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					      Mind Over Money
                        A common sense approach




Jeff Turnbull
Student Financial Aid



                         Mind Over Money
How much will I pay in tuition?


 Missouri Resident             Non-Missouri Resident
     $71,120                           $85,432 or $96,836




                     Mind Over Money
Education Debt

 Most graduates have student loans
 You’re not alone
 Fear



     Q. What was the average student loan debt for the class of 2010?



                           $101,074.66
                           Mind Over Money
 Loan Basics
Organize
     Keep track of your loan information
     Have loan docs in a single place. It helps with
      anxiety.


Calculators
     www.finaid.org
     www.Dinkytown.net


                         Mind Over Money
  NSLDS
  National Student Loan Data System


       Dept. of Ed’s central database for student
        loans
       Current lender
       Loan servicer
       Outstanding principal balance (OPB)


NSLDS is not real-time data, and non-federal loans are not listed on
the NSLDS website.
Note: For private student loan information, review your credit report.


                                 Mind Over Money
Summer Financial Aid

 Loans are available
 Amount ? - last year $3,500
 Grad PLUS for some – credit based




                    Mind Over Money
                  • Loans
                  • Free blocks
                  • Financial aid refunds
                  • Costs
                  • Repayment
                  • Consolidation




Mind Over Money
Monthly Payment Estimates
Federal Stafford Loans with 6.8% interest

Loan amount of $50k               Loan amount of $95k
10-year payment - $575            10-year payment - $1,093
25-year payment - $347            25-year payment - $659



Federal Grad PLUS loan with 7.9% interest

Loan amount of $30k
10-year payment = $345                     IBR
20-year payment = $208                     www.ibrinfo.org

                         Mind Over Money
True or False
Rudy, my Golden Retriever was featured in the
textbook Companion Animals, by Dr. Karen
Campbell and Dr. John Campbell.



                  True



                    Mind Over Money
Financial Planning
 Live on a budget

 Have an emergency fund

 Pay off debt and live debt free

 Plan for and expect a rainy day,
   it’s gonna rain.

 Invest and save for retirement

 Pay off your house early

 Give to those that are less
   fortunate


                                Mind Over Money
Financial Responsibility

 You are responsible for your future.
 Strive to make wise personal financial
  decisions.
 Harness the power of compounding.




                     Mind Over Money
Building Blocks




                  Mind Over Money
Where Do I Begin?

                               What you own and
                                what you owe.




                               What you earn and
                                what you spend.




             Mind Over Money
 Reaching Your Goals Through Budgeting

Your Spending / Savings Action Plan


  Your financial success is largely a matter of choice, not chance.

  Your budget is where you make and implement those choices.




                                   Mind Over Money
  Action Before:
Step 1. Set Goals

Your spending plan (budget) has three stages: before, during, and after



         Long-term goals – more than 5 years.

         Intermediate-term goals – 3-5 years.

         Short-term goals – less than 1 year.



      Remember to prioritize your goals.

                                  Mind Over Money
 Action Before:
Step 2. Estimate And Revise Your Budget


    Take Home Pay – called your disposable income.

    Discretionary Income – money left after necessities are paid.


            Don’t worry, your spending won’t conform to your
           budget.

            You must reconcile your needs and wants so total
           expenses do not exceed your income.


                             Mind Over Money
 Action Before:
Step 3. Plan Your Cash Flow


      Before the month begins.
      Income is usually constant month after month
      Expenses may rise – car insurance, taxes, etc.

 1. Use a cash-flow calendar to eliminate anxiety.
 2. Use a revolving savings fund. – borrowing from yourself


        Effective budgeting may involve curtailing your expenses. Borrow from
                         yourself to meet budget deficits later!

                                   Mind Over Money
 Action During:
Step 4. Control Spending


     Monitor your categories
     Debit cards – track online
     Use Cash
                         For some, CASH is King.
                             It helps to control
                                 spending.


                                  The Envelope System
                         Mind Over Money
 Action After:
Step 5. How Am I Doing?


      Evaluate at the end of each budgeting cycle.
      Gives feedback to use for the next cycle.

  This is done by comparing actual amounts with budgeted amounts.


               Evaluating will assess your
            progress in meeting your financial
                         goals.

                                Mind Over Money
How many years has the
  Labrador Retriever
  been the number 1
  most popular dog in
  America?




                         Mind Over Money
Surpluses

  Carry surpluses forward
  Put into savings
  Build a CASH reserve
  Blow money

OR
                Pay down



                    Mind Over Money
Budget Busters
 Car Payments
 Credit Cards
 Clothing   - Sadie and Kayla

 Electronics     - law student story




                                 Mind Over Money
Did You Know?

The Top 3 Financial Mistakes In Budgeting

  1.   Fail to plan for non-monthly expenses.

  2.   Underestimate how much they spend each month.

  3.   Use credit cards to balance their budgets.




                              Mind Over Money
                                                  I’m gonna
 Words Of Wisdom                                need a bigger
                                                    brain!



      Look at your
   personal finances
 like a company. You                                        If you were the
   are in business to                                        chief financial
     make a profit!                                      officer of YOU INC,
                                                         would you fire you?


Your Net Gain
     Your household is like a company. You want to make a profit.

Your Net Loss
     You will need to borrow money or take money from savings to
     make ends meet.

                              Mind Over Money
Major Purchases
Planned Buying – think about the details & do you homework




                         Mind Over Money
How To Buy Smart
 Don’t buy on impulse
 Pay cash
 Buy at the right time
 Do not pay extra for a “name”
 Recognize the high price of convenience

   When buying a car, negotiate effectively and decide at home.
   1. Arm yourself with information.
   2. Negotiate your price.
   3. When negotiating a vehicle purchase, the key is to obtain
      a firm price before any aspects of the deal.
                              Mind Over Money
Auto Buying
1.   Rule #1, don’t mention financing or trade until you have the
     salesperson down to a price.
2.   You will know from your pre-shopping research what a good
     price is.
3.   Start your haggling from your “good price” rather than the
     asking price or sticker price.
4.   Obtain prices from three or more dealers and let each one
     know that you have done so.
5.   This pressures the dealer to meet your needs rather than the
     other way around.
6.   Pay Cash



                              Mind Over Money
The Top Financial Missteps In
Big-Ticket Purchases
 People slip up in purchasing vehicles and other big-ticket
 items when they do the following:

 1.   Rely upon the seller as their source of information for
      price, financing terms, and/or trade-in value.

 2.   Tell a seller what they can afford to pay (because the
      seller can then avoid disclosing their lowest price).




                           Mind Over Money
Should You Rent or Buy
 Depends on your preferences.
 What you can afford.

Note: In the short run, renting is usually less expensive, in the long
run, the opposite is true.




                               Mind Over Money
Buying a Home
In the next five years:
1.   Save the funds for a down payment within a tax-sheltered Roth IRA
     account.
2.   Get your finances in order before shopping for a new home by
     reducing debt, budgeting better, and clearing up anything that keeps
     you from having a high credit score.
3.   Buy a home as soon as it fits your budget and life-style so you can
     take advantage of special income tax deductions and price
     appreciation over time.
4.   If you make a down payment of less than 20 percent on a home,
     cancel private mortgage insurance as soon as the equity in your
     home pushes the loan-to-value ratio to 80 percent.




                               Mind Over Money
Steps in the Process of Buying a Home




                 Mind Over Money
Your Credit Score Affects Your Mortgage Interest Rate


Example: Interest rates

   Credit Score                            APR
   760–850                                 5.1%
   700–759                                 5.3%
   680–699                                 5.6%
   660–679                                 5.8%
   640–659                                 6.0%
   620–639                                 6.7%
   600–619                                 7.0%
   Below 600                         subprime market only
                          Mind Over Money
 Instant
message



   Want a free copy of your credit report?
   Visit www.annualcreditreport.com




                 Mind Over Money
Saving For The Future




              Mind Over Money
Stuff You Might Find Useful
                                                     Debt Payments-to-Disposable
Debt Service-to-Income Ratio                         Income Ratio
(includes rent/mortgage)                             (excludes rent/mortgage)
      Annual debt pmts                            Monthly non mortgage debt pmts
       gross income                                 monthly disposable income

     A ratio of 0.36 or less is                          A ratio of .15 or less is desirable.
             desirable.

                                                 Note: disposable income is the amount of income
                                                 remaining after taxes and withholdings.




    Rome wasn’t built in a day!               If Jeff (a 30 year old) making 46K
                                              yr. invested 15% of his income for
   Understand Dollar Cost Averaging.          retirement at 10% he would have
                                              3.6 million when he’s 70.
                                       Mind Over Money
Words Of Wisdom


1. Don’t let your emotions get in the way.

2. Resist the urge to splurge

3. Be realistic




                                                    If your married, don’t
                                                       fight, be partners!
                                  Mind Over Money
Words Of Wisdom

 Be grateful for what you have.
 Being frugal is the cornerstone of building
  wealth.
 The best things in life really are free.




                       Mind Over Money
Resources
 Dave Ramsey – www.daveramsey.com
 Mind Your Finances – www.mindyourfinances.com
 Retirement video -
    http://www.pbs.org/wgbh/pages/frontline/retirement/view/
   Social Security estimate - http://www.ssa.gov/estimator/
   Drive Free, Retire Rich - http://www.daveramsey.com/article/drive-
    free/?ectid=bitlyified072820100840
   Introduction to Mutual Funds -
    http://www.baruch.cuny.edu/tutorials/mutual/view_tutorial.html
   The Millionaire Next Door – By Thomas Stanley -
    http://www.thomasjstanley.com/




                                 Mind Over Money

				
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posted:4/17/2013
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