Kansas State University

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

Have you recently accepted a job or internship for this summer and feel overwhelmed with all the details and responsibilities that come with it? This blog post will help you navigate the details of starting somewhere new so you can focus on your new job instead. During this time of the semester many people have already accepted offers for the summer or full-time jobs after graduation, but if you are still comparing offers then check out peer counselor Ryan’s blog about working through different job offers to determine the best one. Once you have accepted your job or internship, use the following information to help position yourself for a successful transition.

1. Finding housing

First off, let me congratulate you on your new job/internship! This is a big step in life and can help you determine how the rest of your career will look. Now that you’ve accepted the job, one of the first things to look at is where you want to live. If you’re like me, you probably want to upgrade and live somewhere bigger, nicer, and close to work or somewhere else you frequently go. The only downside to this is that it will most likely be more expensive and sought after, so you will have to look early and often. Below are some different tips when looking at housing for your new job:

• Look at something in your price range – A good rule of thumb is for rent not to exceed 30% of your income, but this is flexible depending on your situation.
• Set a budget for rent and other housing expenses every month – If this is proving to be difficult, make an appointment with Powercat Financial so we can help you!
• Find a roommate – I know you have probably been looking forward to living without roommates, but they can significantly decrease your costs. I recommend having a roommate that you can trust to pay rent and live with well.
• Look early and often – I recommend looking as soon as you accept your job offer because likely your ideal living space is also ideal for lots of other people. If you know early enough, searching 6 months in advance is worth it.
• Learn about the space – Read reviews online, tour the apartment, have applicable questions for the landlord, and have a parent or someone you trust come and look at it with you.
• Look at transportation – Is it close to work or where you want to be? Is the neighborhood walkable, bike-able, and drivable? Make sure there is an option for public transportation if you need it.

Read this article about Apartment Hunting for more tips on searching and applying. Being approved for a new living space can be tricky if you don’t qualify yourself, so the next section details how to be approved for your apartment.

2. Be a Good Applicant

Most landlords and banks will look at your credit history, proof of income, savings, and other factors before they approve/deny your application or loan. The following are tips to make yourself a more desirable renter.

• Have quality credit history – This means that your credit score is excellent (650+) and you have minimal bad marks on your credit report. To learn more about building credit please read Peer Counselor Alex’s blog about Building Good Credit in College.
• Have proof of income – Your potential landlord wants to know that you can pay rent every month, so make sure you supply them with your job offer/proof of income. They generally look at how much the rent is in proportion to your new income and prefer applicants that stay below the 30% mark that I listed above.
• Have some savings – As a college student it may be difficult to have a lot of money in your savings account, it may be necessary for some landlords to see. In addition to proof of income, they want to see if you can pay rent if you suddenly lose your job. At Powercat Financial, we recommend having at least 3-6 months of living expenses saved for an emergency, and landlords like to see you have this in place in case of an emergency.
• Have a co–signor – If you currently don’t have any credit, income, or savings then don’t worry, there is still another option! If you have someone with quality credit and income sign on your lease with you or be a guarantor, then you have a much better chance of being approved. Make sure this person is someone you trust, possesses good credit, and is willing to pay if you cannot pay.

I have met several students that don’t meet one of these three criteria and must resort to using a guarantor or co-signor, but this isn’t necessarily bad. It just means that you should start building credit and saving some money now so the next place you go won’t require you to have a co-signor. Landlords and loan officers look at these to make sure you can pay them on time, so make sure you’re working towards establishing these if you haven’t already.

 Create a Budget for Your New Income

I know this sounds tedious, but creating a budget with all your new income and expenses can alleviate stress and let you focus more on your new position. This can help you estimate your actual take-home pay, your potential savings for retirement and other goals, and give you an idea of what everything will cost in your new city. I have had many students come in because they don’t understand their job benefits, so I recommend checking out our website on benefits and reading Ryan’s blog I mentioned above to familiarize yourself with them. I also recommend making an appointment with us at Powercat Financial for this portion so we can go through your benefits and determine how much spending money you will have. Below are some tips you can use to start your budget for the month you begin working:

• Download our “spending plan worksheet” from the Powercat Financial website and follow the instructions listed in our budgeting section.
• Estimate your current income and expenses
  • Use your new salary/wage for monthly income and then use current expenses to estimate expenses.
  • It can be hard to estimate your new expenses, so use your current ones (unless you already know rent and other fixed expenses) and then change them based on this cost of living calculator to more accurately represent expenses in your new city.
• Make sure to estimate your taxes! If you have no idea, please make an appointment and we can come up with a rough estimate together.
• Include savings for your financial goals, whether that is retirement, buying a house, or anything else you would like to work towards.
• Make sure to estimate your student loan payments and include them in your budget – make an appointment with us and we can help you come up with your monthly payment and incorporate it into your salary.
• Incorporate your benefits into the budget
  • For example: If health insurance is a deduction from income, then make sure to include it as an expense on your worksheet.

These budgeting tips will help you prepare for the first step in your budgeting process, but there are several more steps that I have not included because I want you to read all of this blog. If you are interested in learning more about the entire budgeting process, please read Abram’s blog on the Benefits of Budgeting. This should also help you get started on the process and explain why we talk about budgeting so much at Powercat.

Feeling Confident?

I hope this information has given you confidence to start your transition to work, but it shouldn’t be where you stop. I want to emphasize that this process can be very overwhelming and difficult to do alone, so I highly recommend that you schedule an appointment with Powercat Financial so one of our peer counselors can help you work through your transition to the workforce. We are well-versed in job benefits, evaluating offers, and preparing you to start your career and the sessions are 100% FREE and confidential as long as you’re a student at Kansas State!

Cal Shimkus

Peer Counselor II

Powercat Financial

302 K-State Student Union, Third Floor

918 N. 17^th Street

Manhattan, KS 66502-2800

785.532.2889

www.k-state.edu/powercatfinancial

PowercatFinancial@k-state.edu

Many students find that there are always many large purchases that need to be budgeted for at the same time. That could be an upcoming trip, saving for holiday gifts, a new laptop, saving for your rent or maybe even a down payment on a home. Whatever the upcoming event or need that you are saving for, it is always good to create a simple strategy to ensure that all your needs and want are budgeted for! Follow this step by step guide to create great budgeting strategies and reach your goals.

1. Organize each category with relevant information:

The best way to organize each budgeting category is to sit down and start thinking about any large/upcoming purchases or saving needs you have. Create a list with different categories and within each category write down any important and relevant information about that goal. This could be details about when you need the money by, how much money you need, if there is any payment plans or divided payments you can make on that goal, etc. Once you have listed all important information, it is time to prioritize.

Example: In this example, the student wants to save for 3 different goals, and they listed the relevant information below.

Trip to Europe: They need the money by summer 2023, total needed $4,000 in 14 months.

Investing: They want to open their Roth IRA account in 2023 and want to make the maximum contribution of $6,000 in December of 2023, which would be 20 months from now.

School Tuition: They need to cover their last semester of tuition, which is spring of 2023, the total will be $4,000 and they need it in 8 months.

2. Prioritize which categories are most important:

After you have taken the time or organize your goals, it is time to prioritize which ones are most important. While of course it is best to try and accomplish all your goals, make sure that you understand if money is short and you cannot contribute to every goal, you know which ones are the most important and timely.

Example: After the student has listed their 3 goals, they listed the goals in order of most to least important. Keep in mind that this can be personal preference and may not be the same for everyone.

Most important: School Tuition – They know they need to finish college first and foremost so this goal will come first.

Second most important: Trip to Europe – They have already planned many of the details and other friends are counting on them to go, they know that this must be a saving priority for them.

Third most important: Investing – Although they know they need to start investing soon, this ranks third because of the two other financial obligations they have.

3. Set a month-by-month plan to save the desired amount each month:

After you have listed each goal in order of importance, it is time to start saving and budgeting for each goal. To do this, take the total amount you need to save for this goal and divide it by the number of months you have left to save. After you have come up with your monthly number to save, start thinking about how you will achieve these goals.

Example:

School Tuition: $4,000/8 months is $500 per month starting in May 2022

Trip to Europe: $4,000/14 months is $285 per month starting in May 2022

Investing: $6,000/20 months is $300 per month starting in May 2022

This means for the rest of 2022, they need to save $1,085 per month for all 3 goals than once their school tuition is paid for, they will only need to save $585 in 2023.

4. Adjust as needed:

If you come up with a number that is too large to save for you can either reduce your number of goals, add more time to save for each goal, or reduce the amount of money needed to save. If you cannot do any of those options, start looking into how many extra hours you may need to work each month to save for those goals. To create extra income, you could look towards side hustles like babysitting, selling clothes you no longer wear, or picking up an extra job for the weekends. Continue to revisit these goals and evaluate if you are on the right track to accomplish your goal!

Example: The student realized they only have $900 to save each month and will come up $185 short. The student decides to pick up 1 babysitting job each week to cover these extra saving expenses and is able to meet their goal.

5. Continue to set new goals: Once you have reached your goal, celebrate yourself and think of other upcoming goals you may want to add now that one has been completed. Always make sure your goals are SMART, by creating specific and reasonable goals, this will help to not feel overwhelmed by them.

Whatever your goals are know that budgeting is one of the best way to create healthy financial habits to know how your money is coming in and where it is going. By creating healthy budgeting habits early on, you will be prepared for larger purchases later in life.

Cameron Jones

Peer Counselor II

Power 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

PowercatFinancial@k-state.edu

Two years ago, the U.S. government put a pause on student loan payments and interest accrual as a COVID relief measure with the Care Act 2020. The pause was to end on May 1 giving borrowers less than a month to prepare, however today the Department of Education announced the pause will be extended to August 31, 2022.

What should you expect when payments and interest resume September 1st?

Here are 6 steps to make sure you’re equipped for student loan payments to resume:

1. Changes to your contact information

Begin by logging on your loan servicer’s website and in your StudentAid.gov profile to review your contact information and make any necessary changes that may have taken place in the past 2 years.

2. Get the figures on your next payment

While on your loan servicer’s website, check your auto-debt enrollment or sign up for the first time. When the pause ends, you will receive a statement from your servicer. This will inform you of the date your payment is due, the interest, and payment amount. Your payment will be due no sooner than 21 days from the time they send you this statement.

3. Budget

Prepare a budget to determine how much you can afford in payments. Provided by Powercat Financial are budgeting tools to help identify your expenses and create a spending plan. This will help direct you in the next step, reviewing repayment plans. See https://www.k-state.edu/powercatfinancial/budgeting/ for a spending plan worksheet.

4. Repayment Plan Options

Examine repayment plans to see what works best for you, your budget, your goals, and your needs. You can do this by reviewing StudentAid.gov/loan-simulator/ to review plans. Many people’s situations have changed over the last 2 years, so this is the best way to find what fits best for you. Even if you change your repayment plan, you can go back and change it again later if needed via your loan servicer.

5. Short-Term Relief

If you can’t find a repayment plan that works for you, as a last option, contact your loan servicer to ask for short-term relief or see if you can qualify for an income-based repayment plan. Before making this request, check the loan simulator to see how it could affect your repayment.

6. What if you don’t make your payment?

Understand what happens if you don’t repay your loan. If your loan payment is not paid for 90 days or more, your loan servicer will report the delinquency to the three major national credit bureaus. Delinquency will affect your credit score, making it harder to get credit. After 270 days, your delinquent loan goes into default.

7. Do you know who your loan servicer is?

Your loan servicer is the company that handles the services on your loans, like the billing. You will need to know the servicer in order to go to their website and make payments, change your repayment plan, and other tasks related to your loans.

8. Follow these steps to find your loan servicer:

• Log in and visit your dashboard on StudentAid.gov
• Find the section labeled “My Aid”
• Select “View loan servicer details”

You can keep current on news related to the status of federal student loan repayment via https://studentaid.gov/announcements-events/covid-19 in the event the pause is extended again.

Powercat Financial is a FREE, confidential financial counseling appointment with a peer financial counselor resource for all currently enrolled K-State students. If you have any additional questions about these areas, or if you have other financial questions, schedule a time to meet with us to create a budget, go over repayment plans, and help you get set up with your loan servicer.

Sami Thompson

Peer Financial Counselor

Powercat Financial

www.k-state.edu/powercatfinancial

Why Should I Budget?

Budgeting can seem daunting at first but once you realize the benefits you will appreciate it significantly. If you are reading this and wondering if you need a budget ask yourself the following questions. Do I know where all of my money is going in a given month? Am I progressing towards my financial goals? Am I stressed or uneasy about my finances? If you don’t know the answer to any of these questions, then budgeting is for you! There are many different ways budgeting can benefit you, some of which you might not have thought of. This blog post will cover three ways basic budgeting can help.

How to Budget:

Before learning the benefits you need to learn how to budget. There are three basic steps:

1. Start by using Powercat Financial’s spending plan worksheet. The first column on the left is the estimates column; this is where you put in how much you think you are spending just off the top of your head. Start at the top of the sheet and work down each row filling in values as is applicable.
2. After you have completed the estimates column, it is time to start working on the actuals column. Here you will need your bank and credit card statements or receipts to fill in the actual amount you are spending for each line item in the budget. This might be a reality check if this is the first time you have done this.
3. Finally, create a spending plan for the next month. Using the data you have collected in your actuals column you can set spending limits and forecast expenses for the next month in the next month column. Voila, you now have a budget or spending plan created for the next month. All you have to do now is stick to it!
4. If you find that you are coming up short at the end of the month (negative balance at the bottom), then you can use the need or want columns. These columns are helpful for determining where you can potentially cut back on spending. A need is something you absolutely require for survival. On the other hand, a want is a non-essential item in your budget.

Bountiful Benefits!

Now on to the benefits of budgeting. First, budgeting helps you identify “spending leaks”. A spending leak is an area in your budget where you are spending more than you realize. For example, you might think you are only spending $15 a month on coffee. However after you create a budget, you then realize that you are actually spending closer to $50 a month on coffee. Now that you are in the know, you can set your spending where you would like it to be.

Second, budgeting allows you to plan a path to your financial goals. What is a financial goal? It is a money target that, when hit, will bring you closer to the lifestyle or experience you are working toward. For example, your financial goal might be to buy a house within the next five years. Another might be, paying off your student loans early. Budgeting will allow you to allocate funds to specifically work towards whatever financial goal you have set. Creating and keeping a budget will also help you track your progress to said goals.

Last but not least, budgeting can help reduce stress related to personal finances. By budgeting you remove scenarios where you are at the store wondering if you can afford something. Using the spending plan mentioned above, you can dictate specifically where you want each dollar to go. This will help you decide what you can and cannot afford. In addition, it might also help you find money you didn’t know you had. Budgeting removes the guess work to personal finance and helps you understand the exact impact of each purchase on your financial wellbeing.

Need Help?

Powercat Financial is here to help when it comes to creating personal budgets. We would love to meet with you to talk about the details of budgeting as well as walk you through the entire process. Appointments are free and confidential for all K-State students. You can schedule an appointment on our website here: Powercat Financial. You can also find the spending plan worksheet on our budgeting page here: Powercat Financial Budgeting. In addition to budgeting Powercat Financial can help with anything from understanding student loans to evaluating job offers.

Upcoming Event: Powercat Financial will host an interactive game of life simulation along with Meritrust Credit Union on April 6th from 12:00-1:30pm in the Union Courtyard. Come experience a “real-world” game of Life based on day-to-day financial decisions and learn how to manage your money!

Abram Mugler

Peer Counselor I

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

The First Step in Your Summer Break Journey.

Budgeting can be the first step you need to start your adventure. Whether you are saving for a summer trip or need some help throughout the year, budgeting can be a powerful tool to use. Budgeting is the process of creating a plan to spend your money. This spending plan is called a budget. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. The counselors at Powercat Financial are here to make this first step stress free for you.

We have multiple resources to ease this process on our website at https://www.k-state.edu/powercatfinancial/. While you can do it yourself, we would love for you to schedule an appointment to let us help you. We have a Microsoft Excel spreadsheet that you can start with to get an estimate of what your income and expenses may be. It can be found by clicking on this link https://www.k-state.edu/powercatfinancial/budgeting/ and clicking on the spending plan worksheet. If you decide you want to use this spending plan worksheet to create your budget, here are three easy steps to follow:

1. First you will estimate what you believe your income and expenses are for a monthly period. You will also identify whether the expense is a need or a want.
2. Second you will record your actual income and expenses as determined from your financial records for a monthly period again identifying them as needs or wants. By estimating first, then recording actuals second, you will get a good feel for how in tune you are with your spending habits.
3. The final step is to determine any adjustments that need to be made and to create the spending plan for next month.

There are other options you can use to budget as well. A popular free app that you can use on your phone, or any electronic device is “Mint”. Mint brings together your spending and income automatically for you. All you must do is link a bank account to your new account, enter your budget plan and let Mint do the work for you. It can be set up to send you alerts to remind you of your spending plan goals and current status.

Okay I Have Created a Budget, Now What?

The next step in your summer break adventure is planning your trip. Planning your trip can be an exciting part of your trip. While it can be an exciting aspect it can also be a stressful one. I can surely say I have traveled quite often in my twenty-three years and here are some travel tips I would love to share with you.

• Fly on an Off-Peak Day or Time – Traveling on a Monday or Tuesday versus a Thursday or Friday can give you better deals on your flights
• Expand Your Hotel Horizons – What I mean by this is you do not necessarily need to stay in a hotel on your trip. There are plenty of popular booking websites you can use including Airbnb, Flipkey, and Homestay.
• Open a Travel-Friendly Bank Account – While this may seem like an odd tip, it can be useful when traveling outside of the United States. Having a bank account that does not charge ATM withdrawal fees can aid you in saving money. It is common for banks to charge up to 3% of your withdrawal in fees.
• Compare the Prices of Websites – While it may be tempting to select the first price you see, comparing prices can help you save hundreds of dollars. In my experience of traveling, I created a Microsoft Excel spreadsheet comparing different prices and websites to help me find the best deal.

Additional tips and tricks can be found on https://www.businessinsider.com/travel-budget-save-money-on-vacation-2019-10#be-flexible-with-your-travel-dates-3. If you or your friends need help in this process, we are here to help! Powercat Financial can help you create your budget. We offer free and confidential appointments in-person or by zoom as well. Appointments can be requested at https://www.k-state.edu/powercatfinancial/.

Upcoming Event: Powercat Financial will host an interactive game of life simulation along with Meritrust Credit Union on April 6^th from 12:00-1:30pm in the Union Courtyard. Come experience a “real-world” game of Life based on day-to-day financial decisions and learn how to manage your money!

Dylan Birkinsha

Peer Counselor I

Powercat Financial

www.k-state.edu/powercatfinancial