Quick tips on Budgeting and

Saving

Compiled January 2015

Budgeting

Know what you owe

Face your federal loan debt at nslds.gov

Round up your credit card statements

Get to know your habits

Set a budget

Then track your money for two months (paper or app)

Compare budgeted vs. actual

Learn new habits

How can you outsmart yourself?

Personal experience: I am a better saver when I automate savings, debt, and set dates

When do you want to be debt free?

Do you have enough for fun and “not-so-fun” times?

Budgeting

Minimize debt by trying to live frugally

Roommate? Biking? Skip the latte? Cook?

Cash only diet—hide the credit cards

Increase income

Freelance, dog-sitting, a very part-time job

For borrowers

If you can, pay your interest as it accumulates so it will not be added to your principal loan amount.

Look for repayment options before graduating: studentaid.ed.gov

Only 18% of eligible borrowers are on income-based!

Beware of private (non-federal) loans.

Savings

Retirement savings

Consider a plan with a 9% interest rate

Contribute $2,000 for 35 years from age 31 to 65

Your $70,000 will grow to $470,249!

Every 10 years you delay retirement savings, you’ll need to triple your savings to catch up.

Immediate savings

Just $2 a day with 5% interest = close to $10K after 10 years

A yearlong strategy

$1 in week 1, $52 in week 52

$52 in week 1, $1 in week 52

0% interest = $1378 after one year

Savings

instrument Maturity risk yield minimum balance

taxable?

Savings Account

Immediate None if insured Low $5 Yes

Certificate of Deposit

90 days or more

None if insured Moderate Varies Yes

Corp. Bonds 5–30 years Some Moderate $1,000 Yes

Muni. Bonds 1–20 years Some Moderate $5,000 No federal,

some states

Stocks Immediate Low to high Low to high Varies Yes

Treasury Bonds

10–30 years None Low $1,000 Federal only

Mutual Funds Varies Low to high Moderate Varies Usually

Retirement Funds

When buyer is

60 years old

Low Moderate Varies At maturity

Source: practicalmoneyskills.com