Hands on Banking® Financial EducationBudgeting & Paying for College
Budgets…what a word!
Doesn’t it send chills down your spine? Somewhat like the words “test-exam” or “homework”!!
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Budget?
What do you think a budget is?
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How can a personal budget help you? A budget can help you:
Identify how you spend your $
Identify items that cost too much
Help you save for college
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Creating a budget is easy!
Budget basics
Know your income and expenses
Income = allowance, $ from odd jobs i.e., mowing your neighbor’s yard, baby sitting, pet sitting, etc.
Expenses = school supplies, snack $, movies, cell phone, clothing, etc.
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Needs and wants
Needs are items or activities you must have in order to live
Wants are things you would like to have or do but that you could live without
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Making tradeoffs
Making tradeoffs is about choosing not to buy one thing in order to buy another…making tradeoffs isn’t always easy
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Practice Let’s practice a budget activity for Angie…
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Description Income (+) Expense (-) $ Available
Earnings – babysitting and running errands
$80.00 $80.00
College fund $15.00 $65.00
Snack money $20.00 $45.00
Savings for CD player
and computer$15.00 $30.00
Entertainment/Clothes $20.00 $10.00
Angie’s 4-week budget
Wrap up on Budgeting The difference between
needs and wants
Create a budget that makes sense for you
Budgeting will help you save for other things you really want
Learn to make tradeoffs!
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That’s all there is to it!
Budgets are simple to make…and a little harder to follow
Remember a budget is like a report card…you will never reach your goals unless you apply yourself
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Paying for College
© 2010-2012 Wells Fargo Bank, N.A. All rights reserved. For public use.
What are my family’s options?
There are many options that families use to pay for college expenses.
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*Typically offered through the institution
Income
Savings
Financial aid
Tuition payment plan*
529 Plans
Federal student loans
Private student loans
Investments
Home equity
Lines of credit
What’s the best option?
The best choice is different for every family and individual situation.
What’s right for you doesn’t have to be just one option— a combination of aid, savings, loans and income might be the right choice.
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How does financial aid fit in? Many times, financial aid
is a lower-cost option for families.
Start with a visit to the school’s financial aid office in your Junior year. They’re the first source for information on grants, scholarships and aid.
It’s the focus of their office to ensure that your family can pay for school.
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Financial aid myths
Only students with a perfect grade point average get aid.
If your family has a decent income, you won’t qualify for anything.
Only great athletes get grants and scholarships.
There’s so much paperwork involved, it’s not worth the time and effort.
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Financial aid facts
Financial aid is money that:
Can come in the form of grants or scholarships that don’t have to be paid back
Could include a Work Study program
Is offered as loans.
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Getting started
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First things first
Complete the Free Application for Federal Student Aid (FAFSA). Most undergraduates need their parents’ information to complete the form.
Required in order to qualify for federal aid
Complete this as early as possible after your taxes are complete in January of your Senior year.
The results are automatically sent to the schools that you indicate.
Find the form at fafsa.ed.gov.
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Note: Check with the financial aid office for additional forms or applications that you and/or your child may need to complete.
The FAFSA online
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Types of aid
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Don’t have to be repaid
Beware of scams—you should never have to pay to do a scholarship search. Find details on finaid.org and fastweb.com
Awarded based on financial need and/or academic achievement
Don’t have to be repaid
Some are federally funded and others are state programs
Some institutions have their own private grant programs
Based on financial need
Allows students to earn income working part-time
Can work either on or off-campus
Scholarships Grants The Federal Work-Study Program
What federal loans are available?
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Need-based
Low interest rates
Fixed interest rates
Government guaranteed
Qualify for unsubsidized regardless of family income
Fixed interest rates
Cover the cost of education
Not need-based
Federal Perkins Loans
Federal subsidized and unsubsidized loans
Direct PLUS Loan for parents and graduate students
Federal Direct Loans
How much will college cost?
When planning how much to borrow, consider the following costs:
Tuition & fees: varies by school
Housing: dorm room or rent
Meals: cafeteria or groceries
Books and supplies: buy used textbooks to save
Transportation: the bus or parking pass and gas (Student loans
cannot be used for the purchase of a car)
Personal expenses: laundry, toiletries, cell bills, etc.
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Senior Year Timeline
As soon as possible after January 1, file the Free Application for Federal Student Aid (FAFSA) at fafsa.ed.gov (don’t forget to get a PIN).
Register for advanced placement tests.
Complete scholarship applications.
Watch for the Student Aid Report (the response from the FAFSA application).
January February March
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Senior Year Timeline
Compare financial aid awards
Look for additional funding if aid doesn’t cover the cost
Make sure your final transcripts are sent to the school you will attend
If you have a summer job, save money!
April May Summer
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Easy Steps to Money Success in College Create a budget
A budget, also called a spending plan, can help you see where you’re going with money
so you don’t spend it recklessly.
Reward yourself: save, save, save
Think of saving as giving a gift, or paying a reward, to you! Whenever you receive
money, put some of it into your savings right away.
Keep your money safe…and growing
You can keep your money safe by opening savings and checking accounts at a bank or
other financial institution.
Shop Wisely
Is it something you need or something you want?
Use credit to your advantage
Showing you can pay back your loans is important in order to build a good credit history
and credit score—which is important when you’re ready to buy a car, rent an apartment,
find a job, or eventually buy a house.
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More information for students and parents
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Covers the basics of good money management and the skills you need to create a brighter financial future
handsonbanking.org
Hands on Banking®
Any questions?
Thanks for your time today.
More information: studentaid.ed.govfafsa.ed.govanycollege.comcollegenet.comfastweb.com
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