Managing Your Finances

Budgets are a very important part of our lives, and today, with the amount of financial aid a student must receive to get through school, a budget should be one of your top priorities.

Mortgages, car payments and having a family are all a part of life that we realize will be part of our budgets. School loan payments may also be a large part of the monthly budget.

Let's review what can happen when you do not have a budget or not using your budget:

• Acquire a bad credit record
• Be unable to obtain future credit when needed
• Pay late fees and/or be denied a deferment if the forms are not returned on time
• Pay interest on credit cards if they are not paid in full each month
• Have a law suit filed if you default on a loan
• Possibly have wages garnished
• Have your income tax refund withheld
• Have perpetual financial problems
• Possible end up in bankruptcy court

We can now take a look at a way to work with a budget, and even improve your credit, if it has been damaged.

• Make a budget that you can live with; don't forget to include savings and entertainment.
• Pay accounts when due, or earlier if possible, to save interest
• Use credit cards sparingly and pay off the balance each month. The interest and late fees you save can possibly be enough for entertainment.
• Contact your lender, if your payment is past due, to work out a new repayment schedule or a forbearance.
• If you have a heavy debt load, you might need to contact a consumer counseling group. They will establish a budget and work with your lenders to reschedule your payments.

CONSUMER COUNSELING GROUPS

These groups can be found in almost every state. They can contact your lenders to work out a repayment plan that is mutually acceptable, but you may need to make some personal adjustments to accommodate the agreement. If you have more debt than you can manage, this might be a way to help you get started in the right direction. The sooner you seek this help the better!

To locate a consumer counseling group in your area, call:

Use a Budget to Plan Expenses

A budget is a planning tool used to compare income to expenses. By using a budget, you can determine how much money you will need to spend in order to finish school and attain your degree.

To estimate your expenses for the school year, use the In-School Budget Planning Worksheet which is provided later in this section.

1. Specify a Budget Period
   
   When developing a budget or using a planning worksheet, remember that all expenses and resources you list must be for the same period of time which reflects your academic period, such as 9 or 12 months.
   
   
2. Estimate Your In-School Expenses
   
   To determine your expenses, you will need to collect some basic financial information. Your checkbook, school bills, and other monthly bills are good places to look for examples of your expenses. For other expenses such as personal items, clothing, and entertainment, keep a day-to-day record of your expenses for a month to help you make reasonable estimates.
   
   Tuition and fees generally do not change over a year and are considered fixed expenses. Other costs, such as housing, books, food, transportation, and supplies can change under different conditions and are called variable expenses. You will need to gather amounts for each of these classifications of expense, making "best-guess" estimates for variable expenses.
   
   
3. Calculate Your Income
   
   To estimate your income for the year, you will need to consider all of your resources. Use the same budget period that you used in figuring your expense budget, such as 9 months or 12 months.
   
   Include family assistance, grants and scholarships, savings, earnings, loans (including student loans for which you have been approved), and any other income.
   
   Your financial aid award letter, pay stubs, and bank account statements will help you calculate your available resources.
   
   
4. Determining the Remaining Balance
   
   The difference between your income and your expenses determines any remaining balance. This balance helps you to decide if you actually need all the loan money you are eligible to borrow.
   
   Negative Balance
   If the balance is a negative dollar amount, you do not have enough resources to cover your expenses. You will need to explore new financial resources and re-evaluate your expenses with a goal of reducing them. Many expenses depend on individual life-styles and can be adjusted to reflect your available resources.
   
   You may also consider meeting with a staff member in Enrollment Services to review other options, such as other sources of financial aid for which you qualify.
   
   Positive Balance
   If the balance is a positive dollar amount meaning that your total resources are greater than your total expenses--then you should also see an advisor. You may be able to reduce the amount of your loans, even if you've already received some of the funds. Remember that if you can lower the amount you borrow now, you will have less to repay later.