FINANCIAL LITERACY MODULE #1

2021
 Budgeting & Financial Planning:
Two Important Aspects of a
Personal Money Management System

 Budget - An itemized summary of estimated or intended

expenditures for a given period along with proposals for
financing them.

 Financial Planning - Management of all aspects of an

individual's financial affairs with the objective of pursuit
of the achievement of the individual's financial goals.
Budgeting topics we will discuss today:
 Needing a Budget
 Identifying Needs and Wants
 Creating a Budget
 Creating a Spending Plan
 Earning Spending Money
 Adjusting a Budget
 Plugging Spending Leaks
 Needing a Budget
 Define your budget according to your spending habits. Organize your use
of money by thinking about the following:
 Spending Categories – consider needs vs. wants.
 Setting Priorities – needs come first.
 Establish Boundaries – don’t let guilt take priority over the well-being of
yourself and your family.
 Pace Your Spending:
 How often do you get paid?
 What bills are due during each pay cycle?
 Recognize Spending Limits:
 Set a limit on the amount you spend on wants.
 Avoid temptations and pressure!
 Be Prepared for Emergencies – “rainy day” savings.
 Identifying Needs and Wants
 Write down a list of your needs and wants and their costs, and then look
carefully at what you’ve written down.

 Now, review your list and think about what’s really important to you and
what has lasting value.

 Do you really need or want everything on your list? Put stars next to the
items that are particularly important to you.

 Are some needs actually wants? Cross off the least important wants.

 If you find that some of your wants are unreasonable, write down a more
reasonable alternative to that particular want.
SAMPLE NEEDS AND WANTS CHART

Housing $800

Vehicle $250
Food $300
Electricity $100
Insurance $250
Starbucks $100 Make coffee
AC $100
Cable TV $250 Don’t need
CREATE A BUDGET
 Identify income – Use top
of Monthly Budget
Worksheet

List the financial assistance

each month – family gifts,
income, child support, other
payments
CREATING A SPENDING PLAN
 Track all spending
 Big $ – tithe, rent, utilities, vehicle, tuition, groceries
 Small $ - tickets, sodas, haircuts, entertainment
 Use a “spending notebook”
 Spiral, spreadsheet, notepad, or software like Quicken
 Track during one month – evaluate your spending
 What types of “smart” purchases were made
 What purchases are unnecessary
 Debit card users – easily review-categorize your spending
 Pay major bills first
 Then budget all other small ticket items above
 Don’t forget to save a little each month for emergencies
List your expenses – Use Spending Detective Worksheet
Using receipts or spending notebook – determine actual expenses as much as possible
Compare income with expenses –
Use Monthly Budget Worksheet
Make adjustments
Is income higher than expenses? Save
some money. Are your expenses
greater? Time to adjust.
Cut expenses by
Identifying needs vs wants
• See “plugging spending leaks”
or
Increasing Income
• See “earning spending money”
 EARNING SPENDING MONEY
 While attending school requires many hours of your time – if you need
some extra cash, try to find some part time work
 Manage your time accordingly for work and play
 Talk to your college’s financial aid department – earning additional money
may interfere with eligibility
 Tips on finding on-campus jobs
 Apply with Career Services Office
 Bookstore – staff discounts
 Library – quiet study time
 Computer center – access to resources
 Working for a professor – research studies
 Keep checking for openings
EARNING SPENDING MONEY CONT…
 Tips on finding off-campus jobs
 Limit hours
 Look for flexible schedules and short shifts
 Factor in transportation time and costs
 Jobs with perks
 Work for tips and/or free meals at restaurants
 Employee benefits – health insurance/vacation
 Creating your own job
 House, Baby, or Pet sitting
 Tutoring – computer assistance
 Selling handmade jewelry, crafts, paintings etc.…
 Detailing cars or Lawn care
 ADJUSTING A BUDGET

 What are some reasons your money situation

could change?
 Income increases – work, grants, gifts
 Start a savings account or put money away while you can
 Deposit grants, scholarships, work-study job, gifts into
checking account – easier to track, safer – less expensive
than money orders. Also can get an ATM/Debit card
 ADJUSTING A BUDGET CONT….
 Income decreases – lose a job, rent increases,
major car trouble, lose financial support, illness
 Look at expenses – limit your unnecessary spending
 Snacks, entertainment, clothing, gifts
 Reduce your budget – taking a little from each
category
 Takeyour amount deducted ÷ by the # of categories –
reduce each category by that amount
 Get a roommate – eat at home – borrow books –
eliminate services
 Carpool – buy only essentials – shop consignment
PLUGGING SPENDING LEAKS
 Does money leak from your pockets?
 Where did the money go – watch yourself spending
 Record your spending activities - ie… impulse buying
 Spending control techniques
 Leave credit cards at home
 Instead of attending movies – go to free concerts or plays
 Use your bike instead of a car for those short trips
 Carry a refillable water bottle instead of buying beverages
 Limit wants – like ringtones and other services
 40 MONEY MANAGEMENT TIPS
#40 Net worth is not the same as self-worth #20 Use campus computers instead of buying one
#39 Learn about your options for saving and investing money #19 Save on snacks
#38 Pay yourself first – SAVE – SAVE – SAVE #18 Make meal plans that works for you
#37 Learn the power of compounding #17 Take time now to prepare for your career
#36 Get into the savings habit #16 Turn your hobby into a money maker
#35 Get help if you get into debt trouble #15 Look for a job on campus
#34 Take control of your credit card #14 Make school your first job
#33 Avoid credit card pushers #13 Talk to a financial aid officer (if changes)
#32 Build good credit #12 Submit a new FAFSA
#31 Create a budget and stick to it #11 Understand your student loan obligation
#30 Plug everyday spending leaks #10 Use loans as a last resort
#29 Keep track of your student account #9 Watch out for scholarship scams
#28 Don’t let car expenses drive you crazy #8 Keep looking for financial aid
#27 Take advantage of student discounts #7 Understand your financial aid
#26 Separate needs from wants #6 Don’t bounce checks
#25 Resist peer pressure #5 Find the best deal for your checking account
#24 Set ground rules regarding money #4 Protect your personal information
#23 Pay the rent/mortgage on time #3 Get organized
#22 Compare the cost of an apartment to a dorm #2 Know the ground rules
#21 Talk to your roommates about money issues
#1 TAKE CHARGE OF YOUR LIFE
–AND YOUR MONEY
TAKE A QUIZ ON MONEY MATTERS

 What to you know about budgeting?

 The Quiz has 10 Questions.

SOURCES AND ADDITIONAL RESOURCES

 https://hefwa.org/resources/cashcourse.html
 CashCourse | Your Real-Life Money Guide
 Smart About Money | Personal Quizzes (nefe.org)
 Student Loan Resources: Financial Aid & Loan Debt Management
 https://financialaidtoolkit.ed.gov/resources/fin-lit-guidance.pdf
 https://www.financialliteracy101.org/financial-literacy/index.cfm?
 https://www.incharge.org/financial-literacy/resources-for-teachers/college/
 Your Spending Your Savings Your Future: A Beginner's Guide to Financial
Readiness (nefe.org)
 40 Money Management Tips Every College Student Should Know (nefe.org)