in school
Limit to one card you pay off
each month
If you do not know when you
are going to pay off the items
you purchase, you should not
be charging them on your
credit card.
Copyright © 2014 Financial Beginnings, all rights reserved.
+
Don’t worry about it! I’m going to
make lots of money. Lifeline Activity
Copyright © 2014 Financial Beginnings, all rights reserved.
+ Life is expensive! Can you put in dollar amounts for your goals?
Education
Associates degree
Trade School
Bachelor’s degree
Master’s degree
Law degree or Doctorate
Career
Get a job
Start a business
Family
Get married
Have a child
Care for parents
Send children to school
Major Purchases
Buy a house
Buy a car
Buy a vacation home
Retire
Copyright © 2014 Financial Beginnings, all rights reserved.
+ Moral of the story Large student loan and credit card payments post-college
are going to make reaching your financial goals more
difficult.
Copyright © 2014 Financial Beginnings, all rights reserved.
+ Minimize debt during school
Copyright © 2014 Financial Beginnings, all rights reserved.
Increase Income
• Become a Resident Assistant
• Work in school and/or on breaks
Decrease expenses
• Live at home
• Live off campus with roommates
• Save on book costs
• Cut out the bad habits
+ Have you created a budget?
How do you determine how much you need to borrow?
Do not automatically take the total student loan amount
offered
Copyright © 2014 Financial Beginnings, all rights reserved.
+ Basics of Budgets
Expenses Net Income
or Loss
Fixed Variable
Earned
Portfolio
Gifted or borrowed
Surplus or
Shortfall
Income
Copyright © 2014 Financial Beginnings, all rights reserved.
+ Income
Earned
Portfolio
Gifted/Loaned
Copyright © 2014 Financial Beginnings, all rights reserved.
+ Expenses
Fixed Rent
Car insurance
Loan payments
Phone bill
Variable Food
Clothing
Gas
Taxes
Entertainment
Copyright © 2014 Financial Beginnings, all rights reserved.
+ Would you rather live like a poor
college student now or at
retirement?
Copyright © 2014 Financial Beginnings, all rights reserved.
+ Needs vs. Wants
Need Want
Copyright © 2014 Financial Beginnings, all rights reserved.
+ How to start a budget
Pick a time period
Project your income and expenses
Calculate income – expenses
Income needs to exceed expenses
Income Expenses
Net Income/
Loss
Copyright © 2014 Financial Beginnings, all rights reserved.
+ Where can I cut expenses?
Copyright © 2014 Financial Beginnings, all rights reserved.
+ Budget busters
Unexpected expenses
Unrealistic budget line items
Lack of adjustments when necessary
Not tracking to budget
Not factoring “what if” scenarios
Copyright © 2014 Financial Beginnings, all rights reserved.
+ How do you keep track of your
money?
Copyright © 2014 Financial Beginnings, all rights reserved.
+
Which budgeting tool is best? The one that you will actually use
Copyright © 2014 Financial Beginnings, all rights reserved.
+ So now what?
Calculate debt repayment before before taking out debt
Keep in mind your future self
Create a budget
Use your budget and keep up-to-date
Copyright © 2014 Financial Beginnings, all rights reserved.
+ Got it?
Do you:
Understand how student debt accumulation relates to your post
college financial future?
Understand how to budget to limit student debt accumulation and
how to spend and save money more wisely?
Understand how to manage a large amount of your education
expenses while still in school?
Copyright © 2014 Financial Beginnings, all rights reserved.