Kansas State University

search

Powercat Financial

Author: ekoochel

New Year’s Resolutions That Will Save You Money

Posted on by ekoochel

Image result for new years resolution and money

Let’s be honest with ourselves, most everyone creates a New Year’s resolution each year, but very few of us actually stick to those commitments. Whether it is to work out or study more, it always seems like at about the three week mark those goals start slipping away. Setting realistic and achievable goals are the most important aspects of creating a resolution and could help you stick to it for a longer period of time. Money normally grabs everyone’s attention and with that being said, here are few money-saving New Year’s resolutions that are reasonable but will require continued progression throughout the year.

  1. Become debt-free

We are going to start with the big one first – freedom from your debt. Whether or not this is a realistic goal will depend on your situation and determining your financial situation. What type of debt you hold (credit, car loan, mortgage, etc.), what are the interest rates associated with each, and your income level will all determine how quickly you will become debt free.

It is often helpful to start targeting the debt with the highest interest rate first and so on. That will commonly be your credit card debt, which could have an APR of nearly 15% – 20%. It may also be helpful to pay the smaller debts off first to build some confidence going forward. Saving a few extra dollars each month could go a long way to freeing you from this debt.

  1. Discover ways to generate a side income

Finding extra income could be a great resolution that is very much achievable. Having excess spending money at the end of each month could free you up and relieve the financial burden from your shoulders. Even an extra hundred dollars a month could be a great way to reach other goals that you have and prepare yourself for the future.

Signing up to be an Uber or Lyft driver, finding a weekend job, or becoming a tutor are a few ways you could possibly earn some extra cash.

  1. Start an emergency fund

If you want to sleep better at night, building an emergency fund might be a great way to do that. You never know what tomorrow will bring so planning for those risks ahead of time could save you from in trouble in the future. One way you could start doing this is by saving an extra $75 dollars a month and putting it aside in case of emergency. If you continue contributing to the fund each month, you will have a safety net in place for those situations that you don’t plan for.

The next time your car tire blows out, you won’t have to stress about where you will find the money to replace it. Please remember that if you have outstanding debt, you might want to deal with that before building up your emergency fund.

  1. Build a budget

Starting off the New Year with a budget can be a very easy resolution that you can complete as you watch television. No two budgets will look the same, so it is important to establish one that works for you and one that you can stick to. The hardest part about a budget is having the discipline to actually work hard to make a difference in your situation.

One way you could go about creating a budget is first estimating both your monthly income and expenses, while determining whether each expense is a need vs. want. From then, you could go into tracking your actual spending. Keep your receipts or having a journal for recording your expenditures at the end of each day are a few ways you could go about doing this. It is important to see the differences between what you think you’re spending and then what you’re actual spending. To complete your budget, you can then make the proper adjustments towards each expense and become ready to live on a budget and save money.

As the New Year approaches, tell yourself that you are going to set a resolution that sticks and one that will truly have an impact on your life. These are just a few realistic and achievable resolutions that could help you get on the right track with your finances.

Nolan Keim
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Start Saving Now!

Posted on by ekoochel

Planning for a future 40 years from today may seem impossible, crazy, and downright unnecessary… especially when it’s hard enough to see past that dreadful exam you haven’t started studying for. While retirement is in the far off future, saving for retirement early will help you maintain your standard of living as you enter your 70s and help you avoid turning back to your college ramen noodle diet.

Why Save Now?

Ideally, you should start saving in your 20s, once you graduate and begin earning paychecks. By starting a retirement fund today, your investment will have more time to grow and compound, meaning that each year’s gains will generate their own gains next year. The following graph shows the impact of investing early.

This chart assumes a 7% annual return. Investing $5,000 annually between the ages of 25 and 65 will result in a total of $1,142,811 for retirement. Your retirement fund will have $602,070 more than if you would have waited to make the exact same investment…10 years later. For further comparison, if you only invested between the ages of 25-35 (10 years), you would have earned $61,329 more than investing between the ages of 35-65 (30 years), all else equal.

Image result for growth of savings assets jp morgan

 

 

 

 

That sounds great! So how do I get started?

How you plan for retirement when you’re younger will differ from when you’re older. When you’re younger, you should save at least 7% of your salary for retirement. With the average salary of those between the ages of 20-30, $32,000, your average annual retirement savings will be approximately $2,240. This equates to putting away $43 per week, or giving up a few Starbucks coffees or Uber rides.

Many employers will offer a 401(k) retirement savings plan. If your employer offers to match your 401(k) contribution, take advantage of this benefit by contributing at least the amount that they’ll match. By doing so, you will double your retirement contributions at no additional cost to you.

If your employer does not offer a 401(k) plan, you might consider an IRA (Individual Retirement Account) as a means of investing for retirement due to their tax savings. You can open an IRA through your bank, or other entities such as Wells Fargo or Edward Jones. When choosing what to invest in, you will want to invest more aggressively when you are younger. This means you will want to invest in high-risk/high-yield options, such as stocks. Even if your investments perform poorly in the short run, you will have time to recover financially prior to retirement. Investing is no easy task and many choose to hire a financial planner. To ensure your planner is top-notch, you can utilize http://www.plannersearch.org/ to search for planners who are certified.

I Can Rely on Social Security, Can’t I?

In order to be well prepared for retirement, it is a good rule of thumb to save the equivalent of 85% of your end-of-career salary for each year of retirement. For example, let’s say you make $80,000 per year at the end of your career. You will therefore need approximately $68,000 per year in retirement, or a total of $1,360,000 for all 20 years. The average Social Security monthly retirement payment is only $1,334.21. This comes out to just $16,010.52 per year, leaving you $51,989.48 short each year.

Budgeting Your Life with Your Finances

Saving for retirement shouldn’t mean compromising your dreams and goals in your 20s. By creating and utilizing a budget, you can balance your financial responsibilities (saving for retirement, student loan payments, rent, etc.) with the things that matter to you (buying that engagement ring, backpacking across Europe, finally buying food other than ramen, etc.). To kick start your budget, you can utilize the Spending Plan Worksheet that can be found at www.k-state.edu/pfc/budgeting. For more hands on help with saving for retirement or budgeting, feel free to set up an appointment with a peer financial counselor by going to www.k-state.edu/pfc/services.  By making the choice to start saving for retirement today, you will greatly increase your wealth, opportunities, and lifestyle in the future.

Sources:

www.saltmoney.org

http://www.cheatsheet.com/money-career/3-big-benefits-of-saving-early-for-retirement.html/?a=viewall

www.jpmorgan.com

Jillian Taylor
Peer Counselor III
Powercat Financial Counseling

Let’s Talk About Credit

Posted on by ekoochel

Image result for credit cards

With the semester starting to come to a close and the holiday season right around the corner you may be seeing an increase in credit card advertising. These advertisements may be coming to you almost every week by mail, or maybe you’ve seen one or two different Samuel L Jackson commercials telling you to sign up for his credit card.  There are a lot of great long term and short term benefits from using credit, but it’s important to realize the negative costs from using credit as well.  Before using credit, make sure these advantages outweigh the disadvantages.

Advantages of Credit

Purchase Power and Ease of Purchase: Credit cards are great to have because you don’t have to carry around as much cash.  This can reduce the ease of theft.  In addition, some credit card companies offer insurance on large purchases.

Building a Credit Line– Building credit is not only important when applying for more credit cards, it also impacts the ease of obtaining loans, rental applications, and even some jobs. Having a credit card and using it wisely (making payments on time) will help you build a good credit history.

Emergencies- While you should avoid spending outside your budget sometimes emergencies (such as your car breaking down or flood or fire) happen. Having a credit card allows you to make large purchases you may not have the immediate funds for.

Disadvantages of Credit

Blowing your Budget– Credit card companies encourage users to spend money they don’t have.  Majority of credit cards don’t make you pay off your entire balance each month, so if you only have $200 credit card companies may let you spend $500. While it seems great at the time and may seem like free money, that remaining balance of $300 accrues high interest.

High Interest Rates and Increased Debt- This is how credit card companies make their money and this is how most people in the United States get into debt (and even bankruptcy.) “Most credit cards charge you up to 10 times that amount of interest on balances. This means that if you have $100 balance that you don’t pay off, you will be charged 20-25% interest on that $100. This means that you owe almost $30 interest (plus the original $100) at the end of the year. “(Mountain State: Center for Independent Living)

Brett Zapletal – Peer Counselor II
Powercat Financial Counseling
www.k-state.edu/pfc

How to Treat Yourself on a Budget

Posted on by ekoochel

Image result for halloween and money

Spending money within your financial means is important—but it is also important to prevent yourself from getting stressed out by your finances. Thankfully, there are ways in today’s world to refrain from spending money yet, letting you treat yourself every once in a while. Here are some ways you can give your wallet a break, and relax.

Download Free Phone Applications

Would you stay off of your phone in class for free pizza? If so, download the application, Pocket Points. The app knows when you are on campus, and will give you points for the time you spend off of your phone once you open the app and lock your phone. You can redeem your points for various prizes—one being free Jeff’s pizza. This is a simple way to pay better attention in class and reward yourself for a hard week of studying without having to touch your wallet.

Sign Up for Restaurant Emails and Coupons

 If you ever have a hankering for a certain restaurant, make sure to see if they have coupons on their website. Most places have an email club you can opt into to receive coupons, or the website may direct you to their app for your phone. For example, if you download the Baskin-Robbins app, you receive various coupons—one being for a free scoop of ice cream. Need a pick-me-up after an exam? Go for a free scoop!

Go Adventuring

We take for granted the many different places surrounding our town of Manhattan. If you are tight on money for the month but need a getaway, there are so many nature-made destinations nearby. Go hike the Konza Prairie, take a walk around Tuttle Creek, or enjoy the sunset On Top of the World. For more information on different places to explore and events in the area, check out the Manhattan Convention and Visitors Bureau website, www.manhattancvb.org.

Avoid Peer Pressure

One of the easiest ways to avoid spending more money than you are earning is to communicate with your friends about your financial situation. Tell your roommate to deny any request you have to go to the mall because you know it’s not in your budget, or communicate that you can only afford one trip out to eat this month. We are all college students—chances are, they are in the same situation, and it is nothing to be ashamed of.

If you would like to schedule an appointment to make a budget with Powercat Financial Counseling, you can do so at www.ksu.edu/pfc. Once you start tracking your expenses, you will know when and how you can “treat yourself”. After all, college is hard, and everyone needs a break sometimes.

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

Charitable Giving & Volunteering in College

Posted on by ekoochel

Image result for charitable giving

Charitable giving is not often at the front of our minds during college. However, charitable giving is a large reason some organizations survive. Also, helping other people either monetarily or through service is a great way to give back to the community. There are many charitable organizations that exist here in Manhattan. Often times students want to make a difference in the world but aren’t sure where to start. Here are some things to consider when thinking about charitable giving.

Tips for Charitable Giving

  • Before you give to a charitable organization, make sure you plan your budget so you know how much you can give while still being able to pay your bills and other obligations. If your budget can’t handle the donation you are planning, that will put you in a bind until finances get sorted out. Looking at your budget beforehand and determining what amount you can give is important. If you would like assistance in setting up a budget, our peer counselors would be happy to meet with you and walk you through that process.
  • The amount and frequency of donations is up to you. It may be that you want to do one big donation once a year, or you my want to give a certain percent of your budget each month. Whatever you decide, organizations greatly appreciate any support they receive.
  • You don’t have to just give money. Different charitable organizations need other kinds of support, not just financial. One option is donating canned foods and other non-perishable goods. Here in Manhattan, The Flint Hills Breadbasket relies largely on donations of food items to give out to members of the community. Another option is giving away clothing. With colder weather coming soon, there is a bigger need for winter coats. The FIT Closet is an organization with school district USD 383 that helps provide students with clothing and other necessities.
  • Another form of charitable giving is the giving of your time. Volunteering is a great option to help out your community. There are so many organizations in Manhattan. When picking what volunteer work to do, consider what it is you are passionate about. This could be helping out with children at your church, volunteering at The Flint Hills Breadbasket, tutoring elementary students, helping out at a Senior Center, or volunteering at the emergency shelter. If there is something that really tugs on your heart, that would be a great place to start!

Places to Consider Volunteering, Donating, and More Information

For more information on budgeting or other financial topics, make an appointment with Powercat Financial Counseling. We offer free and confidential one-on-one meetings on campus. Visit our website at www.ksu.edu/pfc for more information or to schedule an appointment.

Lindsay Adams
Peer Counselor II
Powercat Financial Counseling
www.k-state.edu/pfc

Cash Apps – The New Way to Transfer Cash?

Posted on by ekoochel

Image result for cash apps

These days it seems like fewer and fewer people are carrying cash. Especially as students, it’s a lot more convenient to carry around a debit card and/or credit cards on a daily basis, rather than to have to lug around a large amount of paper money or coins. But as many of us know, this can lead to complications when you are splitting a pizza deal with a couple friends, or trying to four-way spilt utilities with your roommates. And since checks can be expensive and ATM fees can add up, we need an easier solution.

Apps like Venmo, Square Cash and Google Wallet offer that solution. All you need to do is download the app from the app store, sign up, and register a checking account or debit card. Boom. You can instantly transfer money to anyone at anytime, using a unique username and password. Did I mention that it was free? And, whoever receives the transfer can “cash out” whenever is convenient, and it processes almost instantaneously!

Sounding too good to be true? Yes, these types of applications have their downfalls. Here are some things to look out for when using cash transfer applications:

  • Lack in Customer Service: many online reviews state that these companies are lacking when it comes to customer service. Their account stops working and it takes longer than it should to get ahold of a customer service rep to finally get their account back up and running. In addition, many of these companies offer little-to-no live support.
  • Security Problems: it seems that there have been no big issues with fraudulent behavior or hacking with these types of apps. However, it is important to be cautious when using them because many offer no extra security measures (you only have to login to the app once to transfer out money). I’m not sure if I would trust one password on a mobile device to protect my entire checking account!
  • Need for Checking Account: another downfall is that some of the apps require a checking account or debit card for the free transfers. They will often tack on a small fee when transferring from a credit card. However, with their business models, if you do have a checking account/debit card, it is hard for them to have hidden fees.

So whether or not you decide to join the cash transfer application community, remember, as in any decision with finances, it is important to weigh the pros and cons. Yes, it will add convenience for the college lifestyle – but at what costs?

Hillary Williams
Peer Counselor II
Powercat Financial Counseling
www.k-state.edu/pfc