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Graduation budgeting for a new cost-of-living

Posted on by Cheryl Rauh

 

Seniors, are you starting to feel a sense of financial stress or uncertainty when it comes to the cost of living in the new area you are moving to? This stress can occur from moving from an apartment to a house, transportation costs in a new area, or maybe even the cost of groceries in that area. These factors can be calculated and budgeted out to ensure that the financial stress and uncertainty you may experience can be minimized if not eliminated with two simple steps!

Step 1: Start by using a cost of living calculators such as Nerd Wallet’s cost of living calculator or Bankrate’s cost of living comparison calculator to estimate the cost of living in that certain geographic area. This could be especially useful to use when graduating from college and moving to a new city or when you are looking at job offers and want to know if it would be an acceptable offer based on the cost of living in that area.

Step 2: Once you have utilized a cost-of-living calculator to get that estimated amount that you will need to make to maintain your lifestyle in your new city, BUDGET & PLAN! Your next step requires you to take a step back and create a budget or tweak your existing budget to account for the changes in different categories based on the price. Creating a budget for this change can lead to lower stress levels when it comes time to move because you will have a plan in place. Budgeting also requires you to create a habit by being disciplined and holding yourself accountable to this budget.

Below are three cities and current common expenses taken from the NerdWallet Cost-of-Living Calculator.

Manhattan, KS

  • 2-bedroom apartment: $944
  • Gallon of Milk: $2.11
  • Gallon of Gas: $3.30
  • Movie ticket: $13.75
  • Cost of a doctor visit: $135.63

Phoenix, AR

  • 1-bedroom apartment: $1,996
  • Gallon of Milk: $1.93
  • Gallon of Gas: $3.82
  • Movie ticket: $9.87
  • Cost of a doctor visit: $99

Baltimore, MD

  • 1-bedroom apartment: $1,823
  • Gallon of Milk: $2.41
  • Gallon of Gas: $3.30
  • Movie ticket: $13.41
  • Cost of a doctor visit: $83.42

Looking at these three locations and the different costs associated with each, we see that a budget can help you understand and anticipate expenses so that you know what lifestyle to expect. Don’t just look at one big expense, like housing, breakdown the overall expenses associated with living in your new location to have an effective plan. Little costs (or savings) add up.

Remember – no matter the circumstance, it is never too late to create a financial plan to set yourself up for success!

Don’t hesitate to stop by Powercat Financial to get help starting this budget now! Powercat Financial is here to help assist with any financial topic and concern you may have! We offer free and confidential peer-to-peer counseling sessions in person or via Zoom at your convenience. Not only can we talk about budgeting, but we can go over other topics such as student loans, credit, or savings as well. Appointments can be made online.

Halle Schindler
Peer Counselor I
Powercat Financial
www.k-state.edu/powercatfinancial 

Planning for your Post-Graduation Life

Posted on by Cheryl Rauh

Graduation is right around the corner!

Whether you are a freshman just beginning your academic career at K-State or a senior finishing up those last classes before May, thinking about starting your career, moving to the city of your dreams, or all the people you can meet while out in the world can be thrilling. However, have you thought about the details of what your future might look like? How your expenses may change with college life behind you? How your earnings could change with your new degree, or what your budget might look like after graduation? Planning ahead and answering these questions can be crucial when jumping into the world outside of college. This blog post covers some of these concerns and provides resources for further exploration.

 Step 1: determine a realistic starting salary

Before graduating from college and entering the workforce, students apply for all of the jobs that align with their passions in cities or towns that they feel comfortable with living in. One aspect that some students struggle with is knowing what might be a realistic salary for a starting position in their field. A 2022 survey found that most students over-estimate their starting salary by tens of thousands of dollars. This can result in disorientation and stress from that over-estimation.

Screenshot of the post-graduation salary information dashboard.

In order to avoid this, you need to set a realistic sense of your future entry-level salary and the cost of living. There’s good news though! There are tools to help. One of the tools available is the Career Center’s Post-Graduation Statistics, which includes a salary dashboard. This dashboard provides basic statistics collected on entry-level salaries organized by major.

When you use this tool, pay attention to how many reported salaries were used to create the averages. Some majors have very few submissions which can skew the data. If you look up your major and you find it has 20 or less, look for additional salary info through an alternate resource. Want to make sure this tool is accurate for future K-Staters? Report Your Job on the K-State Career Center website!

Other resources you can use to determine possible salary include careeronestop.org, myplan.com, salary.com, or the salary calculator found through jobsearchintelligence.com, which allows you to filter by location and years of experience.

Step 2: calculate the cost of your living expectations

Great job taking the first step for your future financial well-being! The second step that you need to take to prepare for the creation of a post-graduation budget is to figure out where you may want to live in the future and research the cost of living in that area. With this cost-of-living calculator from NerdWallet you are able to take where you currently live and contrast it with where you would like to live in the future.

Screenshot of the NerdWallet cost-of-living calculator tool.

This calculator will help you be more mindful with your budget. A salary of $100,000 could get you far here in Manhattan, Kansas but maybe not so far in New York City, where costs are much higher. Being able to note this difference is the crucial second step in setting a realistic expectation for your future self and setting yourself up for that healthy post-graduation budget.

Step 3: Create a post-graduation budget

Graduation and life after college can cause dynamic shifts in life. Whether it be moving to an entirely new city or having to get used to a whole new schedule, the transition from college life to work life can be huge! The last and final step of prioritizing your future financial well-being and planning for post-graduation is to anticipate likely changes and create of your post-graduation budget.

Another tool provided by Powercat Financial that is helpful with this goal is our Monthly Student Loan Debt Service Calculation sheet. It’s a short sheet that’s easy to fill out and covers the basic expenses such as rent, student loan repayment, and food. Input the salary you’ve been offered or the average starting salary you determined in step one. Then fill in realistic expenses for what you would think your future might look like. Start with familiar expenses like rent and food, then add in things you may never have covered before.

Screenshot of a monthly student loan debt service calculation spreadsheet.

One tricky thing to add is the current expenses that have been covered by a parent or guardian that you may take on when you graduate. Some of these expenses could include streaming services like Netflix, cleaning supplies for the apartment, car insurance, and health benefits. It’s best to brainstorm all of the potential expenses you might have that aren’t a part of the sheet above and add them. Do you want to get a pet? Will you need to travel home for holidays? Lots of your expenses may change. The more detail included in the budget the better!

Step 4: Enjoy life and adjust plans as necessary

Once you have completed step 3, you’ve set a foundation for your future financial well-being. The neat thing is, after you have graduated and can determine real numbers for these expenses, you’ll be able to update the spreadsheet, and your budget will adjust automatically. As more of these real numbers get added, the more attuned your budget will become to your life. Overall managing your expectations and creating a post-graduation budget can not only make life easier, but it can also help avoid lots of needless stress by helping you plan ahead!

Need help mapping your future budget?

If you would like to have some guidance or a peer to help as you draft your budget, Powercat Financial is here for you! We are a free service where your fellow students help with whatever financial questions you may have. Whether it be budgeting or maybe helping you calculate the amount of student loans you need, we would love to help. Our goal is to facilitate the financial well-being of each and every Kansas State University student. Schedule with us today through Navigate!

Jackson Harvey
Peer Counselor I
Powercat Financial
www.k-state.edu/powercatfinancial

Worried about student loan repayment? Don’t stress, we are here to help!

Posted on by ekoochel

Are you a graduating college and worried about student loan repayment? With midterms, finals week, and projects all wrapping up and coming to an end, the last thing we want to think about is student loans, but with a little planning, they are nothing to be concerned about! We will discuss the process of paying back student loans and how to insure the process is a breeze!

Step 1: Figure out who your student loan servicer is:

Many times, people think that student loans are paid back to their university or the government directly. This is NOT the case. While you are borrowing the money from the government, they have loan servicers who handle the repayment of student loans. If you do not know who your servicer is, the first step is to log in to the federal student aid website (WWW. Studentaid.ed.gov). After logging in, you will find all of your student loans listed, with information such as loan balance, interest rate, loan servicer, and type of loan. After reviewing your loans and finding your loan servicer (CornerStone, FedLoan Servicing, Granite State, Great Lakes Educational Loan Services Inc, HESC/Edfinancial, MOHELA, Navient, Nelnet, OSLA Servicing) you can log in to their personal website and create an account!

Step 2: How much will you pay each month:

Student loans are paid back on a monthly basis. There are many different repayment plans that are listed below in the next section, but before you pick a repayment plan, it is good to figure out how large of a payment you can financially handle each month. There are many different student loan repayment calculators online but the easiest to use is the Federal Student Aid calculator. You can find it at www.studentaid.ed.gov. This calculator automatically loads your student loan information into the calculator and offers a table of monthly repayment estimates for each specific loan repayment option. With this, you can get a good idea of which monthly repayment plan will work best with your financial budget.

Step 3: Student Loan repayment options:

Once you have created an account on your servicers website, it is time to decide how to take on student loans repayment. The great thing about student loans is that you have a 6-month grace period before you have to begin repayment, with most loans. If you have not used any of your grace period, you do not have to start repayment on the loans for six months. *With unsubsidized loans, we recommend that borrowers begin repayment on the accruing interest before the sixth month grace period ends. Once the grace period ends, any interest that has accrued on your loans will be tacked onto your loan balance, which will cause you to pay interest on top of that accruing interest.* There are many different repayment plans that are offered when paying back student loans. The standard repayment plan is equal monthly payments for ten years (120 months). If your loan balance is above $30,000 and you are worried that monthly payment will be too high, you can apply for extended repayments, which divide the loan up into equal monthly payments over 12-30 years. There are also income based repayment plans. These are for borrowers who believe that they will not make as much money in their first few years working, but by the end of repayment will have a higher income. With this plan, you will pay a lower monthly payment in the beginning, but periodically through repayment, your monthly payment will increase. Another option available is Income-driven plans. Under this plan there are a few different options that take a percentage of your income and formulates a payment based off of the information provided. If you do not specify, you will be put on a standard repayment plan and will need to contact your loan servicer to be put on a different repayment plan.

Step 4: How to save money with loan repayment:

There are a few different tips and tricks that you can utilize to save money with student loan repayment. The first step is to enroll in an automatic payment plan. Loan servicers offer a .25% interest rate discount to customers who enroll in an autopay program. This will also insure that you do not miss a payment, which could hurt your credit score.

Another way to save money is to be proactive with the loan repayment process. When you make the monthly payment, specify that you would like the put the payment towards the loan with the highest interest rates. Paying down loans with the highest interest rates first, will insure that over time, you are paying the lowest amount of interest possible on your student loans.

There are also ways to get a portion of your student forgiven. If you are planning on working in a public service sector, you are eligible for some type of loan forgiveness. The Public Service Loan Forgiveness is for anyone who works in the public sector (nonprofit, government, state job), and makes 120 qualifying payments. These payments do not have to be consecutive to qualify. If you are a teacher and new borrower, there is a Teacher Loan Forgiveness plan as well. Under this plan, you must have taught full time at a low income school for five consecutive years. Under this plan, you are eligible to have up to $17,500 of your student loan balance forgiven.

To be eligible for these forgiveness programs, you are required to make the minimum required monthly payment until you meet the time requirement.

There are also rural opportunity zones within Kansas that allow for student loan forgiveness. To be eligible, you must live in a rural Kansas County and hold at least an associate’s degree. Under this plan, up to $15,000 can be forgiven (20% of loan balance each year up to $3,000, for 5 years). For more info on this, visit www.kansascomerce.com/rural

Step 5: Don’t Stress

Armed with these tips, you are ready to take on the task of repaying student loans. With proper planning, student loan repayment can be easy and stress free. If you have any more questions regarding student loan repayment, or any other topics, please feel free to schedule an appointment with Powercat Financial. Either I, or another counselor would be happy to assist you!

Preston Tucker – Peer Counselor I

Practical Ways to Reduce Your Spending, Increase Your Savings, and Achieve Your Goals

Posted on by ekoochel

If you are like most college students, you might not have a budget in place, or if you do have a budget you may find it hard to stick to. Budgeting is one of the most important ways to help you get on track and stay on track to achieve your financial goals. If you can learn to budget well early on, it can help you be prepared for when you begin paying on your student loans, have a mortgage payment due each month, or are trying to determine how much you can set aside for retirement while still paying the bills. So, how do you actually do that? What are some practical ways you can make changes to your budget…and stick to them?

  1. Estimate your current income and expenses

First, in order to have an idea of what you are currently spending, it is important to estimate where you are at financially. This will also help you see what you believe you are spending. You can come in and meet with one of our peer counselors to walk through this first step of the budgeting process together.

  1. Compare those estimates with reality

Once you have your estimates in place, compare those numbers to your actual income and expenses. If you use your debit card for everything, pull up your past 1 year’s worth of bank statements and average out what your monthly expenses and income were. Using a full year helps give the most accurate picture so that you can account for any extra income you may have from a summer job as well as increased or decreased expenses you’ve had in the past year. If you don’t use a debit card or have any past records of your finances, no worries. You can start keeping track through different websites, apps, receipts, or by writing it down. Some websites will allow you to manually enter in your expenses as well as link with your checking account. This can be a great tool especially if you use both cash and your debit card. One great website to use is www.mint.com.

  1. Set SMART goals

Having goals almost always helps us focus on what it is we are wanting. Setting financial coals can also help you stay on track in order to achieve your goal. Whether you are hoping to study abroad next semester, save enough money over the summer for next year’s tuition, or plan to backpack Europe after graduation, you need to have goals to help you achieve these dreams. The first part of making a SMART goal is to make sure it is Specific. If your goal is vague and has no direction, it will be hard to stick to. The next part is to make it Measurable. If you don’t know how much you are needing to have or how much you should be setting aside for a goal, that can make it difficult to contribute toward the funding of that goal. Having Achievable goals are also really important. You don’t want to set a goal that you know there is no way you can attain. Right along with being achievable, your goals need to be Realistic or Relevant. You want to make sure that the goal you have set is something that is actually what you want and something that makes sense for you personally. And the last part of making a SMART goal is to make sure it is Time-Sensitive. All goals typically have a date that you want to achieve them by. Having a set date for when you want to have the goal achieved or having a time increment where you will always save a specific amount of money will make planning for that goal so much easier. An example of a SMART goal is:

I will set aside $20 each week for 3 months to save $250 for my summer break trip to my Uncle’s house.

  1. Determine a budget that you want to stick to

After you have your goals in mind, you can start determining what you want your budget to look like. Just like your goals, you need to make sure your budget is realistic. If you cut out all of the fun stuff, it can make sticking to your budget extremely unsatisfying. Reducing your expenses will likely be more effective than completely cutting them out. Evaluate what is important to you, and allocate the amount of money you think is appropriate. Also, make sure you are setting aside money for savings. It is especially important that you have an emergency fund. If an expense comes up that you weren’t expecting, and the only money you have saved is for a fun trip, it is going to be a huge bummer to dig into that savings. But, if you have an emergency fund in place, you can be prepared for those unexpected expenses and not drain the funds you had been planning for your goals.

  1. Find the tools that will help you stick to your budget

If you found out that you spend $25 on coffee each week, one way to reduce this amount is to start making your coffee at home. Another option to reduce that expenditure would be to only go to a coffee shop 1-2 times a week instead of every morning. Although Redbox movies and vending machines typically don’t seem like much money, if you are a frequent visitor, that money can begin to add up. Ways to reduce this could be to borrow movies from friends and family, or bring snacks from home with you when you go to campus. ATM fees are one expense that can be avoided if you plan ahead properly. Pulling out money from your bank or getting cash back when you go to Walmart can help wipe-out those ATM fees that add up fast.

One area where a lot of students overspend is in eating out. It’s a great way to socialize with friends, and it is also super convenient when you don’t have the time to make a meal. One way to reduce this cost could be to prepare meals on the weekend for the week ahead. If you have quick meals that you can pull out of the freezer or fridge and heat up, it is a fast and cheaper solution than grabbing the 8th box of pizza in 2 weeks. Another option is to go places that have student discounts or send out coupons. Many restaurants have apps or will send emails that can help reduce the cost of going to eat there. The great part about living in a college town as a student is all of the discounts that are available. Check out the local restaurants to find out when and what deals they offer, and have your student ID handy!

If you spend a lot of time with your friends doing activities that cost money, let them know you’re wanting to save for a specific goal and offer some suggestions for a free activity you can do together. Or, if you’re both planning on going on the same trip, it is a great way to hold each other accountable to your savings goals. Another option some people like to use is the envelope method. Once you have figured out how much you are willing to allocate toward each category of your budget, put that amount of cash in an envelope so that you’ll know once the money is gone, you don’t have more money to spend for that particular area until the next month. Make sure you don’t lose it! www.mint.com can also help you keep track and send you updates when you are getting close to your spending allotment for the month.

  1. Revisit and update as your financial situation changes

Budgeting is not just a one-and-done thing. It is something that will continually need to be monitored and updated as your situation changes. If you get a raise at your job or move to a new place that is more expensive than the place you lived in last year, you will need to reflect those changes in a modified budget. Taking steps early on to reflect those changes will prevent you from running into the situation where you run out of money because you made the same amount each month but now had increased expenses.

Budgeting will take some discipline and habit, especially when you are first starting out. Over time, it will become more routine and manageable, so stick with it. If you would like help starting the budgeting process, please make an appointment with us. One of our peer counselors would love to meet with you and walk through these steps with you. For more information on budgeting, feel free to visit our website and click on the budgeting tab for a copy of our budgeting worksheet and other budgeting tips. Other topics we would be happy to assist you with include student loans, evaluating job offers and employee benefits, and credit. Make an appointment by going to www.ksu.edu/powercatfinancial to set up a free and confidential appointment.

Lindsay Adams – Peer Counselor II

Road trips ahead!

Posted on by ekoochel

A great way to spend the weekend is traveling around the country to see new and exciting places. Whether it is following a sports team or visiting friends, the possibilities are endless when developing a road trip. Not to mention, you gain a greater appreciation for the destination after a road trip of sightseeing and adventure. Being in a centrally located area of the United States makes it easy to go to different places. Colorado, Missouri, and Texas are just some of the states that would make a good weekend trip! Although flying may be faster, it is much more expensive than driving. Here are some steps to ensure a successful road trip with your friends on a budget.

The Destination

This should be the number one question when traveling. Where do you want to go? Once you have selected your destination you can begin planning how long it will take to get there, and determine how long you would like stay. It’s important to note that in some places your will dollar will not go as far. For example, a trip to a larger city may be more expensive than a trip to the countryside. One way to save on expenses is to travel in a group, then you can split the cost of food, drink, transportation, hotel, etc. You can also save a considerable amount of money by making plans early.  Take advantage of deals and discounts that come along with booking your trip in advance.

The Travel

For some people traveling is the worst, but for me traveling is half of the excitement. The travel makes the place you are going a lot more special in my opinion. Depending on where you are going, it could take a couple of hours or a day to get to your destination. One side effect of being on the road for so long is unnecessary stops or expenses. You can avoid this by packing your own food and drinks so that you do not have to spend money at a gas station, or on fast food. When you are with other people be sure to split the cost of gas, it can be one of the greater expenses for the trip, but minimized if everyone contributes.

There are several expenses that come along with traveling. Hotel, food, and entertainment are three major expenditures on a road trip. You can reduce your spending if you ratio your spending and plan your trip ahead of time. You can start by putting a little money aside each week to start saving for an upcoming trip.  Come see Powercat Financial for all for all of your budgeting and financial questions. We would be happy to help you set up a savings plan to ensure your best road trip yet!

Joshua Zdeb

Peer Financial Counselor I

Ski the Slopes the $mart Way

Posted on by ekoochel

Spring Break is just around the corner and that means it’s time to plan your ski trip! There are many venues and resorts you could choose to go to while on your trip and for a great price, if you book ahead. You must keep a few things in mind while you’re planning your budget friendly trip.

How many people are going?

You must know the amount people going, not only for traveling and carpooling purposes, but also for sleeping accommodations. Trivago website, a popular travel planning website, says that you should look ahead of time and book a hotel at least one month in advance in order to find the cheapest prices. So mark it on your calendar when you want to leave for your ski trip and book your hotel in one-month advance. This will ensure you save money, rather than just booking it the day of and paying an inflated price due to the popularity and demand for hotels because of skiers during spring break. http://www.hospitalitynet.org/news/4070411.html

How many days are you staying?

The amount of days you stay is not only important for booking the hotel and knowing how long to book it, but for also financial reasons as well. It is statistically proven that the more days you spend skiing, then the less you spend each day.  Refer to the photo below. You can notice that you spend less on the 5th day compared to the 4th day and so on and so forth. Keep in mind, the longer you stay the less expensive per day it is for you, BUT the total price will keep increasing. Ski resorts want you to stay longer and that’s why they decrease the price per day. But you should have a set amount of days you are planning on staying and stick to that instead of staying longer and longer because of the good price because this could affect your budget substantially. This should be taken into consideration when planning your ski trip budget.

Do you have Ski Equipment?

Another thing you should take into consideration is the ski equipment you need in order to ski. Do you have ski pants or skis or ski poles? You need to know ahead of time where you plan on getting your equipment if you don’t have any. You should compare prices and not settle for the first one you come across. Maybe ask family members or friends if you could borrow ski equipment from them so you can keep the cost of the trip low.

What’s your Budget?

Last but not least, you should know your budget and how much you want to spend on your trip. You will have to know the cost and fees to go skiing and also the other expenses that will occur, such as food and gas expenses. There are several tools you can use in helping you budget for your trip. One tool is an app you can download on your phone called Mint. This app allows you to connect your bank and credit card and thus tracks the spending. You can say you only want to spend X amount on this category and mint will help you keep track of how much you are spending and let you know how much you have left. It can be a very helpful. Another helpful source would be the budget spreadsheet on the Powercat Financial Counseling website www.ksu.edu/powercatfinancial. If you click on the Budgeting tab on the website, then you will be directed to lots of great information and excel spreadsheets that you can utilize in your budgeting process of your trip planning.

And finally, don’t forget to have fun. You can make a lot of memories and have a ton of fun on college ski trips without breaking your bank. You just have to remember to create a budget before you go and map out all of your expenses. Keep track of your money when you spend it and mentally think, Is this part of my budget? This will help you have fun and also not stress about money. Now you should be ready to Ski the Slopes the $Mart Way!

Hannah Eilert – Peer Financial Counselor I