Kansas State University

What is Credit?

Whether you are signing up for your first credit card, purchasing your first car, or beginning a mortgage on a new house, the one similar aspect in all of these events is your credit score. Your credit score is an important factor in determining if you can reach your financial goals. Your credit score can determine how much interest you will pay on those loans and what types of loans you are eligible for. While the credit score system can be a great ally in meeting your financial goals, it can also be the downfall of meeting your financial goals.

Types of Credit

Installment Credit:

Installment credit is a single amount borrowed that will be repaid in installments over a period of time. There are three popular types of installment credit and they are the following;

1. Student Loans
2. Auto Loans
3. Mortgages

Revolving Credit:

Revolving Credit is a credit that is given a limit in your account that carries over month to month. Revolving credit has a minimum payment that is due each month that includes your balance and interest that may have accrued. The popular types of revolving credit are;

1. Credit Cards
2. Secured Cards
3. Store/Gas Cards

What Factors Affect My Credit Score?

1. Payment History – The percentage of payments made on time
2. Credit Utilization – The average percentage of credit limit used each month. It is recommended to only use 1% – 30% of your total credit limit each month.
3. Length of Credit History – The average age of all credit accounts
4. Credit Mix – The mix of your installment and revolving credit
5. New Credit – New credit at the beginning will negatively affect your credit score like when you apply for a new credit card.

What Should I Look For When Establishing Credit?

When looking into getting your first credit card or perhaps you are ready to get an additional credit card. These are some of the common terms you may encounter.

• Annual fee – the cost to have the card every year
• APR – Annual percentage rate. The APR determines how much interest will be charged on your leftover balance every month.
• Foreign Transaction Fees – Fees that are charged to the credit card when used outside of the United States
• Variable Interest – The interest rates will fluctuate within a range depending on the market
• Fixed Interest – The interest rate will remain the same for the life of the credit.
• Credit Score Required – What score the company requires to obtain the card.

You can discuss with your current bank their options for credit cards or you could use the following websites to compare different credit cards and find the best fit for you.

• Bank Rate – https://www.bankrate.com/finance/credit-cards/todays-best-credit-cards/
• Card Ratings – https://www.cardratings.com/
• Nerd Wallet – https://www.nerdwallet.com/the-best-credit-cards

Where Can I Check my Credit Score?

A popular website that can check your TransUnion and Equifax credit scores for free is Credit Karma. https://www.creditkarma.com/auth/logon

• This website is secure and your score can be checked for free
• They offer a mobile app for Android and Apple devices
• You must create an account

Credit scores can range from 300 – 850, with 850 being the best score to obtain. Students may encounter only having a score of 600. This is because you are just establishing your credit.

Credit Score Ranges:

• Excellent: 750-850
• Very Good: 720-749
• Good: 660-719
• Fair: 580-659 (Average for new creditor)
• Poor: 500-579
• Very Poor: 300-499

How Powercat Financial Can Help

Powercat Financial is a free and confidential service provided to all Kansas State University students. You can schedule an appointment by visiting our website at https://www.k-state.edu/powercatfinancial/. You will be able to meet one on one with a Peer Financial Counselor. We can also answer your questions about budgeting, student loans, transitioning into work, and credit.

If you are unable to make time for a full appointment you can always come to our POP UP TO POWERCAT walk-in days on the first Friday each month from 9am to 4pm. The next walk-in day is Friday, November 4^th.

Dylan Birkinsha, Peer Counselor II

Powercat Financial

302 K-State Student Union, Third Floor

918 N. 17th Street

Manhattan, KS 66506-2800

785.532.2889

www.k-state.edu/powercatfinancial

PowercatFinancial@k-state.edu

Cited Sources

https://www.google.com/search?q=when+did+credit+scores+start&rlz=1C1GCEU_enUS991US991&oq=when+did+credit&aqs=chrome.0.0i512l2j69i57j0i512l7.2560j1j7&sourceid=chrome&ie=UTF-8

https://time.com/nextadvisor/credit-cards/understanding-types-of-credit/#:~:text=What%20Are%20the%20Different%20Types,repaid%20with%20a%20different%20structure.

If you are anything like me, eating healthy foods feels good! I tend to feel more energy, be more focused, and happier while feeling less stressed, bloated, and tired. However, I find it extremely difficult to eat healthy foods while I have been in college. I have always thought that healthy foods are expensive and since I am on a college budget, a.k.a. broke, I do not want to spend what I have on expensive healthy food. However, as I enter my 2^nd year of graduate school, I have found that eating healthy while on a college budget is doable and it starts with creating habits.

Habit 1: Go to the grocery store with a plan. Just like Coach Klieman prepares each year to beat OU, you should prepare to go grocery store with a plan. Identify what you are wanting to make for that week. Buy fresh produce and plan to use it that week, so it will not go bad.

Habit 2: Shop the sales and use coupons! Grocery stores have sales daily. Identify if you can replace the fruit or another type, or cereal for a cereal on sale. Additionally, many stores will have coupons available near the front doors. Pick up these coupons and see if you can use them with your grocery plan.

Habit 3: Meal prep: Meal prepping is a great way to save money and incorporate healthy foods. There are many influencers on social media that have great videos on how to meal prep with tasty healthy foods. It will take time and energy to get in the habit of meal prepping but the time and energy will pay off. Here is a great site with some amazing recipes to meal prep: Meal Prep Recipes.  

Habit 4: Farmer’s Market: Every Saturday Manhattan, KS has a farmer’s market in the Dillard’s west parking lot. Farmers markets make it easy to buy fresh organic food. Most food items sold tend to be cheaper than supermarket prices. If you have the time, check out MHK’s local famer’s market: https://manhattanfarmersmarket.org/

Habit 5: Buy what you will eat. This habit may seem counter intuitive about eating healthy; however, I believe it is an important habit to build. If you feel like you will not eat a bag of carrots or bundle of bananas don’t buy them. Save the money! You should try and incorporate these foods into your meal prep.

Lastly, I wanted to mention that Powercat Financial is hosting our annual Eating Healthy on a Budget event on October 5^th from 4:00-5:00pm in the Union Cottonwood Room. Stop by and learn additional tips and tricks on how to eat healthy and enjoy some free food!

As a reminder Powercat Financial is here to help. Please stop by the third floor of the Union or make an appointment on our website to visit with Powercat Financial.

Eli McDonald

Graduate Assistant

Powercat Financial

www.k-state.edu/powercatfinancial

Students entering college begin a new phase of life they have never experienced before. They experience new things such as living in a new town, meeting new friends and trying to get involved in the hundreds of clubs around campus. One thing that many students don’t realize is that they are embarking on a brand new financial journey as well.

Entering freshman year many students have paid little to no expenses while living under their parents’ roof. When going off to college a lot of this will change. Starting to pay for rent, utilities, groceries as well as fun events with friends – the list can seem endless and can be overwhelming. However, the thought of trying to track all of these expenses into a budget can seem daunting and timely to many individuals. Many ask why a budget is even necessary. Creating a budget helps create financial ease and stability, as well as helping you reach your financial goals. Below is an easy step by step guide to help you begin your budgeting journey and reach your financial goals!

Step 1: Identify all of your Income and Expenses

The first step to creating a successful budget is to figure out your monthly income and expenses. There are a few helpful apps that you can download on your smartphones that assist with this task. The first one I would like to mention is Mint. Mint is a free budgeting app that syncs to your bank accounts, credit cards, and debit cards to track every single transaction made. This can be a very helpful tool to use if you are a first time budgeter. Here at Powercat Financial we also have a helpful budgeting spreadsheet that we call our Spending Plan Worksheet. In the first column of this spreadsheet you can go through and enter your estimations for your monthly income and expenses. Under the expenses column there is over 50+ categories, to help you better sort through your expenses as well. After doing the estimations in the spreadsheet we like to then see based on your estimates if you are in a deficit or a surplus of cash. If you are in a deficit, we then need to go back through your expenses and categorize them as a Need or Want. If the expenses is a Want, then you should try and decrease the amount spent within this category to help you breakeven. After going through your Needs and Wants hopefully you either have broken even or have a surplus of cash, which then leads us onto step 2 of our process.

Step 2: Set Realistic Financial Goals

Setting financial goals could arguably be the most important step in creating your budget. Many individuals aren’t motivated to budget and track their expenses if they aren’t working towards a financial goal in mind. It is important to have both short-term and long-term financial goals in mind. In order to do this it is helpful to set SMART (Specific, Measurable, Attainable, Relevant, Time-based) goals for both. Some examples of short-term financial goals could be: paying off your credit card debt, saving up for a trip over spring break or creating an emergency fund. Creating a budget could even be an example of a short-term goal. Long-term goals should take place anywhere over 1 year depending on your goal. Examples of long-term goals could be: saving up for a down payment on a house, paying off your student loans, and saving for retirement. Whether you are saving toward a short-term or long-term financial goal any surplus cash leftover from step one can be used to help reach these goals.

Step 3: Adjust your Spending and Review your Budget Regularly

We all know that life is full of unknowns and unexpected events. Some of these unexpected events can take a toll on your budget. This is why it is very important to have an emergency fund set up in case of these emergencies. It is also important to periodically go through, review and adjust your spending. What does this look like? As I mentioned in step one if you are constantly overspending the first category you should look through is your Wants. If you have went through your Wants and are still in a deficit, it may be time to adjust some of your fixed expenses. For instance, could you move in with a roommate to cut down on rent and utility costs? Or could lower your grocery bill by buying more off-brand goods? A lot of these decisions come with trade-offs so it is important to weigh your options before doing so. Lastly, it is important to regularly check up on your budget to make sure you are staying on track and so you have the opportunity to make these changes, to help benefit your financial future.

Stop by Powercat Financial on the third floor of the student union and we can help get you started on creating your first budget to allow you to achieve your financial goals!

Kolby Stein

Peer Counselor II

Powercat Financial

www.k-state.edu/powercatfinancial

President Biden has announced a three-part plan to provide more breathing room for individuals with student loans. For all the details, you should go to the StudentAid.gov site at https://studentaid.gov/announcements-events/covid-19. This plan offers targeted debt relief as part of a comprehensive effort to address the burden of growing college costs and make the student loan system more manageable for working families. It also extends the student loan repayment pause through December 31, 2022. The changes are complex, so let’s discuss how they could affect you.

Broad Loan Cancellation

A major part of Biden’s student loan changes is his cancellation of up to $10,000 for most borrowers and $20,000 for Pell recipients, who come from low- and moderate-income backgrounds. Recent graduates will likely benefit from these changes, while current students may not feel their effects much, if at all. The debt forgiveness:

• Only applies to those who earn less than $125,000 a year, or less than $250,000 if a couple files taxes jointly.
• Almost 90% of the relief money will target those who have left college and are earning less than $75,000 annually.
• The Education Department believes 8 million borrowers are automatically eligible for loan forgiveness, as the agency possesses their income data. The remaining qualifying borrowers will need to fill out a “simple application,” which the department will make available at least before the end of the year.
• Borrowers can reportedly use their reported income from either 2020 or 2021 to qualify.
• Loans must have originated before July 1 to be eligible.

Income-driven Repayment Plans

Biden also has proposed major changes to the income-based repayment system, in which borrowers’ salaries determine their monthly payment. Usually after 20 or 25 years, participating borrowers are eligible to have their balances erased. The plan benefits both graduated and current students. The proposed rule would:

• Cut in half the amount borrowers would have to pay monthly, from 10% of their discretionary income to 5%.
• The Education Department would forgive loan balances after 10 years of payments, instead of the typical 20 years, for borrowers with original loan balances of $12,000 or less.
• Borrowers’ unpaid monthly interest would be covered, so their loan balances wouldn’t swell as long as they pay back monthly, even when payments are $0 because of their current income.

Public Service Loan Forgiveness

In early July, the administration unveiled a draft of regulation governing Public Service Loan Forgiveness, which eliminates debt for borrowers in jobs like government and nonprofit work as long as they make a decade of qualifying payments. To ease the path for borrowers who are pursuing PSLF, the Education Department has temporarily given more flexibility to the types of payments that are eligible. This waiver of the program’s requirements expires at the end of October. These improvements will build on temporary changes the Department of Education has already made to PSLF, under which more than 175,000 public servants have already had more than $10 billion in loan forgiveness approved.

How Powercat Financial Can Help

These three changes substantially impact students who are currently enrolled at Kansas State University and recent graduates who are working in their professions. If you have questions regarding these changes, Powercat Financial is here to help. We offer free and confidential appointments in-person and via zoom. Appointment requests can be made online at www.ksu.edu/powercatfinancial. If you are unable to make time for a full appointment you can always come to our POP UP TO POWERCAT walk-in days on the first Friday each month from 9am to 4pm. The next walk-in day is Friday, September 2^nd.

Also, make sure to participate in our current event ‘Get On the Money’, an online scavenger hunt at https://tinyurl.com/PFGetOnTheMoney to learn about free financial education resources available to you at K-State! A lucky winner will receive the grand prize of a $200 gift card! An additional 2 winners will win a $100 gift card and 2 winners will receive a $50 gift card. The deadline is September 9^th at 5:00pm. Our next event ‘Eating Health on a Budget’ will be on Wednesday, October 5^th from 4:00 – 5:00pm in Union Cottonwood room.

RJ Salmen

Peer Counselor II

Powercat Financial

302 K-State Student Union, Third Floor

918 N. 17th Street

Manhattan, KS 66506-2800

785.532.2889

www.k-state.edu/powercatfinancial

PowercatFinancial@k-state.edu

https://www.highereddive.com/news/heres-everything-you-need-to-know-about-bidens-latest-student-loan-system/630456/

https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces-student-loan-relief-for-borrowers-who-need-it-most/

https://www.highereddive.com/news/ed-department-proposes-regulatory-changes-to-borrower-defense-pslf-other/626648/

As summer vacation approaches many of us love to travel; whether it be a road trip across the country, flying abroad traveling, or taking a cruise we all need a break after a long semester.  Taking a vacation is much needed to reset your mind before your career or summer internship start up. However these vacations can get expenses, especially with the prices of gasoline right now. So, how can one try to spend less on these trips?

Budget Before You Leave

Before you pack your bags add the known expenses up. Identify how much your plane ticket is, the cost per gallon of gas in the states you are traveling through, Airbnb price and fees, food, destination activity prices, (national park fees, museum tickets, amusement parks, etc.). Once these prices are identified this will give you a ballpark idea of the trip expenses, however there will always be variables such as souvenirs, extra meals at restaurants, or emergency expenses, (i.e. flat tires). For these variable expenses you will want to leave a little cushion in your budget.  A great way to stick to this budget is to have a prepaid debit card. This way you cannot go over budget.

Make Meals

Instead of spending $20 per meal while on vacation try to make a few meals. This is easier to do if you are staying at an Airbnb, but it can still be done other places. If making meals is too much of a hassle, you are on vacation after all, plan on budgeting more for meals out.

Travel with Friends

Traveling with friends or in bigger groups you will be able to split housing costs, meals at home costs, and some activity costs (if the pricing is per group). While this will not make plane or cruise tickets cheaper it will make road trips cheaper.

Find Things for Free

Free is better! Find activities you can do for free. Many city websites will have a list of events happening in the city area. Some will cost money but many are free. Find events that you find interesting, and have an open mind while attending these events.

Find Alternative Housing:

If you are traveling abroad consider staying at a hostel. For those that are unfamiliar with hostels they are a low-cost, short-term shared sociable living space. Hostels are more popular abroad than in the states, however they can be found in the U.S. as well. Staying with friends or family while on your trip is another great way to save money while traveling. If you know if people living in the area of your destination, try reaching out to see if you are able to stay a night or two with them.

Summer is a great time to take a trip to get away from your daily stressors or to detox after a busy school semester. Just remember that traveling costs can get expenses, especially in today’s climate. Budgeting ahead of time, make meals instead of eating out, traveling with friends, find free activities, and using alternative housing are great ways to save money while traveling.

Powercat Financial is accepting appointments over the summer via the link on our website at www.ksu.edu/powercatfinancial so come in to make a money plan! Enjoy your summer!

Eli McDonald

Graduate Assistant

Powercat Financial

302 K-State Student Union, Third Floor

918 N. 17^th Street

Manhattan, KS 66506-2800

785.532.2889

www.k-state.edu/powercatfinancial

As many of us begin bringing in more money this summer than we are used to during the school year, you may be wondering what to do with this extra money. The answer really depends on your situation and goals. Your first step is to get clear on your financial goals and budget, after which there are four main options on what to do with your surplus that we will explore. If you have met all your financial obligations (car payments, minimum credit card payments, rent, etc.), first of all congrats and second let’s help you understand your best options for that money.

1. Save

One of the things you can do with extra money is save. This may look like funding an emergency fund by putting 3-6 months of expenses in a savings account. An emergency fund is important because it is a buffer between you and life in the case of flat tires, medical emergencies, and so much more. Beyond emergency funds, there are many other things you may want to save for upcoming costs like school or trips and other fun things, home down payments, and the list goes on.

2. Pay off high interest debt

Once you have saved $500 or more in an emergency fund, another good use of your surplus may be paying off any high interest debt. We recommend paying off any high interest debt like credit cards or pay-day loans, before investing or increasing your spending. It doesn’t make sense to invest for a potential annual return of 8% when you are paying 18% or more in interest on your credit card (these numbers are used for illustrative purposes only). In this scenario, you would automatically be losing 10% no matter what. Depending on your goals and financial philosophy, this debt payoff may or may not mean all debt.

3. Invest

As students we often hear about the benefits of compound interest (earning interest on interest) and how we need to start investing to take advantage of that interest. We are told that investing will help us reach our financial goals (which it potentially can). Additionally, we may be facing pressure to invest from others or ourselves and sometimes we may feel like we are already behind where we “should” be with investing. Even with all the pressure you may be facing, it is important to be smart about how you invest and make sure you have met the criteria above.

Investing is the process of giving money or resources with the expectation of a larger amount of money returned to you at a later time. However, this return is rarely, if ever, guaranteed. Before you invest, it is important to understand that you may lose rather than gain money and make sure you are financially ready. If you have an emergency fund and have met your other savings needs, that is great! You may be ready to start investing. You just have a few more steps to make sure you are investing smart.

a. Set goals and manage risk- Will you need the money in a short or long time frame (time horizon)? What are you specifically saving for? Setting goals will help you know how much risk you can and should take (risk capacity) to achieve your goal. Risk tolerance is another important question to answer. What is your risk tolerance? It is important to not be too risky or to not take enough risk. Find where your sweet spot is – the risk level that will not keep you up worrying at night. There are many different risk tolerance quizzes online, try a few if you are not sure of their results. Once you understand your time horizon, risk capacity, and risk tolerance you will have a better idea of what to invest in and what strategies work best for reaching your goal.

**If you plan to make frequent trades (day trading) on apps like Robinhood or Stash, use fun money and do not count it as saving/ investing. Day trading is considered speculating rather than investing, which normally is intended to last months or years. While day trading can lead to massive gains, it can and more often will lead to (potentially massive) losses and tax consequences.

b. Decide on an investment vehicle (mutual funds, ETFs, etc.) and check its fees (the lower the better).

c. Diversify- After you decide what kind of investment vehicle you plan to use then you can decide on the investments (stocks, bonds, etc.). After you know what you will be investing in, make sure it is diversified or that there are a variety of investments within your holdings to help reduce risk. The warning ‘not to put all your eggs in one basket’ comes to mind.

4. Increase Spending

If you have an adequate emergency fund, met your other savings goals, and have paid off high interest debt, then you may have room in your budget to increase spending. This option gives you permission to spend some of your surplus as you see fit and enjoy your money in the present. Sometimes you have the capacity to spend more on things you enjoy because you have already put yourself in a good situation financially with adequate savings, are making progress towards your financial goals, and paying off high interest debt. Managing your money is a balancing act between present and future spending, sometimes you have the ability to spend more in the present without harming your financial future.

If you have questions and want help thinking through what makes sense for you, set up a free appointment with Powercat Financial. We can also help you find out how much you need for college, understand your student loans, learn to budget, etc. Powercat Financial is available for online or phone financial counseling sessions which may be requested via our website link at www.k-state.edu/powercatfinancial. Also check out YOU@KSU for additional personal well-being help.

Ana Sanko

Peer Counselor III

Powercat Financial

302 K-State Student Union, Third Floor

918 N. 17^th Street

Manhattan, KS 66506-2800

785.532.2889

www.k-state.edu/powercatfinancial