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Financial Budgeting, Income, Costs and Hints

The first step to avoiding the troubles of financial debt is to create and maintain a budget. It’s not as intimidating as it sounds, don’t worry.

First off, create a list of all your monthly income and also a list of your monthly expenses. When determining income, list all sources including alimony, child support, side jobs, etc. In calculating expenses, be sure to include housing, food, transportation, utilities, entertainment, etc. To gain an accurate reflection of actual expenses, sit down each night and write down expenses, just make sure to save receipts. Determine if your income covers all of your expenses. If the answer is no, then some expenses need to be reduced.

Adjust expenses. If it is a small discrepancy, it may mean reducing some minor expenses like entertainment or cell phone plan. If the deficit is larger, you may need to downsize your vehicle or living arrangements. If your income covers all of your expenses, you still may want to trim some of the excess fat off your spending habits. This can free up extra money for things such as vacations or college funds for your children.

Additionally, consider if you need to add new categories. Some areas that are often overlooked are debt reduction, emergency savings funds, and retirement savings. An emergency fund ensures there is an adequate amount available to cover unforeseen events (car emergency, etc), should it arise. This will eliminate the need for using credit which can quickly damage your budget.

There are several advantages to sticking to your budget. Firstly, most people have set financial goals that they would like to reach in the future. Sometimes it may be a trip, a brand new car, or a college education. A budget can help people save money to make these goals a reality. Additionally, many people are crushed under heavy consumer debt. Without a disciplined pattern of spending, it is virtually impossible to make much headway in reducing debt. A personal budget will provide the necessary framework to begin eliminating these inflated account balances.

If executed properly, a budget will allow a person to simultaneously meet their expenses, place money into savings, and pay back outstanding debts. Therefore, it is anyone’s best interest to create and implement a budget.

Financial Aid Award Letters 101

You have been accepted to college. Now, how are you going to pay for it?

For college-bound students and families, this is the moment of truth when they find out the amount of money being offered by a specific college. Each school will offer different award packages, which can include a combination of grants, scholarships, work study or student loans. Students and families should carefully read all of the information contained in the award letters and clearly understand the letters’ terms and conditions. Equally important, try not to panic if the amount of money awarded is not enough to cover college expenses.

“The financial aid award package is not the end of the road by any means,” says Martha Holler, spokesperson for Sallie Mae, the nation’s No. 1 paying-for-college company. “Never simply settle for a school based on cost alone. With roughly $143 billion in financial aid awarded last year, financial assistance is out there for students to attend their dream school.”

In addition to thoroughly reading each award letter received, students and families should ask themselves the following:

What are the enrollment requirements for grants and scholarships?

Are the awards for one year or all four years?

Is the required GPA to maintain the awards realistic?

If student employment is part of the financial aid package, what types of jobs are available and what rate of pay is typical?

“Above all, it is important for students to compare their award packages on an apples-to-apples basis,” says Holler. “While one letter may total a higher amount, it may be more heavily weighted with loans and not free money, like grants and scholarships.”

Holler adds that while most colleges rarely negotiate or match another school’s award package, they should be alerted if a family’s financial circumstances have changed. In that case, families should contact the financial office as quickly as possible for a reassessment.