michael rupured, m.s., afc extension financial management specialist college of family &...
TRANSCRIPT
![Page 1: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/1.jpg)
Dealing with Deficit SpendingMoney Management for
Graduate Students
Michael Rupured, M.S., AFCExtension Financial Management Specialist
College of Family & Consumer Sciences
![Page 2: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/2.jpg)
Objectives:• Help you think about your relationship with
money and if necessary, inspire you to change it.
• Give you a different perspective (perhaps!) on your investment in graduate school.
• Show you why using credit cards to finance your lifestyle is a bad idea.
• Take a closer look at your spending habits to identify opportunities for change.
• Explore strategies for managing and reducing different types of expenses
![Page 3: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/3.jpg)
Spenders vs. Savers
![Page 4: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/4.jpg)
Opportunity Cost of the Spending Lifestyle
![Page 5: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/5.jpg)
Investing in Your Future
![Page 6: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/6.jpg)
Deficit Spending for Grad School is Normal
![Page 7: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/7.jpg)
Maximizing Your InvestmentExample: Buy a $100,000 HomeMary puts $1000 down and finances the rest.Bill puts $10,000 down and finances the rest.Other than the amount borrowed, the loans
are otherwise identical.Ten years later, they sell for $120,000.Who received the better return on their
investment?
![Page 8: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/8.jpg)
Mary invested $1000 (plus payments) and ends up with $120,000 less the loan balance ($80,000) for a gain of $40,000.
Bill invested $10,000 (plus payments) and ends up with $120,000 less the loan balance ($70,000) for a gain of $50,000.
Who received the greater return on their investment?
![Page 9: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/9.jpg)
Mary’s initial investment of $1000 grew to $40,000 (40 times her initial investment)
Bill’s initial investment of $10,000 grew to $50,000 (5 times his initial investment).
![Page 10: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/10.jpg)
Credit Card DangersUsing credit cards to live beyond your means.Relying on creditors to set your credit limit.Carrying a balance on credit cards.Buying the wrong items on credit.Making only the minimum payment on credit
cards.
![Page 11: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/11.jpg)
Paying Off a Credit CardYou owe $1000Annual Percentage Rate (APR) is 18 percentRequired minimum payment: two percent of
outstanding balance.
If you only make the minimum payment, how long will it take you to pay off the balance?
![Page 12: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/12.jpg)
Three ScenariosPay only the 2% minimum and it will take 19
years and 4 months—including $1,931 in interest.
Pay $20 per month (the current required minimum) and it will take 7 years and 2 months—including $860 in interest
Pay $50 per month and it will take 2 years, including less than $200 in interest.
![Page 13: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/13.jpg)
Bottoming Out
![Page 14: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/14.jpg)
Where Does Your Money Go?
![Page 15: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/15.jpg)
Fixed Expenses
![Page 16: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/16.jpg)
Variable or Flexible Expenses
![Page 17: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/17.jpg)
Occasional Expenses
![Page 18: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/18.jpg)
Plan Spending to Meet Needs
![Page 19: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/19.jpg)
Reducing ExpensesInvolve the entire household.Give it up.Find cheaper alternatives.Economize.Use community resources.Barter and/or Coop
![Page 20: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/20.jpg)
SummarySpending is the default saving—you have to
learn to save.Spending more than you earn is normal for
grad students.Minimize the cost of grad school will
maximize the return on your investment.Credit card debt is more expensive than you
might think.A spending plan is a tool to make sure your
money goes where you want it to go.
![Page 21: Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences](https://reader036.vdocuments.net/reader036/viewer/2022062519/56649ec05503460f94bcafce/html5/thumbnails/21.jpg)
To spend is human, to save—divine!