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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

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+ 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?

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+ Needs vs. Wants

Need Want

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+ 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

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+ 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

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+ 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.