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Author: kdarnell

Preparing Your Budget for Spring Break

In case you missed PFC’s “It’s Spring Break NOT Spring Broke” event yesterday, here are some tips to help you stick to your budget during spring break. Start planning what you will do, how you will get there, what it will cost, and any additional spending money you will need for it.

Compare flight prices in an incognito browser (aka private browser). An incognito browser won’t release your IP address to the site, which can prevent sites from raising prices on a second visit in order to pressure customers into buying too quickly or without further research. In Chrome, click the menu button on the top right. In Firefox, click on the drop down menu in the top left. On Safari, click on Safari in the top task bar. And in Internet Explorer, click on the safety tab on the menu. Some sites to look at for comparing travel prices are:

  • http://www.kayak.com/
  • http://www.expedia.com/
  • http://www.priceline.com/
  • http://www.amtrak.com/
  • http://www.greyhound.com/
  • http://us.megabus.com/ (though there’s no stations in Kansas, it can help with a connecting trip)

Oftentimes, taking a bus, train, or driving will be largely cheaper than taking a flight, but will take longer. Consider cutting costs by sacrificing a little time. Also keep in mind that prices tend to go up as the date of the trip gets closer. Getting a jump on buying tickets can save you a lot of money.

Compare hotel prices. Most of the travel sites listed above also offer hotel comparisons and discounts. Make sure to research the cost it would be to buy them separately before assuming that the bundle is cheaper. http://www.hotels.com/ is a good site to compare prices. They have deals every now and then for certain hotels and offer a punch card system for booking through their site where you get a free stay after ten nights booked. Since a hotel can sometimes just be a place to sleep at night, consider booking a lower-cost hotel instead of one that has a lot of amenities.

Make SMART goals to save up for the trip. They should be Specific, Measurable, Attainable, Realistic, and Timely. Determine how much you will need for the trip and set a specific amount of money to put away for a specific period of time (each month, each paycheck, etc…), that can fit in your budget and get you the amount needed in time. This will require a good budget to know how much you can afford to set aside each month. Consider stashing away any holiday or birthday money towards it as well.

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

Everything You Need to Know about the FAFSA

What is the FAFSA?

The FAFSA, or Free Application for Federal Student Aid, is a form that should be completed annually by any college student seeking student loans or grants for the next school year. To get any kind of federal financial aid, you must file the FAFSA. It will determine how much financial need you have for student loans, grants, and even work study. Federal student loans can be either subsidized or unsubsidized. Subsidized loans are loans that the federal government subsidizes for you while you are a student. That means that the interest on the loan is paid for you. Unsubsidized loans have interest that accumulates while you are in school. Grants do not need to be repaid. They are basically free money given based on need. Work study is given based on need as well. You work on campus part-time and get paid with that money.

Who is it for?

Subsidized loans are available for undergraduate college students with financial need. Unsubsidized loans are available for undergraduate and graduate college students with no requirement to show financial need. You must show financial need in order to qualify for grants and work study as an undergraduate and graduate student. You must also be at least a half-time student to receive federal financial aid.

When should it be done?

Submit your FAFSA application by March 1st for K-State because it is their priority deadline. That is when certain grants will be awarded to needy students. The sooner you submit your application, the better. Keep in mind that every school has a different priority deadline so make sure you know when it is. If you miss the priority deadline, it’s not too late! Go ahead and file your FAFSA as soon as possible.

Where to start?

Complete your FAFSA at https://fafsa.ed.gov/. If you have not completed the FAFSA previously, you and your parents may need to register for a Federal Student Aid PIN. You can do so at pin.ed.gov. Remember that pin and do not share it with anyone. It will serve as your electronic signature at the end of your application.

If you are a dependent of your parents’, then you will need their information in addition to yours. You will need social security numbers, 2013 federal income tax returns, bank and brokerage statements, and your PIN numbers.

You need your tax information for the FAFSA but if you have not done your taxes yet, then you should still submit it with estimates first. You can go back to it later and import your tax information directly to your FAFSA using the tax filing pin you created when doing your taxes.

Renewing your FAFSA

If you have completed the FAFSA before, it will be easier to fill it out now. Your information from prior years will be transferred, then you can just update your information with new tax return information, etc. You can use the import tool to retrieve your income tax information.

Melissa Daovannary
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Your Credit Score: the 3-Digit Number

A 3-digit number affects your financial life significantly. This number is called a credit score. A credit score shows your creditworthiness, and it also indicates the possibility that you will not pay your bills. Different lenders use different scoring formulas to create credit scores, so your score can vary from lender to lender. Most scores range from 300 – 850, but you should have a credit score goal of at least 700.

A good credit score brings you several benefits. Some of the benefits include:
• Low interest rate on credit cards and loans. Interest is charged when you borrow money, and so the interest rate is tied to the cost of loans. With a high credit score, you will be qualified for the best interest rate.
• Higher chance to get loans and credit cards approved.
• Get higher credit limits.
• Better auto insurance rate.

Some tips to achieve and maintain a good credit score include:
• Pay your bills on time. One way to do this is to set up automatic payments at creditors’ websites or from your bank’s website. Pay more than the minimum payment if you have the ability to do so.
• Don’t get too close to your credit limit. If you use too much of your total credit line, you will hurt your credit score. Keep your credit utilization ratio less than 30%.
• Don’t apply for too many credit accounts in a short time, otherwise it will affect your credit score negatively.
• The longer the credit history, the better. The longer time you have credit in your name, the more experienced you are, and the more information creditors have to determine whether you can take care of your finances.
• Get your free credit report every year. You can get three credit reports each year at www.annualcreditreport.com . It is necessary for you to read through your credit report to ensure your information is correct and to verify that you have not been a victim of identity theft.

When you have a low or nonexistent credit score, you will get higher interest rates on loans if you are approved, which are more costly in the long run. When you apply for jobs, many companies perform background checks as a part of the interview process and they are going to check your credit. Some companies also check your credit history when you are considered for promotions.

To check your credit score for free go to www.creditkarma.com. If you would like to meet with a financial counselor to discuss your credit report or score, simply request a free and confidential appointment at www.ksu.edu/pfc.

Lei Cao
Peer Counselor I
Powercat Financial Counseling
www.ksu.edu/pfc

Money and Relationships

Research shows that money is the number one argued point in all relationships, and therefore we all need to spend more time talking about our finances with our partners. Sometime throughout life we have all probably experienced the profound effect money can have on our relationships. Money is a hard issue to talk about because it is usually a subject we are not necessarily overjoyed to sit down and figure out. Whatever relationship you may be in, when money is involved, you need to be taking time to talk with your partner and figure out your financial situation.

One major issue with money in relationships is where and how each person spends money. It is essential that a spending plan is made, with each person contributing to it, that each person will stick with. When there is a concrete spending plan in place that each person is willing to adhere to, the relationship can progress, and you can work towards accomplishing your financial goals. Listed below are some tips on what to keep in mind while you are making your spending plan.

1. Make money rules together
• Both you and the other person in the relationship need to agree on how you are going to spend your money. If one person comes up with a spending plan alone, the other person may not agree to it and therefore will not follow through with the plan. To be able to stay motivated to stick to a spending plan, each person needs to be involved in the planning process.

2. Be willing to compromise
• Both of you need to be willing to make compromises. For example, one person may not like the idea of spending money on eating out, but the other person may spend more money eating out than getting groceries. When sitting down together, you can figure out the perfect mix of eating out and buying groceries that works for both of you.

3. Express each of your perspectives about money
• Each person in the relationship needs to be honest in how they spend money and the reasoning behind their spending habits. Putting it out on the table for the other person to understand will make it easier to find a compromise in your spending plan and help the process.

4. Save for emergencies
• Each person should be putting money aside for emergencies. If you don’t save for emergencies, such as an unexpected car repair, it may cramp your other finances. By putting an emergency fund into your spending plan, you can be more prepared for unexpected expenses that may arise. The rule of thumb is to have 3-6 months of living expenses in your emergency fund.

5. Seek outside help
• If you are struggling on how you should make a spending plan and are unsure if it will work, seek outside help. At Powercat Financial Counseling, we offer free, confidential counseling sessions for K-State students. Go to our website at www.ksu.edu/pfc and make an appointment if you want help in making a spending plan.

**For a spending plan worksheet, go to www.ksu.edu/pfc/budgeting/. On that page, click on spending plan worksheet and begin the process of creating your spending plan. **

Brooklyn Hnizdil
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Tips for Tax Time

It’s tax time again, folks! Now I know that nobody likes to deal with what could be a complicated and confusing process of filing your income taxes, but it may be required of you by the government, and even if you aren’t required to file, you may be entitled to a refund! And who doesn’t want to get money back? If you had any earned income during 2013 and had tax withheld from your paycheck, then it is worthwhile to file your taxes. You may have a refund coming your way if you do! Here are some helpful tips to help you get going on your taxes.

First off, start early! Even though filing isn’t due until April 15th, getting a head start may keep you from running into problems later. The closer it gets to due date, the more difficult it will be to get help and advice from a tax professional if you get into a bind. Also, starting early can help budget the time it will take to finish filing. It shouldn’t take too long to fill out the forms for a college student that has only one job, but you don’t want to procrastinate and not give yourself the time to properly fill out the forms. Even if you haven’t received your W-2s yet, you can still get started (note: a W-2 is tax form that shows the amount of taxes withheld from your paycheck for the year and is used to file your federal and state taxes). Your final pay stub will have pertinent tax information, such as your income and what was withheld. Another form that’s already available to you that you shouldn’t forget is your 1098-T. The 1098-T is the Tuition Statement. K-State has made these available to all students. The 1098-T can be accessed in iSIS, under the Finances section of the iSIS Student Center. The 1098-T reports the amount of qualified education expenses paid by the student during the year. These expenses are used to calculate what tax credits are available to the student for the year. Below is a link to a video provided by TurboTax that has some good information in regards to the 1098-T.

https://turbotax.intuit.com/tax-tools/tax-tips/College/Video–Guide-to-IRS-Form-1098-T-Tuition-Statement/INF20481.html

It’s important to know your filing status, where you need to file, and know what you are qualified to deduct or get a tax credit for. It’s important to talk to your parents and find out what your filing status is. If your parents provided more than half of your support for the year, they are entitled to claim you as a dependent, meaning they would be the ones who can take advantage of education-related tax benefits.
Another thing to consider is where you need to file. Aside from needing to file with the federal government, you will need to file with all states in which you worked. That means, for example, that if you are an out of state student, and you worked here in Kansas during the school year, but also worked during the summer back home, you may be required to file taxes in both states. You can file a Kansas tax return online for free at www.ksrevenue.org. You’ll need to check each state’s website for specific details relating to filing requirements for that state.

It’s always a good idea to find out if you qualify for some deductions to your taxable income or if you qualify for some relief from your taxes owed through tax credits. For students, it’s a good idea to look at that 1098-T mentioned earlier. It will have information on what tuition and fees you paid this year that can be deducted from your taxable income for the year. You can also deduct a portion of the student loan interest you paid during the year. The Student Loan Interest Deduction is available to recent grads who have started paying back loans and to current students who have put in some early payments that apply to paying down some of that loan interest already accrued. Credits are another good way to reduce your taxes. It’s a smart move if you look in to seeing if you or your parents would be eligible for some education-related tax credits. Three of the main credits offered are the Hope Scholarship Credit, American Opportunity Credit, and the Lifetime Learning Credit. The link below gives some additional information on some of these benefits. For more information you can always visit the IRS website as well.

http://www.taxslayer.com/support/1161/tax-tips-for-students-and-parents-paying-college-expenses?language=1
http://www.irs.gov/uac/Tax-Benefits-for-Education:-Information-Center

Here is a list of some free Tax Preparation Services that may be helpful to you:

VITA – a free tax service available at the Manhattan Public Library. They prepare simple IRS 1040 tax returns and Kansas returns only. Maximum Household income is $52,000. To set up an appointment call 785-565-6426 or email vitataxes@gmail.com. For further information, contact Jennifer Wilson at the Riley County Extension Office at 785-537-6350.

www.irs.gov – FreeFile oline of federal taxes if income is less than $57,000

www.ksrevenue.org – free online filing for Kansas state taxes

Glacier Tax Prep for international students. Link available at www.k-state.edu/isss

www.thebeehive.org/money/pay-taxes/file-your-taxes-free-online

Other Sources:
http://www.bankrate.com/brm/itax/news/20040130a1.asp
http://www.citizensbank.com/student-loans/tax-tips.aspx

Nathan Simonsson
Peer Financial Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

U.S. education secretary spotlights Powercat Financial Counseling as a program to emulate

By Communications and Marketing

U.S. Secretary of Education Arne Duncan spotlighted Kansas State University’s Powercat Financial Counseling as a financial literacy program to emulate during his address Dec. 4 to more than 6,000 financial aid professionals attending the 2013 Federal Student Aid Training Conference at the Mandalay Bay Hotel in Las Vegas.

Powercat Financial Counseling is directed by Jodi Kaus, who spoke on a panel at the conference on “How Schools Educate Their Students About Financial Literacy.”

Duncan outlined the Obama administration’s efforts to address rising college costs and make college more affordable for American families, including the administration’s proposal to create a college ratings system that would better inform students and encourage institutions to improve. He indicated the president proposed an ambitious plan for transforming financial aid in America.

“In short, we envision a world with a much higher level of financial literacy about what it takes to complete college and the benefits and restrictions of student aid,” Duncan said. “Improving financial literacy should be an institutional goal, driven in significant measure by financial aid administrators, in partnership with other leaders in higher education.”

With greater transparency and increased financial literacy as key components of Obama’s plan, Duncan indicated innovative financial aid leaders were already showing the way to improving financial literacy, increasing transparency, boosting retention and college completion, and strengthening loan counseling. He indicated best ideas should be taken to scale.

“I would like to see more institutions emulating financial literacy programs like Kansas State’s Powercat Financial Counseling program and Ohio State’s Scarlet and Gray Financial Program,” Duncan said. “At Kansas State, the goal is for students to meet with Powercat Financial Counseling every semester to create and review their college financial plan, just as they would meet with an academic advisor to work on their academic plan. At both Kansas State and Ohio State, these programs rely in part on peer educators, students from financial-related majors who spend a semester training to advise students and who serve as financial coaches. At a meeting with a group of college students just last week, I heard how much they appreciated peer mentoring and support programs.”

Duncan further highlighted the efforts of Powercat Financial Counseling by indicating that since Kansas State began its program in August 2009, more than 1,200 students have received individual financial counseling, nearly 16,000 students and parents have received group financial education, and 60 students have served as peer financial educators

“That is campuswide change, not a case-by-case change,” Duncan said.

Complete text can be found online.

You may learn more about Kansas State’s Powercat Financial Counseling program at www.k-state.edu/pfc.

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