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Love Your Money

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People are willing to do a lot for someone they love such as try new things, change their style, and even relocate.  However, what are they willing to do for their money?  Sometimes it can be misplaced, torn up, abandoned, left unprotected, and even thrown away on insignificant things.  What if you treated your money as special as you would treat someone you love?  Things you may do are…

Make Time For It

When you love someone, you may hang out more and more and structure your day around him or her.  How much time do you take for your finances though?  Try carving out some time in your day or week to:

Just like relationships, your money can flourish if you put in the time to get to know it and make a point to include it in your everyday living.

Show It What It’s Worth

You may buy flowers or gifts, go out to a nice dinner, and even spoil each other to outwardly show your love and communicate your significant others’ worth to you.  However, the cumulative cost of junk food, drinks at the bar, bank fees, and other spending that will seem insignificant further down the road when you’re going to purchase a new car, have a child, or retire.  Instead, show money its worth through:

  • Smart shopping (i.e. sales, coupons, and discounts)
  • Memorable spending (i.e. experiences in place of material goods)2
  • Mindful prioritization (i.e. saving for a coffee maker later instead of a cup of coffee now)

Prioritize It

As relationships progress, your significant other becomes a bigger and more important part of your life.  This may lead to changes in how you structure your day, the traditions you create, and the sacrifices you make for the betterment of the relationship.  Likewise, your financial priorities change throughout life and become more and more necessary in order for you to accomplish your financial goals.  Some current wants may need to be cut back in to make room for saving up for more special wants (i.e. vacation) and future needs (i.e. house payment).  Steps to prioritizing your spending to enhance your financial relationship:

  1. Brainstorm financial goals
  2. Make your goals SMART3
    1. Specific (what why and how)
    2. Measurable (set dollar amounts)
    3. Attainable (realistic)
    4. Relevant (fits with bigger picture and your other goals)
    5. Timely (set dates)
  3. Calculate how to achieve your goals
  4. Tweak current budget and spending accordingly
  5. Find an accountability partner

Protect It

We want to do everything to protect the one we love both physically as well as emotionally from any pain.  Sometimes, life happens and we do the best we can to build back up and heal.  There are many ways to protect your money such as having an emergency savings to cover unexpected expenses and prevent debt or outrageous interest costs as well as consistently monitoring for identity theft and bank fraud.  Emergency savings should have 3-6 months’ worth of money in a relatively easily-accessible account to cover such things as medical bills, car repairs, or a loss of job.  You can monitor your credit through pulling a credit report at least every 4 months (https://www.annualcreditreport.com) and can protect from bank fraud by review your bank statements and utilizing credit card EMV technology when you can4.

Be Patient With It

Rushing into things can sometimes end up bad and sometimes the best things in life take time and hard work.  Your money probably won’t grow overnight (barring lottery winnings and surprise inheritance), so you’ll need to be patient with it and continue to nurture it.  Interest rates are most beneficial over time and frequent changes in investments may not pay off.  The market changes every minute, but despite dips and turns, a lot of investments pay off if you are patient and wait out the lows.

Commit

So you’ve spent some time together, you’ve gotten to know him or her more, and you’ve decided that he or she is worth prioritizing.  The next natural step is to decide whether you want to stay together in the future and beyond.  Rather than staying focused on the present, you may make a commitment for the long-haul.  Similarly, this may be something beneficial to do with your finances.  Picture your life with it in the future and what you want that to look like.  You’ve mastered saving for emergencies and upcoming trips, now what about for retirement or future children’s educational expenses?  These decisions come with more of a commitment due to the limitations on their spending, but can be truly beneficial in the future should you follow through on the commitment.  Time is your greatest ally in the realm of saving and investing.

Resources

  1. http://www.k-state.edu/pfc/planning/Financial%20Goals%20Worksheet%20-%20Specific.pdf
  2. http://www.forbes.com/sites/hbsworkingknowledge/2013/08/05/want-to-buy-happiness-purchase-an-experience/#34522db1704d
  3. http://freefrombroke.com/guide-setting-smart-goals-finances/
  4. http://blogs.k-state.edu/pfc/2015/10/05/credit-cards-are-changing-are-you-ready/

Christyne Stephenson
Peer Counselor III
Powercat Financial Counseling
www.k-state.edu/pfc

Amazon Prime: Is it worth it?

“Hey, give me your money,” said Netflix, iTunes, and online shopping shipping costs. As college students, there is a good chance that these expenses are present in our lives. However, Amazon Prime has made it possible—and affordable—to provide students with instant streaming of thousands of movies and TV shows, access to over a million songs, and free two day shipping.

If you’re like any other student, you seek out every entity possible providing students with a discount. Amazon Prime offers a 50 percent discount to college students. This makes Amazon Student Prime a one-time payment of $49 for a year-long membership. If you do the math, that totals out to a little over $4 a month, which is half the cost a month of Netflix.

Textbooks: an unavoidable cost for college students. Amazon advertises students can save up to 90 percent on textbooks. Begin by typing the ISBN number of your book into the search on Amazon.com. You may find the book is offered for a much lower price, to either rent or buy, on Amazon compared to other bookstores. You can use the money you’d be saving in your budget for books to purchase Amazon Student Prime, and receive your books in two days!

Other services built-in with Amazon Student Prime include free release-date delivery on video games, unlimited photo storage, exclusive early access to Lightening Deals, and free books each month through Kindle First. If any of these forms of entertainment are important to you, this could be a good investment. Another unique feature is the opportunity to share your account. This allows you to share the Amazon Student Prime services with family members in the Amazon Household, which qualifies one other adult and four children. Once you invite them to join your account in your settings you can successfully share your prime membership, regardless if they are a student or not.

To help you decide if Amazon Student Prime is right for you, there is a free six month trial. Unfortunately, during the free trial you will not be allowed to utilize the free movie and TV show streaming. After the free trial is over, if you wish to not purchase Amazon Student Prime, make sure you discontinue your account. If you do not discontinue your account, you will be automatically charged $49 for a year-long membership.

In conclusion, you have nothing to lose—including money—to at least try Amazon Student Prime. During the free trial, you may find yourself saving money, or it is possible you will find yourself barely using the different services. Whichever decision you come to, make sure it is the right one for you financially. For other financially savvy decisions visit Powercat Financial Counseling for a free and confidential peer-to-peer consultation.

Allison Becker
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Lose Excess Spending:  Financial Fasts and Financial Diets

Ever get to the end of the month and wonder where your money went?  Being in college offers not only the opportunity to become financially independent, but it also brings opportunities to squander your money away.  In our society, many social events are centered around eating and this holds true on campus as well.  However, spending money on eating out can be just as unhealthy as the food you get when eating out.  Two ways to begin exhibiting better money habits are by going on a financial fast or starting a financial diet.  Both require you to differentiate between needs and wants and can help you begin to understand what to spend money on and when it may be better off saving.

Financial Fast

A financial fast is a shorter but more intense way to kick-start better money habits.  The financial fast lasts 21 days and limits your spending to only the bare essentials to living.  Items considered essentials include bills (i.e. rent, utilities, etc…), gas to get to and from school or work, groceries meant to sustain your body (i.e. not chips or soda), and medications.  This list will be different for everyone and requires you be realistic about what is a need.  The financial fast also entails spending only in cash and recording every transaction as it’s made, justifying the need.  You can use a checkbook or debit card register, a notebook, an excel sheet, or apps such as www.Mint.com to record your transactions.  Recording your transactions helps keep you accountable to the fast as well as gets you to think about your needs and wants.  A financial fast can be beneficial to do before beginning a financial diet because it immerses you more into learning what areas are and aren’t flexible.

Financial Diet

A financial diet, on the other hand, is more prolonged and allows you to be creative with your spending.  First, know what is a need and what is a want.  From there, brainstorm ways to reduce or eliminate your spending in certain categories.  Don’t be afraid to get creative.  Use what you already have and look for DIY projects.  Similar to the financial fast, spending in cash and recording your transactions can provide you even more awareness and accountability of your spending.  Below is a non-exhaustive list of examples in which you can cut spending sorted by category.

Food

  • Limit the number of times you eat out (i.e. once a week)
  • Prepare meals at home
  • Bring your lunch (and any snacks you’ll need throughout the day)
  • Split entrées when you go out to eat (make sure to know what extra charge may be assessed for doing so)
  • Ask if the restaurant does half-orders
  • Sign up for coupons at places you frequently eat

Entertainment

  • Check out books or movies from the school or public library
  • Drink with friends at home rather than spending money in Aggieville
  • Utilize services such as RedBox or Netflix instead of going to the movies
  • Invite friends to go to the park or have a game night at home

Transportation

  • Walk or ride your bike
  • Carpool
  • Stay on campus between classes instead of driving back home and back to campus again
  • Use the ATA Bus

If you don’t succeed at first, that’s okay.  It’s not easy to change your lifestyle right away and like other diets, it takes time as well as requires you to tweak it until it fits for you.  Consider finding a friend to participate with you and hold each other accountable.  Once you find success, think about what to do with your extra money.  You can use it to pay down debt, save up for emergencies or upcoming trips, or even think about investing it.  The first step though is to be healthier and lose the excess spending.  Check out our Twitter in the coming month to read more tips on saving money.

Sources:

Christyne Stephenson
Peer Counselor III
Powercat Financial Counseling
www.k-state.edu/pfc

Invest in Your Future

Investing may seem like a foreign concept, however, you invest in yourself every day. By investing your time studying, you hope to achieve a better grade than say spending an evening in The Ville. Simply being here at K-State is an investment. By spending thousands of dollars today, you hope to have a higher salary than you would with a high school diploma. Much like these forms of investing, financial investing occurs with the hope that if one puts a little money away today, there will be more money in the future. The financial markets can sound like an intimidating, scary, and complex world, but with a better understanding of some of the underlying terminology, you can gain a better grasp of how they operate and one day be able to invest in yourself financially.

Financial Market

A financial market is any marketplace where buyers and sellers trade assets such as stocks, bonds, commodities, and derivatives. In today’s world most of these transactions take place online and an individual can get involved by setting up an account with an online brokerage firm, such as E*Trade, Schwab, or Scottrade.

Stocks, Bonds, and What??

Stocks, bonds, and derivatives are all financial instruments, but they all come with various advantages and disadvantages. Stocks are a financial asset that give you partial ownership of a corporation. When you purchase stock in a company, you are entitled to some of their earnings which come in the form of dividends, however companies are not required to pay dividends. Stocks are extremely volatile and their prices fluctuate often as the market fluctuates. While historically stocks have performed well, the return is not guaranteed. These factors make stocks extremely risky, however the return on your investment is approximately 5% greater than the return for bonds.

Bonds are a debt instrument, thus when you purchase a bond, you are lending money to the government, a municipality, or a corporation. When you buy a bond, or give out a loan, you make your return by earning interest. Bonds are less risky than stocks for several reasons. Unlike stocks, when you purchase a bond the issuer promises to pay back the face value, or the amount you purchased the bond for. The amount of interest earned is also backed by a promise from the issuer and the interest rate is often fixed. Historically the bond market is less vulnerable to changes in market price.

There are hundreds of financial instruments out there including derivatives, options, futures, CDOs, and swaps. These assets are more complex than stocks and bonds. For more information on any of these financial instruments, you can go to www.investopedia.com.

Market Indexes

In the news you may have heard phrases such as “the Dow drops 600 points” or “the S&P 500 soars.” The Dow Jones Industrial Average and the S&P 500 are both examples of stock market indexes. A stock market index simply measures the value of a section of the stock market. The Dow and the S&P 500 are two of the most widely analyzed indexes. The Dow Jones index includes 30 of the largest and most influential companies in America. Since it includes some of the most well-known companies in America, the Dow usually corresponds to changes in the entire marketplace, though it may not be on the same scale. The S&P 500 is made up of 500 of the most widely traded stocks in the U.S., and it represents approximately 70% of the total value of the U.S. stock markets. Since it is more diverse, it generally gives a good indication of the overall movement in the U.S. marketplace. Points for these indexes are simply a whole number in the index value used to more easily measure the increase or decrease in the indexes.

Portfolio

A financial portfolio includes all of the investments you have, whether that includes stocks, bonds, or other financial assets. In order to minimize risk, your portfolio should be diversified. It should include different types of financial assets, all with varying risks and maturities. For example, a diversified portfolio may include riskier investments such as junk bonds or stock in a new company as well as government bonds and stock in a well-established company. It is also important to invest across market segments (technology, energy, etc.) rather than put all of your investments in one industry. Risk is important to reduce, however, the lower the risk, the lower the return. Vanguard has created some model portfolio allocations (https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations). These allocations show varying types of portfolios and the historical risk and return associated with each. Many advisors recommend investing in riskier assets when you’re young, such as stocks, and investing in safer assets as you near retirement, such as bonds.

What now?

The best way to invest smart is by understanding the markets and being knowledgeable about the financial world. Paying attention to the financial news today, even if it is just looking at an article a week, will help you gain a better understanding for when you’re ready to invest. The Wall Street Journal, Google Finance/Yahoo Finance, and other credible news sources are all excellent ways to stay up-to-date in what the market is doing. Investopedia is also a great source for understanding different aspects of the financial world. As with most things, practice makes perfect. Luckily, there are several free stock market simulators out there to help you gain a better understanding of how it works without risking your own money! Investopedia Stock Simulator, Virtual Stock Exchange, and Wall Street Survivor are some of the most popular simulators out there. By expanding your financial knowledge and seeing how the market operates, you will be able to make smarter financial decisions and be prepared to invest in your future.

Sources:

http://www.vdmtrading.com/2010/05/top-6-best-stock-market-simulators.html
www.investopedia.com

Jillian Taylor
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

How to Make the Most out of Your Internship: Financially

As the semester winds to an end, many K-Staters look forward to a summer full of sun, friends, and internships! Internships are an excellent way to gain valuable experience for your future career and to begin applying what you have learned in the classroom to the real world. Depending on your field and the location of your internship, an internship can range from unpaid to beaucoup bucks. Whether you are struggling to make ends meet or don’t know what to do with all that excess money, here are some tips to help reduce your financial stress over the summer so that you can make the most of your internship!

So Your Internship is Unpaid, Now What?

Unpaid internships are the norm in some industries and may be your only option to get the experience needed to jumpstart your career. An unpaid internship may seem scary, however, here are several ways to make help make ends meet. Remember, there are countless other ways to reduce your cost of living during an internship that can be found in the resources listed below.  The main ways are budgeting, eating in, and commuting differently.

Budget

Budgeting is a key skill that helps eliminate unnecessary stress in your daily life, especially when you’re tight on money. By being aware of how much money you have, whether that is through savings, a part-time job, or another source of income, and how much your expenses are expected to be, you can reduce the stress that comes with uncertainty. With budgeting, you can also establish your needs versus your wants and start cutting back in your “wants” category or by finding less expensive ways of obtaining these wants. For instance, without school in session, you may not need internet. You might be able to fulfill your social media and web browsing desires by taking your laptop to a location with a free Wi-Fi spot. For help finding free Wi-Fi, download the Free Wi-Fi Finder from the app store! To help make some of your “wants” easier to obtain, there are several discount sites, such as Groupon out there that offer daily discounts for up to 90% off of fun things to do in many cities.

Eat In

When you’re working all day, it can be really tempting to grab some fast food or dine out. Eating out can cost over 50% more than eating the same meal at home. It may seem impossible to cook at home, however, there are several options to help ease this burden! First off, if you prepare meals in advance and in bulk, you can have meals ready to eat in seconds of coming home from your internship! Depending on where your internship is, you may not have enough time to go all the way home for your lunch break. Instead of vending machines or fast food, bringing your lunch to work can save you money and give you more time to relax.

Commute Differently

Driving might be the quickest and easiest form of transportation, but gas can add up, especially if you have a long commute. If you live close, you can try biking or walking to your internship, both of which are free and great for you and the environment! If you live farther away, you can opt for carpooling with a fellow intern, or utilizing public transportation such as a bus system or subway.

What to Do With a Paid Internship

On the other end of the spectrum is the paid or partially-paid internship. With this, you probably are not worried about how to make ends meet over the summer, but you may have questions about what to do with the extra income. Below are some few smart ways to not allow these dollars to go to waste!

Create An Emergency Fund

You never know when something unexpected might happen and it’s important to establish an emergency fund before that time comes. An emergency fund is money you set aside that would cover approximately 3-6 months’ worth of living expenses. You would only tap into this fund in an emergency such as unemployment or car troubles. Saving up for this now will save you debt and stress in the future.

Reduce Your Student Loans

Whether you have $50 in excess or $5,000, any amount you can put towards your student loans will help you in the long run. Most student loans start racking up interest the minute you accept the loan, so the more you pay off now, the less you will owe down the road. You can also put this extra cash towards your tuition, which means fewer loans you’ll have to take out over all. Both of these options are great ways to reduce your student loan debt!

Obtain Your Financial Goals

If you’ve had a goal in mind that you’ve been working towards, it’s okay to treat yourself! Whether that’s paying off a car loan, getting a pet, studying abroad, or finally buying that Apple Watch you’ve had your eyes on…  It’s okay to splurge a little as long as you are still able to meet your expenses.

Paid or un-paid, an internship is an amazing opportunity to take advantage of! These once in a lifetime opportunities will allow you to apply your knowledge and get a leg up when it comes to a future job. With your finances in check, you will reduce your stress and be able to maximize your internship experience.

Resources:

http://college.usatoday.com/2011/06/02/5-ways-to-live-on-an-unpaid-intern-budget/
http://internjustice.com/2013/07/11/how-to-survive-the-unpaid-internship/

Jillian Taylor
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Be Your Own Business

We continually look for ways to grow as individuals and establish ourselves. The world we live in now revolves around us going to school, getting a job, buying a car, buying a home, getting married, and possibly creating a family. We are surrounded by our family, friends, and millions of businesses. A business is considered an entity that is either commercial, industrial, or professional. When we hear the word ‘business,’ we typically think of an organization that offers a product or service. But has anyone ever thought of themselves as their own business? As an entrepreneur? We go our whole life trying to make a living to take that next step towards our short and long term goals. We generalize ideas, take steps, create a process, and attempt to follow through with those ideas like any business would. To successfully be your own business or an entrepreneur, you must think logically and take careful considerations when thinking about your financial position and how to obtain your goals.

To be your own business or an entrepreneur, one must start early to plan their short and long term goals. Develop a realistic plan of how you want to obtain your goals and when it could possibly be reached.  For an example, if you have student loans, you can start paying them off now while in school and become that much closer to paying your debt off. The closer you are to that, the closer you are to buying that first home, or the car you have always dreamed of.

Start thinking early about your credit. To get any kind of loan, one needs good credit. Some employers even look at your credit to see if you are financially responsible. That one number can say a lot about someone and can even be a factor that contributes to your employability. To start establishing credit, you can ask to be added to a relative’s source of credit until you have enough to get a credit card of your own, or you can apply for a secured credit card.

Although you are young at this point in your life, you also need to start thinking about retirement and savings for the future. Start contributing a small amount of your paycheck to your savings each month, or make sure to max out the contribution your employer will offer to your 401(k) plan when you get a job.

If you need help to get on the right track of becoming your own business or an entrepreneur, Powercat Financial Counseling will assist you in a free, friendly, and confidential environment.  You can create an appointment at http://www.k-state.edu/pfc/services.

Doni Lee
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

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