Managing Your Money .. Planning Wisely with Your Present Resources

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Managing Your Money ..Planning Wisely with Your
Present Resources Vanderbilt University School
of Medicine January 21, 2009
Mary B. W. Fenton, MA National Executive, Health
Professions and Graduate Schools American
Student Assistance
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Participants In The Life Of A Student Loan(s)
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Objectives

• Identify what money means to you
• Conscious beliefs represent only a fraction of
  our personal belief system. Like the tip of an
  iceberg, the stuff that sinks ships is hidden
  beneath the surface, in our unconscious. ..
  Dr. Susan Forward (Money Demons)
• When I was young I thought money was the most
  important thing in life now that I am old, I
  know it is. . Oscar Wilde
• Identify steps to successful financial health
  wealth
• Identify steps to productive and successful
  budgeting
• Identify differences between discretionary and
  fixed expenses

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YOUR Financial Plan
Key to managing your
dont let it get out of whack!!
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Questions About . Lead to Memories of

• -Family message about money as you were growing
  up?
• -Did you receive an allowance?
• If so, did you have to work for it or was it
  just given to you?
• - discussed in your home?
• -Work, as a teenager?
• If so, what happened to the you earned?
• -1st time you went into debt for
  something you wanted?
• -1st time you remember losing ?
• - influence your choice of
  career?
• - your friend or enemy??

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Common Sayings and Slogans About

• SAYINGS
• (The Love of Money) is the root of all evil.
• Money doesnt grow on trees.
• Money isnt everything.
• Do you think Im made of money?
• Money cant buy you happiness.
• Money CAN buy you happiness.

• SLOGANS
• Blood money
• Drug money
• Dirty money
• Funny money

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SO What Does Mean To You??????

• ?Love?
• ? Security?
• ? Independence?
• ? Pay bills dont think about the rest?
• ? NEVER enough of it?
• ? Dont think you deserve a lot of
  it?????
• ?Afraid to say I want to be
  wealthy?

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You Cannot Get to Wealthy Without A Budget or,
A Plan..

• Wealth much money or property great worldly
  possessions riches (Websters New World
  Dictionary)
• ?a relative term .
• Budget can have negative connotations
  restrictive, oppressing, impossible to do, where
  do I start, etc.
• (Financial) plan sense of control, connotes
  knowledge, understanding, personal teamwork,
  (partner) teamwork, etc.
• You cannot rock-climb without the proper
  equipment/tools!!!

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Average (Vanderbilt Medical Student) Sample
Yearly Student Budget
Discretionary expenses approximately 28
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Vanderbilt University School of Medicine Standard
Student Budgets-2008-09

• MS-1
• 58,920 (16,498)

• MS-2
• 58,510 (16,383)

• MS-3
• 63,990 (17,917)

• MS-4
• 59,710 (16,719)

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4 Years of Discretionary Expenses (average) ..

• 67,517
• What part of this can you save?

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What Is Discretionary Spending VS Fixed
Spending???

• Fixed 72
• ?TUITION
• ?FEES
• ?USMLE costs, etc.

• DISCRETIONARY 28
• Rent ?cut costs with a roommate(s)
• Utilities ?cut costs with a roommate(s)
• Groceries ?co-op, discount food stores
• Insurance ?dont carry unnecessary insurance
• Laundry ?individuals will take in
• Eating out ?Ritz vs pot-luck dinner
• Phones ?limit amount of plan
• Entertain ?movie vs rental
• Vacations ?cruise vs local site-seeing

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Inventory of Your Present Financial Resources??

• ? Personal Resources???
• ? Family Resources???
• ? Grants/Scholarships???
• ? Federal Loans???
• ? Alternative/private Loans???
• ????????

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Why Arent Some of Us As Successful As Others
When It Comes to Managing Our Money?

• ?Fear
• ? Denial
• ? Inability to judge difference between
  needs and wants
• ? Lack of discipline
• ? Procrastination
• ? Lack of emotional support
• ? Conflicting societal values
• ?Dont know what resources
  are available to them
• ?Havent (clearly)
  articulated goals

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Budgeting for Success ..

• ?Get out of denial
• ?Be realistic about what you can do to hold down
  discretionary expenses
• ?Identify all of your resources
• ?Know where your is going on a daily, weekly,
  monthly, yearly basis
• ?Live by your financial compass no one elses
• ?Set some financial goals, now, and . (LIVE ON
  Less than the Standard Student Budget)
• ?Reevaluate goals ( how youre handling your
  budget), on a yearly basis

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Budgeting for Success (contd) ..

• ?Plan for emergencies (uncovered health/Rx
  expenses, suit for residency interviews, etc.)
• ?Decide what is absolutely necessary
• -cable/satellite??
• ?Shop only when you REALLY need something (or
  leave credit card _at_ home)
• ?Know when it is a WANT instead of a NEED
• ?Grocery shop with a list and stick to it dont
  shop when youre hungry
• ?Get in the habit of saving
• ?How do you do that on student loans???
• ?After medical school (during residency) save for
  major purchases, i.e., car, vacation, etc.

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Interactive Budget Worksheet ..
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Interactive Budget Worksheet
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The Cost of a Mocha Latte 1 cup 4 1
cup every weekday 20 1 cup every weekday
for year 1,040
Discretionary/controllable costs can make a
difference in your future!!
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So whats another 1,040 when youre already in
so much debt???

• ?If you use a credit card or a student loan .
• ? If there is capitalization .
• ? If it is paid off over 10 years .
• ? ? It could cost 3,000
• THE MORE YOU BORROW, NOW, THE FARTHER YOU ARE
  FROM REALIZING YOUR FINANCIAL GOALS/DREAMS!!!!

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Latte Savings ..

• Latte price 4
• Lattes/month 20
• Years 4
• Rate of return 8.5
• Source www. bankrate.com

• Home coffee 1
• Monthly savings 60
• Savings after 4 years
• 3,417

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What Can You Do, Now????

• ?This is the time to focus on your financial
  HEALTH/WEALTH by minimizing educational debt
• wealth is a marathon .. Dave Ramsey
• ? Lifestyle live moderately, now ..
• ? Try to live on less than (standard) student
  budget
• ? Focus on your financial goals

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Facts Regarding Graduate Students Credit
Card Debt!!

• In 2006 - 92 of graduate students at least one
  credit card
• - 4 decrease from 96 in 2003
• Average outstanding balance 8,612
• - increase of 10 from 2003 average of 7,831
• 94 used credit cards to pay (some portion) of
  direct education expenses
• - primarily textbooks
• 67 of graduate students took out first credit
  card as an undergraduate student.
• 93 TRY to keep their credit card debt under
  control by making at least the required minimum
  monthly payments
• - only 20 said they pay off their cards IN FULL
  each month
• Source Nellie Mae

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Facts Regarding General Financial Issues

• 56 of senior college students carry four or more
  credit cards, with an average balance of 2,864.
  (Washington Post-2007/Nellie Mae)
• On average workers between the ages of 25 to 34
  must spend 25 cents on every dollar earned on
  debt repayment. (Strapped Why Americans 20 and
  30 Somethings Cant Get Ahead, Tamara Draut,
  2006)
• The number of 18 to 24-year-olds declaring
  bankruptcy increased 96 in 10 years. (Richmond
  Credit Abuse Resistant Education (CARE) Program).
• 2007 foreclosures rose by 75 from 2006.
  (RealtyTrac.com 2008)
• 49 of adults say they are concerned they have
  not paid enough attention to managing their
  finances. (Harris Poll 22, 2007)
• 48 are concerned they don't know enough about
  financial planning. (Harris Poll 22, 2007)

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Helpful Websites .

• www.bankrate.com
• www.myfico.com
• www.annualcreditreport.com
• www.optoutprescreen.com
• www.equifax.com
• www.experian.com
• www.transunion.com
• www.quicken.com
• www.tcalc.com/calculators.asp
• www.simpletuition.com

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Bibliography ..

• Morris, Kenneth M., Siegel, Alan M., The Wall
  Street Journal Guide to Understanding Personal
  Finance. 1997. New York Lightbulb Press, Inc.
  and Dow Jones Co.
• Warren, Elizabeth, Warren Tyagi, Amelia, All Your
  Worth, The Ultimate Lifetime Money Plan. 2005.
  New York Free Press.
• Strauss, StevenD., Jaffe, Azriela., The Complete
  Idiots Guide to Beating Debt. 2000. Indiana
  Alpha Books.
• Morris, Kenneth, M., Siegel, Alan, M., and
  Morris, Virginia, B., The Wall Street Journal
  Guide to Planning Your Financial Future. 1998.
  New York Lightbulb Press, Inc. and Dow Jones
  Co.
• Orman, Suze. The 9 Steps To Financial Freedom.
  2000. New York Three Rivers Press.
• Klosowski, Allen, CFP. Personal Financial
  Fitness, A Practical Guide to Improve The Health
  of Your Wealth. 1997. Menlo Park Crisp
  Publications.
• Singletary, Michelle. Picking a Financial
  Planner Takes Some, Well, Planning. The
  Washington Post 19 August 2001 p. H01
• Quinn, Jane Bryant. Making the Most of Your
  Money. 1997. New York Simon Schuster.
• Dominguez, Joe, and Robin, Vicki. Your Money Or
  Your Life. 1992. New York Viking Press.

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THANK YOU!!! Mary B. W. Fenton, M.A. National
Executive, Health Professions Graduate
Schools American Student Assistance 1-800-999-9080
ex. 2199 mfenton_at_amsa.com www.amsa.com
American Student Assistance 100 Cambridge
Street, Suite 1600 Boston, MA 02114
[phone] [phone] F A X (800)
999-0923 T D D