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Author: roxanne

Credit Cards: Warning and Benefits

Posted on by roxanne

In recent years there has been a lot of action when it comes to credit cards and college students. In the Credit Card Act of 2009 a college student’s ability to receive a credit card became more difficult. Before this act it was not uncommon to find credit card companies soliciting on college campuses and as soon as some reached 18 their mailbox became flooded with credit card applications that were accompanied by very high interest rates.  The law now states that credit card companies must remain 1,000 feet from a college campus and that anyone under the age of 21 must have a cosigner to receive a credit card. These laws have been created not to make our lives more difficult, but to keep us from the ensuing debt that can occur when a young person has access to a credit card.

Although credit cards can create many problems for young individuals, they also provide a wide range of benefits. One of the major benefits of using a credit card is that it helps to build your credit and credit score. Your credit and credit score is what helps figure the interest rate you will be charged and determines  your ability to receive loans in the future. Having no credit can sometimes be as bad as having poor credit.

One way to build credit, but still keep yourself from increasing debt is to choose one thing that you purchase each month and use a credit card to pay only for that item. Some examples would be gasoline, prescriptions, or a cell phone bill. These three are good options because they will remain similar from month to month so you will become more familiar with the charge. After putting one of these purchases on your credit card you can pay it off at the end of the month. If you treat your credit card bill like another bill that you might be paying it will allow you to use the card to build credit and your credit score, but to not pay interest on your purchases.

Lastly, credit cards can really be a benefit when we use them correctly. If you find yourself in a situation where you are not be able to pay the card off in full every month, make sure that you are able to pay more than the minimum payment. To avoid overspending with your credit card, use your card for needs only instead of a means to fund your wants. Paying the minimum payment only will rack up the interest costs that you will pay and remove any benefit that the credit card can offer. Enjoy the convenience of having a credit card, but don’t think of it as free money!

Anna Ewing
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc
 

Assessing Job Offers

Posted on by roxanne

With graduation fast approaching, many seniors find themselves brushing up their resume, job searching, and scheduling interviews. Salaries and benefit packages can be confusing, but understanding what a company has to offer can help the transition from student to employee to go smoothly.

The first detail to think through is how much do you expect to be paid? Do your research so that if you would be asked in an interview you would be able to come up with a reasonable amount. Career One Stop is a great place to start your research! You can search by occupation and location to see what is a practical asking salary. Some things to remember:

  • The cost of living varies from city to city. You will need a higher salary in order to live in a place like San Francisco than you would to maintain the same standard of living in Kansas City.
  • If you are planning on moving, look into different community resources to help get you settled such as voter registration, childcare providers, health care facilities, and ways to give back by volunteering.

Secondly, you should evaluate the benefits package provided by the employer. Employee benefits can be just as valuable as compensation, and will vary between employers. Health and life insurance, retirement benefits, gym membership, flexible spending accounts and tuition reimbursement are some of the possible benefits you might be offered.  Make an appointment with a Peer Counselor at Powercat Financial Counseling to compare benefits so that you can make a well informed decision!

 

Jentry Samuelson
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Financial Success Stories

Posted on by roxanne

The Merriam-Webster Dictionary defines success as “the accomplishment of the aim or purpose.”  At Powercat Financial Counseling, our counselors’ number one concern is to help our clients achieve financial success. There is no easy button or simple recipe for reaching financial success. However, included in this article are simple financial steps that can help anyone get started in the right direction to becoming their own financial success story. Also, included in this article are client success stories, as related by Powercat Financials peer counselors.  Please note that the client’s names have been changed in this article to protect their privacy. To begin, you will read about Shelly and the path she took to becoming financially successful.

Shelly struggled with finances early on in college and had to work 20 plus hours a week to make ends meet.  She had gotten in over her head in credit card debt and was feeling a lot of financial stress about her situation.  She was active on campus and a leader in student organizations.  She aspired to help her family be financially successful and wanted to set a better example for her siblings.  We worked with Shelly on her budget and reviewed a plan to pay down her credit card debt.  Her dedication to improving her situation was apparent; she just needed help getting started on the right path.  She stopped using her credit cards and stuck with the plan we developed no matter how challenging it seemed. She came back to us near the end of her college career with a totally different perspective.  She’d secured a great career opportunity and no longer had credit card debt to pull her down financially.  She was so relieved and felt more secure with her situation.  She even talked about starting to save and put money aside for her siblings.  With our help, she realized the financial success she’d dreamed of.

With every success story there is a lesson to be learned. In Shelly’s case, the lesson is the importance of establishing and following a budget. This is the first step to becoming financially successful.  Budgeting is particularly important in college when majority of students funds are limited.  Using a budget is a way for students to stay on top of their finances. In order to start a budget the first step is to estimate your expected expenses for one month. Next, closely track what you actually spend over a month’s time.  Finally, revise spending habits in order to stay within the budget. You can read additional information about creating a budget along with access to our budget form click on the following link. http://www.k-state.edu/pfc/budgeting/

The next client success story involves a young lady named Katherine. Katherine sought out our services after breaking her leg. She did not have any health insurance and was unable to receive financial support from her parents. When she first met with us she was overwhelmed with the idea of paying off her medical expenses. The billing departments had been contacting her and the financial stress she was feeling was widely apparent.  The first thing we helped Katherine with was to help her organize the bills and establish a plan for paying them off. We helped her establish a budget, in which we included the medical payments. After working through a budget and offering her additional advice about student health insurance options Katherine was able to breathe easier.

As before, there is another lesson to be learned from Katherine. In this type of situation, the importance of having a budget does come back into play. However, this client was an excellent example as to why individuals should have an emergency fund established. It may seem like a daunting task, but even just saving $20-50 dollars every month could help make those unexpected situation less stressful. An easy way to do this is to “pay yourself first.” If you have direct deposit at your job, set up your pay check so part of it goes into a savings account.

Success is measured differently for everyone. For Shelly, it was becoming debt free and for Katherine it was paying off her medical bills. So help yourself become a financial success by tackling one financial goal this month. If you don’t have a budget, start working on one. Or perhaps you want to start saving for your emergency fund; start by setting up a savings account this month.

 

Anna Govert
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

The Latte Factor

Posted on by roxanne

A while back, a man by the name of David Bach coined the phrase “The Latte Factor.” The Latte Factor is based on the idea that you can greatly increase your savings by paying attention to some of your smaller expenses and redirecting them for better use. Your personal Latte Factor can be anything from daily lunches out to your subscription to a local newspaper.

The Latte Factor Can be illustrated by the following calculations:

A Latte a Day = $3.50
A Latte a Day for a Month = $105.00
A Latte a Day for a Year = $1,260.00
A Latte a Day for a Decade = $12,600.00

As you can see, the Latte Factor does a good job of showing us how some of our smallest expenses can add up to enormous amount of money over time, but what does that mean for us as college students? I think that it illustrates the importance of tracking our expenses and understanding how much money we are spending on a weekly basis. Here are 4 tips to help prevent small expenses from adding up:

Create yourself a budget. Give yourself a weekly allowance for things like food/coffee/etc. and STICK TO THAT BUDGET. If you go over, stop spending (it’s not always easy but it definitely works).

Use a gift card. Using a gift card is another effective way to give yourself an allowance. Put an allotted monthly amount on the card and use it for all your expenditures.

Use moderation. College is an important time to start forming good habits that are going to stick with you for the rest of your life. Consider this saying “Good habits are hard to form and easy to live with. Bad habits are easy to form and hard to live with.” It’s going to take some personal discipline on your part, but I promise that it’s worth it!

Create an account on Mint.com. Mint.com is a FREE website that allows you to monitor your expenses and create personal budgets. I personally use this and it is a great tool if you are looking to get serious about your finances.

 
Ryan Ehart
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

It’s Time to Opt Out!

Posted on by roxanne

Tired of receiving phone calls and preapproved offers? – It’s time to Opt Out!

Are you annoyed with the amount of preapproved offers in your mailbox?  Are you irritated by telemarketers wasting your time on the phone?  Good news – there are ways to be proactive to stop this from occurring!

If you no longer want your mailbox filled with preapproved credit and insurance offers, you can choose to opt out of receiving them.  The four consumer credit reporting companies (Equifax, Experian, Innovis, and TransUnion) sell your credit information to credit card and insurance companies wanting to find new customers.  If you visit www.optoutprescreen.com, this website gives you the choice to opt out of receiving these offers for either five years or permanently for free.  This means the four consumer credit reporting companies stop selling your information to these companies. However, if you choose the five year option, you must opt out again at the end of five years in order to continue to not receive the preapproved offers.  If at some point you decide you would like to receive preapproved offers again, you can do so by choosing the opt in option at the same website.

By choosing to opt out, this will reduce the majority of your unsolicited mail.  Because not all mail travels through the same mail service, only the companies that use the Direct Marketing Association’s (DMA) Mail Preference Service (MPS), the mail service allowing you to opt out, will stop. Mailings from organizations that do not use the DMA’s Mail Preference Service can continue.

The website does ask for some personal information including your name, address, social security number, and birth date.   If you are uncomfortable providing your social security number and/or birth date, these two items are not required.  That information is just added to help ensure the success of your request.

To reduce the amount of your phone calls with telemarketers on the other end, the federal government’s National ‘Do Not Call Registry’ is the answer.  You can register your home phone and your cell phone for free by visiting www.donotcall.gov. It will ask for your telephone number and your email address.  After pressing the submit button, you will receive an email asking to for you to open a link to finalize your registration.  After you have opened the link, you have completed the registry and should print the page to keep for your records.  By registering your phone number(s), you have opted out permanently.  Telemarketers have up to 31 days to stop calling you from the date you register.  Like the preapproved offers, you can choose to opt back in but only by calling the toll-free number at 1-888-382-1222.

For more information on the National ‘Do Not Call Registry’ and unsolicited mail, see www.ftc.gov.

 
Kari Christensen
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

 

Importance of a Financial Plan

Posted on by roxanne

With any event, it is important to have a map of where you are and where you are going. Managing your finances is no different. Not only is it responsible to have a financial plan, it also comes with many benefits and few costs. I would like to focus on the importance of having a financial plan upon entering college and the urgency of creating one if you are student who does not currently have one.

When you step onto campus for the first semester of your freshman year, hopefully you have some savings from part time jobs in high school, graduation gifts, scholarships, some support from your parents, education funds, and maybe a few student loans to help you have enough cash to make it through your first year of school. However, as you progress through school, the tuition bills begin to add up, the scholarship money tends to get smaller for upperclassmen, and mom and dad may feel the need to teach you financial responsibility by letting you support yourself.

Without a financial plan, it is very difficult to know if you have sufficient funding and it is very convenient to spend money freely on eating out, going to concerts or movies, and other recreational events. Also, it is difficult to foresee upcoming problems with your finances if you neglect to take the time to consider what your financial future will look like. In the instance of not looking ahead, when problems do show up, they can be very hard to overcome. You may have used up all of your savings, scholarship money, and student loan money that was intended to last you through the entire semester before you realize you have a problem. In order to have the cash to pay the bills to get through the semester you might have to take on a job or even a second job if you already had one. Another option is to accept more student loan money, which can be difficult and can set you back upon graduation. Most students would agree, working while going to school and trying to juggle a social life can be extremely stressful. As you can see, not properly allocating your money has many adverse effects that go beyond not having enough cash. You can lose your free time, struggle to do well in your classes, and add unnecessary stress to your life all by not having a financial plan.

However, there is good news. With a few hours of time and some number crunching, you can be on the road to responsibility and financial success.  With a financial plan there is potential to save yourself time, money, and stress. With all the benefits and such little cost, it seems silly not to have a financial plan.

Developing a financial plan is simple. First, you need to find out where you are. Take a look at your current resources and expected expenses for the upcoming semester. Calculate the savings you expect to use, your expected income and expected expenses on a monthly basis. If your resources do not meet your expenses, you know in advance that you will need to find sources to finance your need. By knowing this before it is an emergency situation, you give yourself the luxury of time to solve your problem. Once you have your plan in place, you have to execute and track your progress. Keep records of all your expenses (receipts, bank statements) and income (pay stubs, loans). By comparing your actual amounts with your estimates on a monthly basis you can see where you are going and if adjustments need to be made.

It is my encouragement to you to develop a financial plan and follow it closely. If you already have one and have not been utilizing it, please start. By being responsible with your money in college you are putting yourself on the track to get a fulfilling college experience, graduate with minimal student loan debt, and the potential to start saving and investing for retirement at an earlier age. However, it all starts with a financial plan so save yourself time, money, and stress and develop a financial plan.

If you’d like to meet with a Powercat Financial Counseling peer counselor to get free assistance in developing your college financial plan, please contact us at powercatfinancial@k-state.edu or call us at 532-2889.  We’re students just like you and are here to help.  We have more information about this subject on our website at http://www.k-state.edu/pfc/planning.

Matt Kiehl
Peer Financial Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc