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Old 2019-02-02, 02:16   #1
jvang
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Default An Attempt at Financial Responsibility

My parents wanted me to do a practice budget for a typical month. I decided to determine how much money I'd spend in a month while at college.
  • Gas - Probably $10-20 depending on how much I'd ride around. I don't think public transportation is very big in Fayetteville, and at best there may be Uber service that I wouldn't normally need.
  • Food - No more than $50 per month, since food is covered in the cafeterias for free. This would only be for going out to eat with friends or something.
  • Phone bill - ~$50 per month, unless I can find a better deal (which would be nice!)
  • Medicines/prescriptions - I don't order this stuff too often, but $25 per month would be a good estimate for if I needed something like that.
  • Life insurance - $12 per month. I don't really get why I need this, other than to cover whatever expenses would come up if I were to die. No dependents or anything...
  • Auto insurance - It'll probably come out to $20-25 per month for a small motorcycle, which would be all I need.
So about $75 per month is recurring (and semi-necessary) costs, the other $100 isn't necessary cost. Now if I am not at school, the cost per month is about $1400 for everything, with food ($300), rent ($700 avg in Little Rock, 1 bedroom apt), and utilities (~$125) being the major additional costs. I could split the apartment and part of the food costs with a roommate or something, but otherwise it costs a lot to live in a mid-sized city with job opportunities.

Is there anything that I missed that would be significant? And maybe you feel like sharing your monthly costs to compare
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Old 2019-02-02, 02:22   #2
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Get started early with a financial management program. I have long used Quicken and have data going back 20 years. If you put in sensible descriptions of expenses you can easily find when you bought that GTX 480 (!) graphics card.
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Old 2019-02-02, 16:19   #3
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Quote:
Originally Posted by Chuck View Post
Get started early with a financial management program. I have long used Quicken and have data going back 20 years. If you put in sensible descriptions of expenses you can easily find when you bought that GTX 480 (!) graphics card.
+1
This cannot be overstated - knowing where you spend your money is crucial to financial mastery regardless of income. If you spend a few coins on a vending machine, note it. Note everything. After a while, you can comb the data for bad habits and behaviors you never consciously realized you have.

One other thing - start a retirement account as soon as feasible. Even if you save no more than ten bucks a week you are building the habit of a lifetime. Follow the old adage “pay yourself first”.
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Old 2019-02-02, 17:00   #4
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Originally Posted by swellman View Post
One other thing - start a retirement account as soon as feasible. Even if you save no more than ten bucks a week you are building the habit of a lifetime. Follow the old adage “pay yourself first”.
I meant to add this also. I went for quite a few years after I started working without saving anything. I wish I had started the small weekly savings habit at the credit union where I worked.

Once you accumulate a comfortable amount you can consider investing in a LOW-FEE NO-LOAD Index Mutual Fund (that means Vanguard).

I was sad to hear of the passing of Jack Bogle, the one-time CEO of Vanguard who invented the concept of index investing back when everyone else thought it was a joke.
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Old 2019-02-02, 17:23   #5
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And a 10% line item for savings. Dedicate 1/2 of that for short term (5 years and under use) and 1/2 for long term (10 years and onwards towards retirement.)
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Old 2019-02-02, 17:44   #6
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Are you sure the included cafeteria covers all meals and not just lunchtime? Sounds weird, are American colleges really that much more nannying than British universities? If you're spending $25 a month on aspirin to recover from hangovers it begs the question how much you're spending on booze. Life insurance with no dependents sounds odd. $50 per month on a mobile bill sounds nuts but I make a point of doing everything I can online, £5 a month sim-only is enough for the rest.


My biggest costs by far are accommodation and food. Then vehicle stuff, then utilities, then booze and whatever I'm doing at the time, then internet, then the rest.
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Old 2019-02-02, 21:09   #7
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Why life insurance early? Typical vehicle is universal life, which builds cash value, and in which time is your friend, and eventually you might want to borrow against that for some major purchase like a house. "The most powerful force in the world is compound interest." (It can work for you, or for someone else and against you.) With no dependents and not much income, you don't have a need for cheap term life to provide for a big lump sum to help get through life the nonexistent spouse and children if something bad happens to you and they can no longer count on your big salary carrying them through. Insurance rates are economical and your insurability is easy when you're young and healthy. For both whole life and financial investments, the most powerful thing is compounding of gains over a long period. Roughly, would you rather contribute to your personal financial investments, 10% of gross income from the start, 50% from ~age 45, or work almost until you die and are physically unable?

It may be even more important to budget your time than your dollars.

Some other suggested monthly budget items:
books, used $10, 10 hours (7 habits of highly effective people, how to win friends and influence people, law and medical general references, basic cooking, investing basics, etc)
some volunteer activity $0, 10 hours (helping paint a homeless shelter or something)
caffeine, nicotine, ethanol, controlled substances: $0, 0 hours
legal defense costs for charges you're guilty of: 0 instances, $0, 0 hours (no DUI etc)
gambling: $0, 0 hours
overeating, extravagances, risky behavior: $0, 0 hours
medical care, time as needed, cost minimal with student health center and coverage til 26 on parents' insurance and healthy living choices
software: $0 (open source; universities compete on bandwidth in dorms)
dating: $?, ?hours
sleep: $0, 240 hours/30 day month
other routine self-care: shower, brush teeth, hair care/cut, shaving, exercise, laundry, cleaning,...

One time items hopefully:
small first aid kits, for dorm room and motorcycle
helmet and other protective wear

I once took a spill on a bicycle. Stitches on my forehead, triangle tears in both palms, a hole through the shirt I was wearing and deep abrasion there, less severe elsewhere on bike and clothing, hospitalization overnight and off work ~ a week for concussion. Was wearing a Bell deep bicycle helmet, more coverage than modern helmets provide. You don't have to be going fast; asphalt is hard and abrasive. Another time I wiped out on some sand in a turn on asphalt. High leather top shoes prevented my ankle from getting ground down to the bone.

Last fiddled with by kriesel on 2019-02-02 at 21:16
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Old 2019-02-02, 21:37   #8
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Quote:
Originally Posted by M344587487 View Post
Are you sure the included cafeteria covers all meals and not just lunchtime? Sounds weird, are American colleges really that much more nannying than British universities? If you're spending $25 a month on aspirin to recover from hangovers it begs the question how much you're spending on booze. Life insurance with no dependents sounds odd. $50 per month on a mobile bill sounds nuts but I make a point of doing everything I can online, £5 a month sim-only is enough for the rest.

My biggest costs by far are accommodation and food. Then vehicle stuff, then utilities, then booze and whatever I'm doing at the time, then internet, then the rest.
Taking UW-Madison as an example, food service hours range from 6:30am to 1am. It's pay as you go. Many meals offered are oversized. https://www.housing.wisc.edu/dining/locations/ https://www.housing.wisc.edu/dining/residents/ https://www.housing.wisc.edu/residence-halls/billing/ middle tier meal plan plus academic year housing ~$11,000. This campus is miles in size (ignoring its distant satellite locations) so being able to eat on campus saves travel time. Daytime population (students and staff) of over 50,000, about twice Jarrow or Aldridge.

$25/mo could be the copay on prescriptions such as allergy meds, plus a multivitamin. It would be a LOT of aspirin/tylenol, dangerously so.

Last fiddled with by kriesel on 2019-02-02 at 21:51
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Old 2019-02-03, 14:15   #9
jvang
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Quote:
Originally Posted by M344587487 View Post
Are you sure the included cafeteria covers all meals and not just lunchtime? Sounds weird, are American colleges really that much more nannying than British universities? If you're spending $25 a month on aspirin to recover from hangovers it begs the question how much you're spending on booze. Life insurance with no dependents sounds odd. $50 per month on a mobile bill sounds nuts but I make a point of doing everything I can online, £5 a month sim-only is enough for the rest.


My biggest costs by far are accommodation and food. Then vehicle stuff, then utilities, then booze and whatever I'm doing at the time, then internet, then the rest.
Quote:
Originally Posted by kriesel View Post
Taking UW-Madison as an example, food service hours range from 6:30am to 1am. It's pay as you go. Many meals offered are oversized. https://www.housing.wisc.edu/dining/locations/ https://www.housing.wisc.edu/dining/residents/ https://www.housing.wisc.edu/residence-halls/billing/ middle tier meal plan plus academic year housing ~$11,000. This campus is miles in size (ignoring its distant satellite locations) so being able to eat on campus saves travel time. Daytime population (students and staff) of over 50,000, about twice Jarrow or Aldridge.

$25/mo could be the copay on prescriptions such as allergy meds, plus a multivitamin. It would be a LOT of aspirin/tylenol, dangerously so.
At the University of Arkansas, it's a couple thousand dollars per semester for unrestricted cafeteria access. Said meal plan is covered in the scholarship, which is convenient

I could cut some money off of my phone bill, but my dad doesn't want me to split costs with anyone else. And I like unrestricted/unlimited data, texting, and calling on my phone ("unrestricted" being a recurring trend here).

kriesel is correct on the prescriptions. I don't need refills monthly, but if I needed all my refills in a particular month then that's about how much it would be.

Quote:
Originally Posted by kriesel View Post
Why life insurance early? Typical vehicle is universal life, which builds cash value, and in which time is your friend, and eventually you might want to borrow against that for some major purchase like a house. "The most powerful force in the world is compound interest." (It can work for you, or for someone else and against you.) With no dependents and not much income, you don't have a need for cheap term life to provide for a big lump sum to help get through life the nonexistent spouse and children if something bad happens to you and they can no longer count on your big salary carrying them through. Insurance rates are economical and your insurability is easy when you're young and healthy. For both whole life and financial investments, the most powerful thing is compounding of gains over a long period. Roughly, would you rather contribute to your personal financial investments, 10% of gross income from the start, 50% from ~age 45, or work almost until you die and are physically unable?
This life insurance situation is very confusing to me. I don't know much about any "universal life" insurance, but I've heard that it wasn't a great deal compared to having term life plus normal investment of the remaining money or something. You are correct in that I have no spouse or dependents, so I'm pretty sure that it makes no sense for me to have it. My parents say "oh its only 11-12 dollars per month, it doesn't matter," but that's a couple thousand dollars over the 20 year term that it covers.

Quote:
Originally Posted by Chuck View Post
Get started early with a financial management program. I have long used Quicken and have data going back 20 years. If you put in sensible descriptions of expenses you can easily find when you bought that GTX 480 (!) graphics card.
Quote:
Originally Posted by swellman View Post
+1
This cannot be overstated - knowing where you spend your money is crucial to financial mastery regardless of income. If you spend a few coins on a vending machine, note it. Note everything. After a while, you can comb the data for bad habits and behaviors you never consciously realized you have.

One other thing - start a retirement account as soon as feasible. Even if you save no more than ten bucks a week you are building the habit of a lifetime. Follow the old adage “pay yourself first”.
I'll probably just use a spreadsheet utility like Excel or whatever Google has. My dad does something like that and it seems like it works

Quote:
Originally Posted by kriesel View Post
7 habits of highly effective people, how to win friends and influence people
I read those a couple of years ago, and still have them on my Kindle. They seemed pretty good, and I'll reread them again sometime when I'm bored.
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Old 2019-02-03, 14:58   #10
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Quote:
Originally Posted by kriesel View Post
...
$25/mo could be the copay on prescriptions such as allergy meds, plus a multivitamin. It would be a LOT of aspirin/tylenol, dangerously so.
I know it's a lot of aspirin, that was the joke.
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Old 2019-02-03, 23:17   #11
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Quote:
Originally Posted by M344587487 View Post
I know it's a lot of aspirin, that was the joke.
I had just read shortly before that, an account of a college student who sometimes left food out after cooking multimeal batches, instead of refrigerating it. Well, he got food poisoning, this time a bad one, after pasta sat at room temp for 2 days, ate it even though it tasted funny, tried to self treat with lots of pepto bismol and sleep, no liver transplant was available after his was destroyed with the infection and subsequent mass intake of bismuth subsalicylate, and he died, in a couple more days, very unpleasantly. There was a video prepared by the hospital detailing the case post mortem. Same article stated Reye syndrome is aspirin toxicity in children. Discontinuing use of aspirin in children has reduced Reye syndrome occurrence by 90% https://en.wikipedia.org/wiki/Reye_syndrome Mammals don't live long without a functioning liver.

Sometimes people choose to let freshly made food cool to near ambient before refrigerating. This is risky, especially if left too long. In the case of the dead college student, his roommate "helped" him by refrigerating it, after finding it out, not knowing it had sat for 2 days already. I've adopted the habit of leaving a fluorescent task light on in the kitchen until all newly prepared food is consumed or stowed. The light serves as a reminder there's more to take care of in the next hour.

There are some things students should be well aware of, as risks to themselves or peers. Food poisoning, ethanol and drug od, poor decision making while intoxicated, and encephalitis claim too many young people. UW-LaCrosse was losing intoxicated students regularly to the Mississippi River in close proximity to many bars there; stumble on the river walk, drown, and may be days before the body is found downriver. There are diseases that are paradoxically more deadly to young adults and are often mistaken for minor things until it's too late to treat or save.

Last fiddled with by kriesel on 2019-02-03 at 23:25
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