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Thrifty Gifting

Posted on by roxanne

The holidays can be a joyous time full of family, food, and gifts.  During this exciting time, it is important to keep a close eye on your spending.  On November 13th, Powercat Financial Counseling hosted the event Thrifty Giving to help K-State students manage their money during this potentially stressful season.  Listed below were some key tips mentioned at the event to help students stay within their means during the holidays.

Plan Ahead:

  • Set aside money each month that will go specifically towards those holiday gifts.  It can be very stressful to have a list full of gifts but not the money to buy them. Planning ahead and saving will allow you to relax because the money will already be saved up.
  • Staggering purchases throughout the year spreads out your spending and can make purchases more manageable.  Also, gifts may not always be the cheapest during the famous Black Friday Sales.  Monitoring prices of gifts you are interested in can help you get them cheaper than during the holiday season.

Get Organized:

  • Have an idea of who you will be buying gifts for and create a detailed shopping list according to the money you have saved.
  • Create a holiday budget and stick to it!!!

Be Creative:

  • To shorten your gift list suggest a gift exchange with your family or friends.
  • Big family dinners can be stressful, especially for the host.  Potlucks are a great way to spread the responsibility and costs around.
  • If your holiday plans involve traveling it is best to book as early as possible.  Airline tickets get more expensive as the holidays get closer.  Also, try to be flexible.  Instead of departing on a Friday consider Thursday.  Flights over the weekend tend to be more expensive.
  • The Holidays are a great time to use your Pinterest Boards!!!  Homemade gifts are so thoughtful!

Shopping Warning:

Consumers need to be careful with department store credit cards.  During the holiday shopping season stores often offer a percentage off your total purchase if you open a credit card account with them.  Shoppers may do this at every store they visit with the intentions of cancelling the credit cards once the transactions are complete.  This allows you to save money in the short-term; however, we discourage this tactic because doing this can actually decrease your credit score.

In addition to the helpful information discussed, participants also enjoyed an evening full of apple cider, delicious desserts, and prizes.  Students battled for country stampede tickets, holiday food baskets, and much more during games of holiday-themed family feud.   This fun event was just the thing to get students prepared for the exciting holidays ahead.  If you would like more information about how to cut spending and stress during the holiday season, you can make an appointment with Powercat Financial Counseling at www.k-state.edu/pfc.

Heather Gibson
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc
 

Beware of the “One Month Free” Offer

Posted on by roxanne

Several online services such as Netflix and Hulu offer tempting one month free opportunities, but here is why you should be skeptical about signing up for them.  It is no secret that college students usually live on a tight budget.  Often times that means there is not a lot of money going around towards entertainment.  You might see the one month free offer and think that signing up for it isn’t a big deal because you will cancel their subscription at the end of the month.  It is not that easy!

Those online services make that offer for a reason.  They hope you will either get hooked on what they are providing or that you will simply just forget to cancel it.  And it works!  All too often the servicer gets exactly what they want from tricking the consumer into using their product for free.  That could quickly turn into a very costly decision for you.  To sign up for that offer, keep in mind that you have to give them a lot of personal information which includes your credit card number.  At the end of the first month, they will start billing you without even notifying you!

When you add up the costs of these services, they likely are not worth it while you’re on a tight budget.  Common providers of these services cost anywhere from $7 to $10 each month.  That might not seem like a lot, but when you realize the cost is anywhere from $84 to $120 per year, it might put it in a little bit of a different perspective.  Likely, that’s a big chunk of your budget.  Play it safe and don’t take the one month free.

 

David Biggs
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Joining Finances?

Posted on by roxanne

Are you a newlywed or thinking of joining your finances together with your significant other?  Instead of jumping in head first, you should do your research.  Here are some tips to consider when deciding how to join your accounts.  Remember both parties need to communicate, decide on a joint or individual account, or both, and ask about online banking.

Talk openly and honestly about finances with your spouse so you can begin to understand how they handle money.  Both parties involved need to decide how they will share the task of managing their money and expenses.  Take into consideration each other’s strengths and weaknesses; maybe one of you is more organized with money and should be in charge of paying the bills.  Agree on a budget to plan for everyday expenses and reach long-term goals together.  Set some ground rules, such as which types of expenses you need to decide on together, and how much either of you can spend without consulting the other party.

Then, you must decide if a joint account or individual accounts works best for you.  If you are having troubles deciding if joint, individual, or both is best you are not alone.  Many couples open joint accounts and pay all their expenses jointly.  Other couples choose to have one joint account for shared expenses such as housing payments, and separate individual accounts for personal items such as clothing.  Still others prefer to keep individual accounts, and share the bill paying duties.  If you do choose joint accounts this means shared responsibilities.  Either of you can withdraw or transfer funds, and make payments.  If one of you overdraws the account or bounces a check, both of you are liable.  Each person will need the appropriate information and identification with him or her when applying for a joint account.  This includes Social Security numbers, driver’s license or other ID numbers, and employment information.  If you apply in person, you will both need to sign the application.

For joint checking accounts, and savings accounts with check-writing privileges, you get one checkbook.  You can both access the account, and any other accounts you have, through online banking.  Banks will have each of you choose your own username and password, so you and your spouse will have access to your joint accounts, and you alone will have access to your individual accounts.  You can view account balances and history, receive your bank statements online, transfer money into your joint account, set up services, and more.

Remember, there is not a “correct” way to join finances with another person, but it is important to make the best decision for you.  This decision will come with communicating and compromising on the best option to manage your money together now and in the future.

For more tips and ideas see http://news.yahoo.com/tips-combining-finances-getting-married-213600423.html and http://www.huffingtonpost.com/learnvest/love-and-money_b_1870705.html.

 

Ronika Ledesma
Peer Counselor II
Powercat Financial Counseling
www.k-state.edu/pfc

Income Based Repayment (IBR)

Posted on by roxanne

Graduating soon with an overwhelming amount of debt?  Will your salary not be enough to cover it?  You might be able to qualify for the Income Based Repayment (IBR) plan.  The repayment plan is a new way to make your federal student loans more manageable.

The idea behind IBR is to allow for lower monthly payments based on your income and family size.    The loan payments are capped at 15% of your discretionary income.  This is decreasing to 10% in July 2014.  Discretionary income is defined as Adjusted Gross Income (income before taxes) minus 150% of the poverty line for your family size.  You may have a payment of $0 if your income is less than 150% of the poverty line!

You must reapply every year to stay on IBR.  However, if you do so for 25 years, your remaining debt and interest will be forgiven!  For new borrowers starting July 2014, this time period will decrease to 20 years.

If you have a public service job, IBR has more benefits for you.  You may qualify for public service loan forgiveness after only 10 years.

For more information, see www.IBRinfo.org.

 

Kari Christensen
Peer Counselor II
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