Welcome to the first

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Welcome to the first seminar
MONEY TALKS
BUDGETING
presented by the Financial Aid Office and the
Medical Alumni Association
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Resources
First, make a list of all of your resources for
medical school.

• Help from family parents, grandparents, aunts,
  uncles, siblings
• Personal or spouse income
• Personal savings
• Scholarships
• Need-based school scholarship (must qualify each
  year)
• Non-need-based scholarships (school and
  outside)
• www.finaid.org
• www.fastweb.com
• Soros
• Norfolk foundation
• Beware of scholarship search sites that make
  you pay!
• Service-based scholarships
• School loan (must qualify each year)
• Federal Stafford loans

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Federal Loans

• Subsidized Stafford Loans
• 6.8 fixed interest rate
• No interest while in school or grace period
• 8500 maximum every year
• Unsubsidized Stafford Loans
• 6.8 fixed interest rate
• Interest starts accruing immediately after
  disbursement
• Maximum listed in your financial aid award
  letter
• Graduate PLUS Loan Loan of last resort
• Requires separate in-person entrance interview
• Can make up difference between aid and Cost of
  Attendance

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Expenses
Fill in the budgeting worksheet in your goody
bag. Not sure about your expenses? Keep track
for a few months keep all of your receipts,
credit/bank card statements, ATM receipts, etc.
Find a way that works for you take out a fixed
amount of cash each week to spend, use your debit
or credit card for all purchases (be careful!),
keep all your receipts in your wallet, or keep
track in your PDA as you spend money. Make sure
you dont forget expenses that only come up once
or twice a year taxes, car insurance, Christmas
and birthday gifts, health insurance, books,
board fees, security deposits, etc.
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Your Cost of Attendance Budget includes

• Tuition fees 32,650 for in-state, 42,650
  for out-of-state for 08/09
• Health insurance 1,976
• Books and supplies 1,025
• Instruments 900
• Living expenses 1547/month for 10 months
  (August June)
• For example 650 rent utilities (including
  internet)
• 270 transportation
• 290 food and household supplies
• 40 savings
• 297 personal miscellaneous (clothes,
  recreation, copays, haircuts, gifts,
  pets, alcohol, etc)

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How to build your budget

• Make a list of all of your resources
• Make a list of all of your expenses
• Software may help MS Money, Quicken, Excel
• Build non-monthly expenses into your monthly
  plan
• Gifts, car maintenance and insurance, taxes,
  etc
• If your budget is tight, monitor your spending
  closely during the month at least until being
  frugal is a habit!

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Budgeting on Financial Aid
One rule Live as cheaply as possible. If your
personal expenses are less than the Cost of
Attendance Great! Only borrow what you really
need. If you need more loan money later, you can
always request more (up to the Cost of Attendance
maximum). View your unsubsidized loans as a line
of credit, and only borrow when you need it! If
your personal expenses are more than the Cost of
Attendance You can look for creative resources
money from your parents, a part-time job, or
family loans. But the best solution is to find a
way to reduce your expenses. Reducing your debt
now will allow you more income later Spending an
extra 200/month now could increase your student
loan payment by 116/month for 10 years after you
graduate, and cost you almost 14,000 to repay.
If you stretch your payments out to 30 years,
that 200/month could cost you over 23,000.
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If you are borrowing, your budget will determine
how much loan money you need to request. Add up
all of your necessary expenses, then compare that
to your resources. For example
Expenses 42,650 tuition fees 1,976 health
insurance 1500 books/supplies/instruments
Monthly costs (for 10 months) 450
rent 165 utilities (half of 80
electricity, 70 phone/DSL, 50 cable, 30
water and 50 cell phone) 200 groceries 50
household supplies 75 car insurance 50
gas 100 eating out 30 gifts 150 misc
(recreation, clothes, copays, etc) 1,270
total/month x 10 months 12,700 Total Expenses
for the year 58,826
Resources 5000 from parents 1000 from
savings 3000 outside scholarship 8500
subsidized loan 16,500 school scholarship 10,000
school loan 44,000 total resources so far
This student can borrow up to 24,021 in
unsubsidized loans. Should she?
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Real World Budgeting

• Pay yourself first
• Choose an amount and make it automatic
• Four savings categories life happens,
  emergencies, retirement, and investments
• Remember the debt-to-income guidelines
• 28 maximum for housing (including taxes and
  insurance)
• 100,000 income 2300/month max for housing
• In Charlottesville, thats approximately a
  300,000 house
• 36 max overall
• 100,000 income 670/month in other debts
• Large student loans will increase your overall
  DTI
• Eliminate debt asap
• Two methods highest-rate first, snowball
• Have a plan for raises and bonuses

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Building your budget
If you are not on financial aid and have a fixed
amount of income, you should take the sum of your
resources, subtract your fixed costs, and whats
left is discretionary recreation,
personal/miscellaneous, etc. Example Student is
married and has a full tuition scholarship. Spouse
s take-home 2300/month (after taxes, health
insurance, etc) Fixed expenses 100
savings 850 rent 300 utilities (90
electric, 30 water/sewer, 130 Sprint, 50
cable) 250 car payment 90 car
insurance 150 gas/maintenance 200
groceries 75 household supplies 50
clothes/laundry 100 non-monthly
expenses/misc 2165
This leaves 135/month for discretionary spending
is that enough?
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Okay, I have a budget. Now what?

• Stick to it! Especially when you first start
  living on a budget, keep track of your expenses
  carefully. Check weekly to see how youre doing.
• Tell your friends! Its very hard to live on a
  budget without help from friends and family.
• Organize low-cost activities with your friends
• Participate in meal-sharing with your roommates
• Dont panic! If you overspend one month, look
  for ways to save money and get back on track the
  next month.

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The Psychology of Budgeting

• Beware of keeping up with the Joneses
• This problem will get worse when youre a doctor
• Dont be overly optimistic
• Be realistic about needs vs. wants
• Establish a waiting period
• Find a way to trick yourself into saving
• Deposit savings automatically
• Save your change
• Save what you get from coupons

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Saving

• Pay yourself first! It never works to just save
  whats left.
• Students should have either a small emergency
  fund, or financial aid available, in case
  unexpected expenses come up.
• In the real world, try to build up an emergency
  fund that is equal to 3-6 months of living
  expenses.
• Dont settle for the poor interest rates offered
  by your local bank!
• Sample interest rates, as of 10/21/08, for
  savings accounts (no/low minimum balance)
• SunTrust local branch 0.20
• Bank of America local branch 0.20
• Wachovia local branch 0.15
• ING Direct 2.75
• HSBC Direct 3.0
• Emigrant Direct 3.0
• Capital One 2.55

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Local grocery tips

• Harris Teeter
• 5 student discount must show student ID every
  time
• Double coupons up to 99 cents
• Circular in store, Wed. Daily Progress, or
  www.harristeeter.com
• Kroger
• 5 student discount show student ID when
  registering for the Kroger card
• Double coupons up to 50 cents
• Circular in store, Sunday paper, or
  www.kroger.com
• Giant
• Circular in store, Wed. paper (effective Friday),
  or www.giantfood.com
• Double coupons up to 50 cents
• Food Lion
• Circular in store, Wed. paper, or
  www.foodlion.com
• Coupons redeemed at face value

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Local household expense tips

• K-Mart
• Circular in store and in the Sunday paper
• Wal-Mart
• Sams Club
• 40 annual membership fee (can be used by two
  people!)
• Target
• Bed Bath Beyond
• Accepts their coupons past the expiration date!
  Sign up at www.bedbathandbeyond.com
• Big Lots
• Circular in Wednesday or Thursday paper
• Look for deals online www.slickdeals.net, others

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Local food deals
These are just a few of the deals! Ask your
favorite restaurant.
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Local drink deals

• These deals change constantly! Ask your favorite
  bartender.
• Happy Hour M-F Wild Wings 4-7, Orbit 5-9,
  Chilis 3-7, Virginian 5-7,
• McGradys 430-7, South Street 430-630, West
  Main 4-6, Baja 4-9

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Other tips

• 10 student discount at J. Crew
• Free entertainment in Charlottesville
• Fridays after 500 free concerts
• First Fridays free art shows
• Lots of local bands
• Hiking trails/parks
• Make use of your resources as a student
• 3 movies at Cinematheque (Newcomb Hall basement)
• Free recreational facilities, football games
• Cheap/free entertainment Rotunda Sing, Tom
  Deluca, speakers, art shows check the UVA
  Student calendar
• Free movie rentals at Clemons library
• Student Health
• Use Cavalier Advantage at the Newcomb parking
  garage, 25 discount - www.virginia.edu/cavalierad
  vantage

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The Financial Aid Office

• We have an open-door policy feel free to drop
  by anytime with questions or concerns. We can
  help with
• making a budget
• comparing loan offers
• figuring out how much loan money to take out
• financial decisions (for example, using savings
  vs. taking out loans)
• financial emergencies

Dennis (A-H)
Margaret (I-R)
Nancy (S-Z)