Being in school and trying to stick to a budget can be daunting. As students, many of us have varying financial needs depending on time of the year, season, or even month. These make the traditional budgeting method of using your stable monthly income to pay for your regular expenses a bit more difficult. Even though budgeting in college presents challenges, it is not impossible, with a little bit of care and attention you can create a budget and savings plan for any month, season, or year.

The main reason that budgeting presents a unique challenge in college is due to the fact that both our income and expenses vary between the school year and summer. For example, in a summer job many students are working full time if not close to that making a full-time salary for 10 weeks out of the year, but then we get back to school and might not be working at all or only working for a couple hours each week. When you combine that with the fact that the majority of students expenses typically fall in August and January it makes it look as if you are spending exponentially more than you make in those months. This is a challenge I, and many of my peers, face every year when trying to create a budget for the year.

These challenges should not be roadblocks in creating a budget, by following the tips below, you may find that creating a budget while in college is easier than you thought!

1. Use a method to track all income and expenses.

The easiest way to start setting up a budget is to write down all the income items and expense items you will see in a year. I do this by keeping track of month-to-month income and expenses in a bullet journal I created, but there are many options. Aside from pen and paper many students like to use Excel. Powercat Financial even has a helpful spending plan worksheet through Excel found here, https://www.k-state.edu/powercatfinancial/budgeting/. Another option, for students who primarily use their checking account, is tracking expenses and income using their online banking app connected to their check book or debit card. Finally, a very easy and popular method is using an online app like the free Mint tool. Details about Mint can be found here, https://mint.intuit.com/. By tracking expenses and income, you will make sure you are staying on track for the year, even if one month might be more expensive than another.

2. Add up your yearly income and think of it as being used for 12 months.

This tip is very helpful for students that have consistent rent and other payments. After you have an estimated total for the year, one option that you can use is taking your total yearly income and diving it by 12 months. This way, the money you might make in the summer can easily be allocated to later in the fall or spring for those rent and living expenses without feeling like you are spending more than you have made in the year.

3. Know when your expense take place and make sure that you plan to save for those months

Finally, as students we have large tuition payments in August and January, even though we pay them in those months, by theoretically dividing up these expenses into 12 months, you know how much you need to save each month to make these payments when they come around. So when you are working your summer or winter break job, you can hold the amount of money required for your January payments back in your savings account.

These tips are just a few suggestions that might make the daunting process of budgeting just a little bit easier. Any of these tips can be adjusted to work best for you. Each students’ circumstances are different and while expenses and income change month to month, your confidence in your finances does not have to change.

As always, Powercat Financial can help you create an individualized budget that fits your needs. To request a free appointment go to this link, www.k-state.edu/powercatfinancial.

Cameron Jones

Peer Financial Counselor

Powercat Financial

www.k-state.edu/powercatfinancial

New year, new you, right? It is now February and maybe you have stuck to your resolution and maybe you haven’t. Better late than never to make a new one and STICK TO IT! For me, increasing my savings by $100 a month was a resolution of the past, but how did I pull it off?

Savings is so important, especially if you have big plans in the future which might include buying a car or home, traveling, starting a family, paying off student loans, etc. In as early as college, financial professionals recommend that an individual retain an emergency fund. This is something that is put away and touched only for emergencies. An emergency would include any expense that you might not have planned for. Examples of this would be getting a flat tire and having to buy replacements, job loss, the loss of a family member or spouse, unexpected home repairs, etc. We recommend that an individual has 3-6 months worth of expenses put away in their emergency fund.

For some of us, spending is easier than saving, so how can we change our mindset to favor savings over spending? Below are tips to ensure that you are putting an adequate amount of money into your savings account and maintaining a system so that your savings funds are never scarce.

1. Change your direct deposit to go into two different bank accounts.

This is an option that not a lot of students and professionals know about. For many companies, there should be an option when setting up your direct deposit to have only a percentage of your paycheck go to one bank account and the remaining balance go into the other. For example, you could elect that 10% of each paycheck go into your savings account and the remainder be deposited into your checking. This ensures that you are never really getting the option to spend the portion that is going into your savings because it is never touching your checking account.

2. Have your savings account monitored by a different institution or bank.

Having your savings account at a different bank than your checking account makes it more difficult to access. This will also ensure that you will not transfer funds between the two accounts. Transferring money from my savings account to my checking account to cover my spending habits is something that I have personally struggled with in the past. This tip is something I highly recommend for those that may find themselves transferring money between the two accounts, especially at the end of the month when funds tend to get lower.

3. Work it into your budget.

If you work with a personal budget each month, this tip should be very simple to incorporate. Some might work with a weekly, biweekly, monthly, or annual budget, and making sure you have a separate section for savings can be done in each of those scenarios, however, the amount allocated may differ. For example, if I work with a monthly budget, I want to make a list of each section I want to allocate money to. Sections could include clothes, restaurants, groceries, extracurriculars, etc. I would also want to add a savings section. For myself, I choose to put whatever I have leftover at the end of each month into my savings account. This being said, determining a set amount of money may make it easier for an individual to hold themselves accountable and make sure that they are deferring money into their savings account. This could be any monetary value the individual chooses but mainly depends on how they allocate the other sections of their budget.

4. Create a budget.

Not only can working savings into your budget increase the amount you save, but simply having a budget can create the same effect. A budget is a tool that is created by the individual to hold themselves accountable for their spending. When you have a budget, you are ensuring you are not spending more than you earn. Most individuals choose to not allocate their whole income to a section of their budget, creating extra money at the end of the budgeting period. This is what could be considered ‘savings money’, or the money that could be put into a savings account.

All four of these tips will ensure that you will create a healthy savings plan for yourself. This is important now, but especially post-graduation, when expenses and responsibilities increase. Establishing an emergency fund is essential to your future. We never know what tomorrow might bring, but being prepared will assist in deflecting the direct financial impact.

If you have a question or would like help establishing a savings plan for yourself, Powercat Financial is here to help! We are currently available for online or phone financial counseling sessions for students. Free appointments may be requested via our website link at www.k-state.edu/powercatfinancial.

Powercat Financial will also be hosting our annual Love and Money event February 9, 2021 at 6PM CT. We will be sharing tips and tricks to merging your finances and lives together. Please RSVP TODAY at http://bit.ly/3t50KGI to receive the Zoom link!

Claire Herrmann

Peer Financial Counselor I

Powercat Financial

www.k-state.edu/powercatfinancial

Some common financial goals for college graduates include buying a car or a house, but how does that process work? Taking out a loan is required for most people to make these large purchases, and good credit is essential to receiving the best terms on the loan. Establishing and building your credit in college is a great start towards these financial goals, but not only these. Banks, landlords, and insurance companies may all look at your credit to determine your financial responsibility.

The two ways of establishing credit are installment credit like loans, and revolving credit which is a credit card. Now, most college students I know are not taking loans from their bank, but a significant portion have credit cards to help build their credit. As we switch mainly to online shopping due to COVID-19, credit card use is on the rise, and as a result, the risk for debt is growing too. The average American’s credit card debt is already $6,194 but that could increase with the prevalence of online shopping (USA Today). Credit cards are easy to use but can result in you spending more money and racking up tons of debt, which affects your credit score and impacts many facets of your financial life.

A credit card purchase is essentially a short-term loan and allows people to purchase items with money from the credit card company, and they pay it back at the end of the month. The ease of swiping a card can actually cause people to spend more money though. According to a study by Dun & Bradstreet, people spend 12-18% more on purchases with a credit card than with cash. Combine this with the ability to create large amounts of debt and you’re in dangerous territory. The annual percentage rate (APR) that will be charged on unpaid balances on a card usually ranges from 15%-22%, with students without a co-signer ranging toward the higher percentage. A 22% rate means that for every $100 unpaid on a credit card, after a year you will owe $22 of interest. The $122 will compound on itself and result in crippling debt if left unpaid. This debt can impact your ability to receive mortgages, car loans, and maybe even sign a lease.

My warnings are not meant to scare you away from credit cards. Building credit in college with a card is not a bad idea! You should just be careful of how you utilize the card because poor management could impact your goals. When you apply for a loan at a bank, they will look at your credit score and credit report. The credit score is the “Financial GPA”, like your GPA in school. It is essentially a score that rates how responsible individuals are with borrowed money. We refer to the credit report as the “Financial Transcript”. It details all the credit transactions individuals have made, including student loans and credit card use (you can view a free credit score estimate here: www.creditkarma.com).

Any debt and untimely payments will impact your score and appear on your credit report. The bank will look at these and determine your ability to pay back a loan, with a lower score resulting in higher interest rates or a denied loan application. However, paying the full balance on your bill on time,  and not using more than 30% of your credit limit can earn you a lower interest rate and help you achieve your goals.

I have four tips I would like to share to make credit card use simple. These will give you a foundation to build healthy credit while in college.

1. Pay on Time – Make sure you pay the bill on time and at least the minimum payment. Paying the entire bill will help you stay away from unnecessary debt but paying at least the minimum will keep your score intact.
2. Regular Payments – Pay your credit card balance once a week and make it a routine. Utilizing more than 30% of your credit limit can reflect poorly on your score, so this method will help you avoid harming your score by preventing large balances. (I pay mine off every Wednesday.)
3. Specified Purchases – Only use it for specific purchases like gas or groceries. Contrary to popular belief, more is not always better. Do not put every purchase on your credit card and expect it to end well (I have made this mistake before)!
4. Spend YOUR Money – Try to visualize a credit card as another debit card. Do not spend money that is not in your bank account!

Responsible credit card use will result in a good credit score and financial freedom, but poor use can result in massive amounts of debt, a poor score, and the inability to achieve your goals.

Powercat Financial has an entire section on our website dedicated to credit (https://www.k-state.edu/powercatfinancial/credit/) that covers credit scores, reports, what impacts them, and many other credit topics.

If you have questions that you cannot find on the credit section of our Powercat Financial website, we would love for you to schedule a free appointment via the link on our homepage at www.k-state.edu/powercatfinancial.

References:

https://www.usatoday.com/story/money/2020/02/26/american-families-forced-to-rely-on-credit-cards/111364698/

https://www.nerdwallet.com/article/credit-cards/credit-cards-make-you-spend-more

Cal Shimkus

Peer Financial Counselor I

Powercat Financial

powercatfinancial@ksu.edu

www.k-state.edu/powercatfinancial

Contact your federal student loan servicer with any questions regarding this program:

Student Loan Debt Relief Measures Extended 1 Month Through January

By Owen Daugherty, NASFAA Staff Reporter

The Department of Education (ED) on Friday announced borrowers will receive a one-month extension of the federal student loan administrative forbearance period, the pause in interest accrual, and the suspension of collections activity.

The measures will run through Jan. 31, 2021, ED announced in a news release, providing borrowers with debt relief for an additional month as the forbearance period was set to expire at the end of the year.

“The coronavirus pandemic has presented challenges for many students and borrowers, and this temporary pause in payments will help those who have been impacted,” said Education Secretary Betsy DeVos. “The added time also allows Congress to do its job and determine what measures it believes are necessary and appropriate. The Congress, not the Executive Branch, is in charge of student loan policy.”

The month extension means borrowers will have relief in place through the remainder of the Trump administration. Had ED not extended the moratorium, relief for borrowers could have lapsed until President-elect Joe Biden entered the White House on January 20, creating a headache for borrowers, loan servicers, and the department in the interim.

Tens of millions of borrowers entering repayment all at the same time would be a difficult task for Federal Student Aid (FSA) and loan servicers, though it could still pose an issue next month if there is a small window between when the extension is set to expire and when Biden takes office.

Congressional leaders have called on the Trump administration to use its authority to issue an extension as negotiations over year-end spending bills and another federal relief package continue.

FSA is working with federal student loan servicers to notify borrowers of the extension, according to the release. Some borrowers had already received emails letting them know payments were due again in January.

As has been the case throughout the pandemic, non-payments will continue to count toward the number of payments required under an income-driven repayment plan, a loan rehabilitation agreement, or the Public Service Loan Forgiveness (PSLF) program.

Additionally, wage garnishments for borrowers in default will still be discontinued and any borrowers who have their wages garnished will receive refunds.

To say 2020 has been a turbulent year would be an understatement. The COVID-19 pandemic, devastating wildfires, nationwide protests, earthquakes, hurricanes, economic fluctuations – all this and more makes us hope for a better 2021. To round out the year, we are right in the midst of the presidential election.

Because mail ballots take longer to count and each state has its own rules for how votes are counted, it may take days or weeks after Election Day to know who wins. According to the American Psychological Association, nearly 70% of U.S. adults reported being stressed about the 2020 U.S. presidential election. Election Day results are a big deal for the country but one that you can handle personally. Here are four things you can do on Election Day to stay sane while waiting to hear the decision:

1. Set a Cap for Your News Watching Time

If you feel like you have to have a sense of where the election is heading, try to hold yourself to every few hours. Checking every minute, every 15 minutes or every 30 minutes is not going to give you much more clarity on the outlook.

Don’t be glued to your computer or television. Wanting to constantly know the latest results can cause anxiety and lessen the enjoyment of Election Day.

2. Consider the Content you do Consume

While you may love social media, it happens to be the one place where disinformation and false news are shared the most. Focus on getting the facts from reliable and nonpartisan sources, like the New York Times, Wall Street Journal and others — not from social media. Whatever you read, it’s best to find one to two other sources to verify the story and read both the side that supports your perspective and the side that does not to get a better idea of what is actually happening.

3. Be Proud of Your Actions and Avoid Worrying About What is Out of Your Control

The most important thing you can do when it comes to Election Day is vote. Whether you voted beforehand in person or with a mail ballot or went to a polling place on the day of, you have done your part. Other than that, don’t think about the rest that is out of your control.

The act of voting, thinking about the election process and caring about democracy are enormous events that can be awe-inspiring and daunting at the same time. Manage your sanity by doing your part, being proud of your actions and letting it go at that.

4. Maintain Perspective

It seems like each election is claimed to be the most important election ever. Yes, elections are important, and your participation is important. One person, such as a president can have an impact on your life, but your life is still mostly yours to control. You make the most important decisions about your life, not someone else. Presidents come and go in your lifetime. You are the constant.

Get some fresh air. Go outside for a walk or a run. Connect with other people. Talk to a friend. Election Day and the results from it should not alter how you go about living your life. Keep your life moving. It is your life to live. Don’t allow a single election or decision to change how you approach life.

Avoid looking too much at the news, be proud of your vote and maintain perspective. Remember these tips not just for Election Day but also when you are waiting for any big decision or outcome in your life.

That said, seek out professional help if your election anxiety becomes disruptive to your daily life. If limiting your interaction with news and pursuing healthy alternatives do not do the trick, then seeing a psychologist or other mental health professional may help.

On the same note, feeling unsure about your financial future is completely normal, especially in a year that’s been anything but normal. You don’t need to go through this uncertainty alone – Powercat Financial is here to support you as you take action to your financial well-being. Remember, you can schedule a free and confidential client session with the link http://www.ksu.edu/powercatfinancial where we can help you with budgeting, student loans, credit, etc.

https://www.apa.org/news/press/releases/2020/10/election-stress

Sarah Meenen

Peer Counselor II

Powercat Financial

www.k-state.edu/powercatfinancial

The following post is from the K-State Research and Extension Family Finances Team. Learn more at https://www.k-state.edu/family-finances/.

“The three big nationwide providers of consumer credit reports are Equifax, TransUnion, and Experian. Throughout the Check Your Credit program, you can request your credit report from the three companies in any order you’d like to. For this “Check Your Credit Report” day, we suggest you request your credit report from Experian.

To learn more about requesting your free credit reports, including what information you’ll need to provide to request your report, steering clear of imposter sites, and correcting errors in your credit report, go to www.ftc.gov and find the Take Action section in the middle of the page. Then, select “Get Your Free Credit Report.”

From there, navigate to annualcreditreport.com, the only gateway to the free annual credit reports. Alternatively, you can call 1-877-322-8228 or request your credit report by mail.

Complete instructions for getting started are at the annualcreditreport.com link. Experts recommend that you fact-check your credit reports at least once each year for accuracy and completeness. It is also wise to check your reports if you plan to obtain a mortgage, a car loan, or apply for credit in the near future.  Also, as we know, data breaches happen. If you are concerned about identity theft, checking your reports regularly and placing a security freeze that blocks third-part access to your credit data are two actions that you can take.

During these times of COVID-19, accessing your credit is important. That’s why Equifax, Experian, and TransUnion are now offering free weekly online reports through April 2021.

We are excited to support you as you take action to secure your financial well-being. Don’t hesitate to contact your local K-State Research and Extension Office if you have any questions. Find your local office here.”

Remember students can also request a free meeting with Powercat Financial if you’d like help getting or reviewing your credit report via the link at www.k-state.edu/powercatfinancial.

Powercat Financial

powercatfinancial@ksu.edu

www.k-state.edu/powercatfinancial