Kansas State University

search

Powercat Financial

Author: ekoochel

Your New Year’s Money Resolution

Posted on by ekoochel

The New Year will be here in a few short weeks. With finals and the busy holiday season approaching, the New Year will be here before we know it. Around the end of the year we start to reflect, wondering if it went as planned. Maybe 2015 brought some unexpected financial hardships, maybe you ended up spending more than you earned, and maybe your student loan debt grew and grew this year. All of these situations can seem overwhelming. That is why PFC is here to help. Remember, you can always request an appointment at www.ksu.edu/pfc for personalized help. But below are a couple generalized tips to keeping your financial goals, or New Year’s Money Resolution for 2016 in line.

What if I am happy with my finances?

You may be thinking you don’t really need to change any part of your finances. But it is important to remember that the unexpected could always happen or things may not go exactly according to plan. So if you are one of the lucky students who have little, or no student loans, maybe you could work on building your credit. Or if you have an excess amount of money each month, instead of splurging on a trip to the mall, put it into an emergency savings account fund. The point is that even if your financial situation seems great, there is always something to work on to make it that much better.

What do I do if I need to start up a new and improved budget for the year?

Although it is difficult to change the things of the past, you can always plan for the future. 2016 may bring many obstacles and your financial stress could be at an all time high. If this is the case and you need to vamp up your budget, you can visit our website at www.ksu.edu/pfc/budgeting for some information on budgets. Don’t get discouraged if 2015 didn’t go as planned. Sometimes it can be hard to stick to a budget. Try to get a fresh start for 2016 and push yourself to stick to a realistic budget that allows you to spend money where you want. Remember, sometimes it doesn’t always seem this way, but budgets are your friend. They help you stick to a plan, which can be essential for you to reach your long-term financial goals.

How can I build my credit throughout the year?

Credit can be a scary thing. Just remember, that like a budget, credit is your friend. A good credit history can help you get a lower mortgage rate or a higher credit limit, as well as benefit you in other ways. If your goal for the New Year is to gain some good credit history but you don’t want to change much about your spending habits a credit card might be for you. There are other ways to establish credit like: auto loans, secured credit cards, and student loans. Visit our website, www.ksu.edu/pfc/credit to learn more about the various types of credit and find out which one may work for you. If you are making payments currently on your student loans this is helping to build your credit history. If you want to build existing credit make sure you are always paying your bills on time, and using your credit wisely- we recommend about 30% of your credit limit. Another important tip to remember is to check your credit report for discrepancies, if there is incorrect information on your credit report, clearing this up can dramatically increase your credit score immediately. You can check your credit report at www.annualcreditreport.com 3 times a year, one per credit bureau, for free.

Finally, no matter your financial situation, do not get discouraged. A year is a long time and a resolution is in fact that, a resolution, a goal, something you are aspiring towards. So if it doesn’t go as planned immediately, or if you have a couple hiccups throughout the year don’t give up! Just check in on yourself periodically, or have a friend or family member hold you accountable if need be. Good luck! And happy (almost) 2016!

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

New Year, New Financial Attitude

Posted on by ekoochel

Believe it or not, 2015 will be coming to an end before we know.  With that for many people comes a “New Years Resolution” and financial stress. As December approaches, it is important to spend some time reviewing the past year and making goals for the upcoming year.  Some tips to consider when preparing for the new year are: budgeting, goals, financial literacy, and savings.

If you haven’t made a budget, it is a great first step towards achieving financial success.  Budgeting can be overwhelming for some people, but just keep in mind that it is a process and requires both time and work.  Use December expenses and income as a rough draft for your budget so when the beginning of the year rolls around you are ready to really focus in on your financial situation. Using December as a practice run allows students to have some experience at the beginning of the year, instead of being new to the budgeting process.  This experience gives students a chance to start planning ahead for the upcoming semester, school expenses, or the opportunity to begin saving for spring break.

Speaking of spring break or education expenses, goals are a vital piece of creating a budget.  The end of one year and beginning of the next is a great time to set some new financial goals.  There are short-term and long-term goals.  A short-term goal is something that you want to achieve within the next year and a long-term goal is something you want to achieve in longer than a year.  If you had goals from the previous year, be sure to address the process of them.  It is especially vital to review any previous long-term goals you had set.  It is really important to make sure that any goal you want to achieve is a SMART goal.  SMART goals stand for specific, measurable, attainable, realistic, and timely.  For example, if you were saving for a new car a smart goal to achieve that could be: “I would like to purchase a new car by December 2018 for $10,000 by saving $188 a month.”

Making financial decisions can be difficult for many college students who are managing their money for the first time in their life.  If you are feeling financially stressed, feel free to reach out and get help. A great resource for students at Kansas State University is a free individual counseling session with our peer counselors and Salt.  Salt is the free online financial tool Powercat Financial Counseling bought for students and alumni that offers numerous financial articles, tools, and many other resources.  A recommendation that is helpful when making good financial decisions is to find out what motivates you to make those decisions.  Do you have a goal in mind when you make positive financial decisions or is it the feeling of achievement you feel?  Either way, use that motivation to continue to find success in your financial situation.  If you are unsure of what motivates you, try to really think about the reason behind the financial decisions you want to make.

Lastly, as the new year begins make saving a priority.  A beneficial habit for students to establish is to pay themselves first.  If you try to make it a priority to save a little bit of money each and every month before spending more the financial goals you set will start to become a reality.  If you aren’t sure where or how to start savings, start small. Instead of spending $2 a week at the vending machine, try saving that and at the end of the year if you saved that $2 every week you would have a total of $104 of just vending machine money each year!

Although this can be a stressful time of the year with a lot of extra expenses, just remember to take a deep breath and plan ahead.  The new year is always a great time to regroup and form positive financial habits.  If you make a financial resolution, try to stick with it and the hard work will pay off.  Powercat Financial Counseling is here to assist you in making these steps as well.

Kristen Payne
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

The Holidays are Right Around the Corner

Posted on by ekoochel

With the holiday’s right around the corner, it is a good idea to get a jump-start on your holiday budget. Powercat Financial Counseling is here to assist if you are a first time budgeter, or if you need assistance with your current one. You can make an appointment any time by following this link: http://www.k-state.edu/pfc/. Also be sure to keep up with our events and tips by following us on twitter @KStatePFC.

To kick off the holiday season PFC hosted an event recently – Thrifty Gifting, to find out information regarding the shopping guide, holiday budget worksheet and the slide presentation follow http://www.k-state.edu/pfc/budgeting/.

The holidays seem to creep up and before we know it we are trying to buy gifts all within one week (we have all been there); which is not a good idea if you are on a tight budget. With no plan, or budget, gift giving can quickly get out of control and cause a lot of stress. Some people slip up on their budget during the holiday seasons because they believe they deserve a free pass during the holidays. Don’t fall into this pattern and create bad habits. To stay within the holiday bliss we would like to share some tips for the holiday season.

First things, first, create a budget

First you will need to sit down and make a list of all the people you may want to buy a gift for. How much you will spend on each person. You can either budget out per person, or take a percentage of your income for your total gift-giving budget. The difficult part will be sticking to it! Remember if you stick to the budget you will be less stressed and not feel guilty for over spending, equaling a joyful Holiday time!

Crafty and meaningful gifts

Giving gifts does not have to be all about how much money you spend on them. You can bring joy to others by being crafty with your gifts, bake, and draw or make a craft for a gift. Sometimes the best gifts are the ones that have a lot of meaning behind them. Suggestions might be framing a wonderful picture for the person that brings back memories of a day you shared.

Shop the sales

Shop the sales! This may not necessarily mean black Friday, shop online (try to find companies that offer free shipping and free returns). There are a lot of options for shopping online now, it may take more time than going to a store, but may save a lot more money in the long run.

Remember what the holidays are about

The holidays do not have to be all about gifts, the holidays are a time for building memories with your loved ones. If gift giving is not an option have a gathering, such as a potluck. With a potluck everyone can make a dish relieving pressure on one person, but allowing everyone to gather together.

Camila Haselwood
Peer Counselor II
Powercat Financial Counseling
www.k-state.edu/pfc

Understanding Interest Rates

Posted on by ekoochel

As college students leaving home for the first time and becoming more financially independent from our parents, it is important that we familiarize ourselves with basic concepts when learning to deal with money.  One of the most important concepts to understand is interest rates, and how they can affect our financial lives in good and bad ways.  An interest rate is a percentage at which interest is paid by borrowers for the use of money that they borrow from lenders; in other words the cost to borrow money.  Interest rates are commonly seen in credit cards, student loans, and mortgages.  However, interest rates can also benefit you as a saver when banking institutions pay you for the use of your money, especially when you start saving at a young age.

A Simple Interest Rate is a percentage of an amount, called the Principal, which can be on an annual basis.  Here’s a quick example of how simple interest works.  If you were to put $1,000 into a bank account, and were given a simple interest rate of 5%, the amount of interest you would earn at the end of the year is:

Principal amount * Simple Interest Rate = Amount earned

1000* .05 = $50

You would earn a nice return of $50 dollars for allowing the bank to borrow your money for that year.  As we can see, simple interest is very easy to calculate which is why it is called a simple interest rate.  You would continue to earn $50 dollars each year if you decided to keep the $1,000 in the account.  Over 30 years you would earn $1,500, and over 50 years you would earn $2,500.

The same would apply if you were borrowing $1,000 and paying a simple interest rate annually.  It would cost you $50 per year to borrow that $1,000.

Compound Interest works a little a bit differently. You don’t see a lot of results in the short-term, but in the long term compounding can make a big difference.  Compound interest is calculated on the initial principal amount and the amount of interest built up. Because of this interest build up, compound interest will grow at a faster rate than simple interest. In other words, you are earning interest on both the principal and the interest earned, rather than just the principal as in simple interest.

For example, if you put $1,000 into an account when you are 20 years old and the rate that is paid is 5% per year compounding and you just leave it alone, never adding or taking anything out, after 30 years you will have $4,321.94; after 50 years you would have $11,467.40.  As you can see, with compounding you earn more than with simple interest – an increase of $2,821.94 for 30 years and $8,967.40 for 50 years.

Calculating compound interest is a bit more complicated. You can calculate compound interest on a financial calculator, but there are several calculators available on the internet.  Just search “compound interest calculator”.  One of my favorites is http://investor.gov/tools/calculators/compound-interest-calculator

Compounding can be a great tool to save money easily.  You can really see the benefits of compounding if you start saving early as possible, make regular contributions to the account, and leave the money alone to grow over time.  Even though interest rates paid on savings are very low right now, at some point in the future the rates should rise and understanding the concept of compounding can help you become a more disciplined saver.

Unfortunately, compounding can also work against you especially when you are borrowing money.  Most students run into this through the use of credit cards.   An interest rate you may have heard about before in regards to credit cards is the Annual Percentage Rate (APR).  This rate is the annual rate that is charged for borrowing, stated as a percentage that represents the actual yearly cost of not paying off your credit balance on or before the due date.  Students can use credit cards to establish credit history, it is more convenient than writing checks everywhere and you have a record of all purchases.  However, credit cards are among the most expensive types of debt, with some of the highest interest rates and fees.

The APR on credit cards can be hard to track.  There are different rates charged for various transactions or time frames.  For example, most cards try to give you a low, introductory rate, then after a few months, it goes up.  Also, students without a long credit history will likely be charged a higher rate.  Cash transactions usually are charged a higher APR than regular purchases.  If you miss a payment, you could be charged a penalty APR.

Most credit card companies use a Daily Periodic Rate (DPR) and Average Daily Balance to calculate interest charges.  The DPR is calculated by taking the APR and dividing it by 365 (number of days in the year).  The Average Daily Balance is figured by adding up each month’s daily balance and dividing it by the number of days in the month.  The amount of interest you will pay is calculated using this formula:

Card Balance X DPR X days in statement billing cycle

Because of all the variables involved in differing rates and fees, it is very important to check your credit card’s particular rates and fees schedule on the statement to see how they are calculating transactions and what other fees they charge.  The best advice is to pay off your credit card balance every month before or by the due date!

Understanding interest rates and how you can make them work for you is a great first step in building a strong financial future.   If you have any questions on how interest rates work or any other financial questions, schedule an appointment with Powercat Financial Counseling by going to our website www.ksu.edu/pfc!

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

Save Hundreds While Buying Textbooks

Posted on by ekoochel

As the Spring semester is quickly approaching, students will begin to start thinking about the supplies needed for their classes. According to the College Board, the average student will spend more than $1,200 on textbooks and supplies, per year. This number is outrageous for students who are already paying a large amount on other school expenses. The bad thing is, the costs of new textbooks and supplies aren’t going to be going down in the near future. So what can we do to keep some of the money spent in our pockets? I encourage you to consider the following to improve your awareness of the other options that are out there.

  1. Buy Used

You will want to begin looking for used books as soon as possible, because they usually sell fast. Start by going to your local bookstores, to see if there are any used options available. If not, first check online before you immediately buy a brand new book. One great thing about new books is the fact that they’ll most always be available.

  1. Buy Only What You Need

One thing that I have begun to realize, is that not all required books are really required. One way to find this out is to ask around, maybe a friend has taken the class before and says it’s not worth the money. Another option you have is to give it a few class periods to see if the instructor will be making the textbook a priority.

  1. Buy and Sell

If you are forced into buying a textbook at full-price, always remember to put it back on the market after you are finished using it. You might not get all of the money you spent, but maybe it’s enough to cover a book or two the following semester.

  1. Consider Renting

Another great buying option that you could take advantage of is renting instead of buying. First, check your local bookstores to see if they offer this. If they don’t, search online because there are a lot of places that let you rent a book for a semester instead of buying it. This could definitely be a very cheap option for you.

School is expensive. Everyone should try their hardest to save as much money as possible. Taking into consideration these buying options, are just a few of the ways you can cut back on your school expenses. This time, when the new semester rolls around, I hope you have the knowledge think twice about buying a brand new textbook.

Be sure to visit Powercat Financial Counseling for a free and confidential peer-to-peer consultation to make sure your finances are on track for the upcoming semester.  Visit our website at www.ksu.edu/pfc to schedule an appointment.

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

 

New Enhanced SALT Services Coming Soon

Posted on by ekoochel

You’re all familiar with SALT®, the free financial resource that gives you the educational tools you need to manage your finances associated with school, like student loans, scholarships, budgeting, and more. And we’ve just added a whole new way SALT can keep you financially healthy in school and afterward: proactive Education Debt Management Services. That means if you have any student debt, SALT will reach out to you now to make sure you’re always on track with your payments and help you navigate your repayment options.

Communications

When will you begin to hear from SALT? In the first three years of repayment, you’ll get direct SALT communication via email, snail mail, and phone, regardless of your loan status. The timing of these communications is based on over 50 years of the nonprofit American Student Assistance’s borrower services expertise—so they’ll get in touch with you before you ever run into any issues with repayment.

Also, SALT’s financial counselors are available by phone and chat seven days a week at any stage of your repayment process. And you can rest assured that they’re known for being neutral, unbiased, professional, and empathetic, with a consistently high satisfaction rating from students and alumni alike.

As one Kansas State alum stated after using SALT’s services, “I am so pleased with the service I received from SALT. I was really struggling with some repayment information and after my chat, I know exactly how to move forward. SALT gives me peace as I learn more about how to repay my student loans. Thank you very much!”

Join SALT for free at www.saltmoney.org/kstate to start using this valuable resource now and start finding scholarships, jobs & internship, and tips for becoming money savvy. Kansas State’s Powercat Financial Counseling wants all students and alumni to be financially successful and has brought you these free SALT resources to ensure your financial success now and in the future.

Jodi Kaus, Director

Powercat Financial Counseling

www.k-state.edu/pfc

powercatfinancial@k-state.edu