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Author: roxanne

Top 5 Hidden Costs of Your First Job

1. Clothing

Your favorite jeans and college t-shirt work great when you’re heading to class, but once you enter the workforce you may have to beef up your wardrobe. Depending on the industry you go into you may be required to wear business professional or business casual attire every day. Purchasing these types of clothing doesn’t always come cheap.  About.com estimates that men will spend $125 a month on their professional work wardrobe. That totals up to $1500 annually.

2. Transportation

Depending on what city you work and reside in, other costs of your commute may arise. After you graduate you may need to upgrade your vehicle which will increase costs of auto insurance, loan payments, etc. Transportation costs may also include stress and time away from family or other activities depending on the distance or traffic of your daily commute.

3. Eating out

Even though you may plan on bringing lunch to work most days, you may be obligated to go out to lunch. Many employees treat lunch as a time to network with clients or discuss business. Spending a minimum of $20 a week on business lunches or dinners can end up costing you $1,040 a year. This being a low estimate increasing lunch outings can really add up over time and end up decreasing the amount of money you have to spend on other discretionary items.

4. Travel

With some jobs you may be required to travel. Whether this means traveling locally to meet clients, or traveling across the country, these costs can reduce your discretionary income.  Many firms will reimburse you for travel expenses, but you may have to pay the upfront cost. There are also expenses associated with traveling that your firm may not compensate you for such as time away from your family, meals, and traveling essentials.

5. Taxes

Most people don’t consider taxes when they enter their first job but it is something to be aware of. When you earn more money you may be pushed into a higher tax bracket. This is especially true for students entering their first job who have formerly filed as dependents of their parents. In 2012 those filing as Single on their tax return earning $8,700 to $35,350 were taxed at a rate of 15%. If you earned $30,000 last year you would have been taxed roughly $4,500. As your income increases your tax bracket increases, which means you may end up forking a good chunk of your income over to Uncle Sam.

 

Although that new job offer may sound great, it is always good to look into the hidden costs. Comparing these costs and your compensation is a great way to find out if you need to further negotiate your salary. When looking at an offered salary it is important to analyze the extra costs that take away from your discretionary income in order to accurately evaluate the offer. Budgeting for these extra expenses can help you in not being caught off guard when they arise.

 

Sydney A. Henderson
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Evaluating Employee Benefits and Perks

When considering a job offer, many people think the most important factor is the salary. Actually, it is just as critical to analyze the ‘secret’ money – benefits and perks that are offered by an employer. Some benefits to consider include a comfortable and casual work environment, flexible work schedules, an option to telecommute, gym memberships, tuition reimbursement, and a casual dress code.

Typical Employee Benefit Packages

According to the Bureau of Labor Statistics, the average number of annual paid holidays is 10.  Paid leave time also can include sick and maternity leave. Almost half of medium and large employers offered either a defined benefit or a defined contribution pension plan. But they may have some requirements. For example, you can join the plan after working a required number of years for the company. Or you must work for the company a certain number of years before you become “vested” and own the company contribution portion of your plan.

Every company has different requirements when they offer health insurance.  Some may require an initial premium payment  after which, the policy itself will cover you and your family.  Be sure when making insurance selections that you know whether or not the plan will include dental, vision or disability coverage and whether or not there will be any out-of-pocket expenses. Life insurance is also a common benefit associated with most insurance solutions. Employers usually provide an amount equal to a percentage of your annual salary for insurance needs with an additional option to purchase life insurance when necessary.

How to Evaluate Perks

Employers believe that an advantageous way to attract top employee talent is offering perks and benefits outside of the initial base salary. However, not all benefits are necessarily the best fit for you. The true value of perks being offered from the employer should be determined not by the overall quantity or dollar value, but by the benefits that make a true impact on the lifestyle you live. As an example, if living an active healthy lifestyle is important for you as an employee, it may be valuable to look for companies that offer gym memberships to employees. An extreme example of this would be looking for companies that have a gym inside of the office as this perk is becoming more and more popular in the modern day workplace.  Another example of perks would be companies that offer a flexible work schedule. If you are not a morning person, being able to come in later and be more productive creates a win-win situation for both parties! Just remember, when a company is a better fit for you, you are also a better fit for them.

 

Angela Li
Peer Counselor I
Powercat Financial Counseling
www.k-skate.edu/pfc

It’s almost time to graduate! Money tips for college graduates:

If this is your last semester at Kansas State University then there is no doubt that you are busier than ever.  You are sending out résumés, preparing for interviews, applying for graduation, and finally purchasing your cap and gown!  Everything you are doing now is exciting and your life is about to change dramatically as you transition from being a student to being a full-time employee.  As you’re building your career and life outside of college there will be many financial decisions that you will need to make.  Here is a list of a few things to consider as you prepare for graduation and beyond.

How are you going to manage your debt?

Many students will graduate with student loans that need to be paid off.   The first step you will want to take as you get close to graduating is to find out who your loan servicers are and set up accounts with them.  Your loan servicer is the company that hosts your loan and who you will be making payments to.  After you have set up an account you will want to decide what kinds of payments you will want to make, such as standard or graduated.  Powercat Financial Counseling has brought SALTmoney.org to Kansas State University students and alumni and this is a great interactive website to use to understand what your loan payments will be.

Do you know your credit score?

Your credit score is a number representing your creditworthiness based on past and current credit files.  The range of credit scores is from 300 to 850 and new graduates need to be aware of the dangers of a poor credit score.  Bad credit will make it hard to get an apartment, car loan and even a job.  There are many ways to build your credit score, but one simple way is to make all payments on time and never miss a single payment.  You can view your (unofficial) score for free anytime at www.creditkarma.com.

Do you have a budget?

Upon graduating college and obtaining a job you will start to have a lot more income, but also more expenses.  It may be hard to begin managing your money and new expenses so it is a good idea to start sticking to a budget.  A budget is not meant to have a negative connotation; it is simply a way to control your money instead of letting your money control you.  If you would like to start forming a budget Powercat Financial Counseling has spending plan worksheets available online at www.k-state.edu/pfc/budgeting.

Will you start saving?

Hopefully when you graduate you will begin to have money available for savings, and your employer is likely to offer retirement plans such as 401(k)’s.  If your company will offer to match your contributions to your 401(k) then you should take this opportunity, it’s basically free money!  Another reason to think about saving as soon as you graduate is that interest on your savings grows exponentially so the sooner you start saving, the more you will have when it comes time to retire!

Are you insured?

Students used to be removed from their parent’s health care insurance immediately after graduation; however under the Affordable Care Act of 2010, parents may now keep their children on their insurance until age 26.  This may be a relief to a few of you because it gives you a little more time to build up income before you must pay for your own insurance.  As you graduate and accept a full time job you will want to assess your company’s health care plan and talk with your parents about whether or not you will stay under their plan for a little longer.

 

There are many other decisions that will need to be made around graduation time and countless other questions that you may have, but hopefully this list will help you get started thinking about your financial future! For further questions, please request an appointment at www.k-state.edu/pfc!

 

Wende Witthuhn
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Marriage & Money

There are a lot of things to look forward to and be excited about when planning a wedding and ultimately a marriage. The financial aspect of a marriage can be complicated and the most stressful. Last week, February 28th and March 1st, we held two seminars that hopefully helped soon-to-be marrieds feel a little more at ease with their upcoming unions; at least the financial part of it.  🙂

As a reminder to those who attended and for those who were not able to attend, I would like to present some of the key points from the event:

1)     Effective communication is KEY:  I know some people will read this and think I am being a bit touchy-feely about this, but I promise you that if you want your conversations about money (or really anything for that matter) to be effective, you want to make sure you understand where the other person is coming from. You want to remember that what one person thinks is erratic behavior, the other may think it is perfectly normal. One person may love to eat out and enjoy spending their money that way while the other might think that is an enormous waste.  In financial matters it is so important to be united. Did you know money disagreements are the top cause of divorce in our country? Once you feel you understand each other, not necessarily agreeing with one another, then progress can be made and compromise can happen.

2)     Having the same goals:  There are a lot of things to plan for: buying a home, funding your children’s educations, vacationing, retirement, etc.  How do you decide which ones are the most important? Communication.  Once you have established common goals, you need to plan, prepare, carryout the plan, and then occasionally evaluate your progress and potentially re-prioritize.

3)     Budgeting: This is so critical.  I don’t know many people who reached any goal in life on accident or without any preparation.  Budgeting helps you bring your behavior in line with the goals for which you are striving.  Remember to regularly review your budget and make corrections as necessary.  Check out our website for some budgeting tools: http://www.k-state.edu/pfc/budgeting/

Marriage is great, but it can be a challenge. If you follow these principles you will have managed the financial challenges that can arise in a marriage. Congratulations to all who are planning to get married and join their finances with their partner!

 

Sam Honey
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

 

There’s an App for That!

Between homework, quizzes, papers and exams, many students find that they don’t have much time left in their days to keep their finances organized. However, many apps are now available to help you keep track of your financial situation, without the hassle! Check out this list of apps that can help you out:

Mint.com (Free on Android, iPhone, and on the web) – Mint.com is a free, easy-to-use personal budgeting application. With Mint, users can monitor their online bank accounts and track their spending. Signing up at mint.com takes about 5 minutes and users can set up a budget, make goals, and track their progress. Mint is safe and secure and very user friendly. It has been named the Best Finance App by the 1st Annual App Awards.

Credit Karma (Free on iPhone) – Credit Karma provides free credit scores and free credit monitoring. With the Credit Karma app, you can check your credit score for free, from anywhere. There is no subscription or credit card required. Credit Karma will also alert you when something important changes in your credit report. This is a great way to protect yourself against identity theft. This app is currently only available for iPhones.

Pageonce (Free on Android and iPhone) –  Pageonce is a bill payment app that allows users to pay their bills from anywhere at any time. All of your account balances are readily available in one place for your convenience. Pageonce will also send reminders and alerts so you don’t miss a payment. Users can also track their frequent flyer miles, rewards, mobile minutes, and text and data usage.

Lemon Wallet (Free on Android, iPhone, and Windows Phone) – Lemon Wallet is an app that lets you store a digital copy of all the cards in your wallet on your phone.  This allows you to have a digital backup of everything in your wallet in case it is ever stolen, lost or misplaced. Lemon Wallet also provides a “Lost Wallet Service” that will provide you with an agent to help you with the process of cancelling your payment cards if your wallet is lost. All data entered into Lemon Wallet is encrypted and a PIN is required to access your cards. Also, you can remotely unlink the app from your Lemon account if you ever lose your phone.

 

Jamie Engelken
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Teaser Trouble

Have you recently received an offer for a credit card in your mail? Did the offer promise incredibly low interest rates, maybe even zero percent? That sounds like a great deal! However, remember that if something sounds too good to be true, it often is. The credit card companies are in the business of making money. So make sure to read the fine print before you make a decision.

Teaser rates, also known as introductory rates, are low interest rates that a lender charges you for a few months, or sometimes even up to a year, in the hopes of getting you to apply for and use their credit card. After the introductory-rate time period expires, the balance on your new card will be subject to a much higher interest rate.

Here are some credit card tips you should keep in mind:

  1. Typically the teaser rate will only last a few months, and occasionally up to a year. Before signing up for any card with a low rate, read the fine print to find out what the standard rate will be once the teaser rate period is up. These offers almost never clearly promote the standard rate, so you’ll probably have to look through the full terms to find out. Look for the APR rate, which is a standardized way of comparing yearly credit card interest rates.
  2. The credit card companies do not have to, and most likely will not notify you when the introductory rate expires. Be aware of this date if you intend to carry an outstanding balance on your card, because after this date your balance will be subject to the standard (higher) interest rate.
  3. Many individuals apply for cards with teaser rates so that they can transfer a balance from a higher interest rate credit card and, hopefully, reduce the amount of interest they are paying. However, when the intro period expires on the new card, they often find themselves right back where they started, paying a high interest rate because they couldn’t pay the balance in full.
  4. Consider the impact of repeatedly tapping promotional offers on your credit score. Too many open lines of credit, as well as too many recently opened accounts, can lower your credit score. The same can happen if you often close old accounts and open new ones to take advantage of promotional offers.
  5. If you would like to stop receiving unsolicited credit card offers in your mail, you are in luck! You can do so by following the link below to the Federal Trade Commission’s website, and follow the outlined steps: http://www.consumer.ftc.gov/articles/0262-stopping-unsolicited-mail-phone-calls-and-email

Credit cards can be very helpful, especially for students that want to start building their credit score. However, make sure to carefully read the fine print of the credit card offers, and follow the above tips to make sure your credit score or your wallet don’t take a hit.

 

Tomaz Bogovic, Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc
powercatfinancial@k-state.edu
785-532-2889

 

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