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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

Grad Sense: A Financial Tool for Graduate Students

Posted on by kdarnell

Thinking about grad school but you just are not sure how much it will benefit you?
GradSense.org is a website that helps you calculate how much you will get paid with a bachelor’s, master’s, doctorate, or professional degree. This website also gives you valuable savings tips, loan repayment options, and job finding tips.

What is the average pay for people that graduate with your degree?
On the home screen it will prompt you with a question asking what your highest level of education will be at graduation. The next question asks what field of study you will attain with your degree. Grad Sense then takes this information and gives you a low median and high level of pay that you can expect after graduation.

How can you save money?
Under the Add It Up tab, Grad Sense gives you examples of ways that you could be saving money on everyday expenses. The compound interest calculator provides information on how much you can expect to save annually based on if you make your coffee at home rather than from a coffee shop, for example, while you’re in school. The calculator then shows you how much you can have saved by the time you retire if you invest these savings after graduation.

Do you want to know how long it will take you to repay your student loans?
Grad Sense shows you the different repayment options for federal student loans as well as some useful links under the Loan Repayment tab. It also gives you an example of how much a student with a $40,000 federal student loan would pay monthly under the standard, graduated, or extended repayment plans.

Need some job tips?
Grad Sense provides information about choosing a job based on the benefits it offers and even helps you develop good salary negotiating skills. Job salary is not everything. Sometimes job benefits can be very helpful, and you should make sure you know what benefits each company offers. After looking at the company’s benefits you need to negotiate your salary. Your job is to know what the salary range is for your position and negotiate your salary based on your experience and skills.

Tyler Larson
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Top 5 Hidden Costs of Your First Job

Posted on by roxanne

1. Clothing

Your favorite jeans and college t-shirt work great when you’re heading to class, but once you enter the workforce you may have to beef up your wardrobe. Depending on the industry you go into you may be required to wear business professional or business casual attire every day. Purchasing these types of clothing doesn’t always come cheap.  About.com estimates that men will spend $125 a month on their professional work wardrobe. That totals up to $1500 annually.

2. Transportation

Depending on what city you work and reside in, other costs of your commute may arise. After you graduate you may need to upgrade your vehicle which will increase costs of auto insurance, loan payments, etc. Transportation costs may also include stress and time away from family or other activities depending on the distance or traffic of your daily commute.

3. Eating out

Even though you may plan on bringing lunch to work most days, you may be obligated to go out to lunch. Many employees treat lunch as a time to network with clients or discuss business. Spending a minimum of $20 a week on business lunches or dinners can end up costing you $1,040 a year. This being a low estimate increasing lunch outings can really add up over time and end up decreasing the amount of money you have to spend on other discretionary items.

4. Travel

With some jobs you may be required to travel. Whether this means traveling locally to meet clients, or traveling across the country, these costs can reduce your discretionary income.  Many firms will reimburse you for travel expenses, but you may have to pay the upfront cost. There are also expenses associated with traveling that your firm may not compensate you for such as time away from your family, meals, and traveling essentials.

5. Taxes

Most people don’t consider taxes when they enter their first job but it is something to be aware of. When you earn more money you may be pushed into a higher tax bracket. This is especially true for students entering their first job who have formerly filed as dependents of their parents. In 2012 those filing as Single on their tax return earning $8,700 to $35,350 were taxed at a rate of 15%. If you earned $30,000 last year you would have been taxed roughly $4,500. As your income increases your tax bracket increases, which means you may end up forking a good chunk of your income over to Uncle Sam.

 

Although that new job offer may sound great, it is always good to look into the hidden costs. Comparing these costs and your compensation is a great way to find out if you need to further negotiate your salary. When looking at an offered salary it is important to analyze the extra costs that take away from your discretionary income in order to accurately evaluate the offer. Budgeting for these extra expenses can help you in not being caught off guard when they arise.

 

Sydney A. Henderson
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc

Evaluating Employee Benefits and Perks

Posted on by roxanne

When considering a job offer, many people think the most important factor is the salary. Actually, it is just as critical to analyze the ‘secret’ money – benefits and perks that are offered by an employer. Some benefits to consider include a comfortable and casual work environment, flexible work schedules, an option to telecommute, gym memberships, tuition reimbursement, and a casual dress code.

Typical Employee Benefit Packages

According to the Bureau of Labor Statistics, the average number of annual paid holidays is 10.  Paid leave time also can include sick and maternity leave. Almost half of medium and large employers offered either a defined benefit or a defined contribution pension plan. But they may have some requirements. For example, you can join the plan after working a required number of years for the company. Or you must work for the company a certain number of years before you become “vested” and own the company contribution portion of your plan.

Every company has different requirements when they offer health insurance.  Some may require an initial premium payment  after which, the policy itself will cover you and your family.  Be sure when making insurance selections that you know whether or not the plan will include dental, vision or disability coverage and whether or not there will be any out-of-pocket expenses. Life insurance is also a common benefit associated with most insurance solutions. Employers usually provide an amount equal to a percentage of your annual salary for insurance needs with an additional option to purchase life insurance when necessary.

How to Evaluate Perks

Employers believe that an advantageous way to attract top employee talent is offering perks and benefits outside of the initial base salary. However, not all benefits are necessarily the best fit for you. The true value of perks being offered from the employer should be determined not by the overall quantity or dollar value, but by the benefits that make a true impact on the lifestyle you live. As an example, if living an active healthy lifestyle is important for you as an employee, it may be valuable to look for companies that offer gym memberships to employees. An extreme example of this would be looking for companies that have a gym inside of the office as this perk is becoming more and more popular in the modern day workplace.  Another example of perks would be companies that offer a flexible work schedule. If you are not a morning person, being able to come in later and be more productive creates a win-win situation for both parties! Just remember, when a company is a better fit for you, you are also a better fit for them.

 

Angela Li
Peer Counselor I
Powercat Financial Counseling
www.k-skate.edu/pfc

It’s almost time to graduate! Money tips for college graduates:

Posted on by roxanne

If this is your last semester at Kansas State University then there is no doubt that you are busier than ever.  You are sending out résumés, preparing for interviews, applying for graduation, and finally purchasing your cap and gown!  Everything you are doing now is exciting and your life is about to change dramatically as you transition from being a student to being a full-time employee.  As you’re building your career and life outside of college there will be many financial decisions that you will need to make.  Here is a list of a few things to consider as you prepare for graduation and beyond.

How are you going to manage your debt?

Many students will graduate with student loans that need to be paid off.   The first step you will want to take as you get close to graduating is to find out who your loan servicers are and set up accounts with them.  Your loan servicer is the company that hosts your loan and who you will be making payments to.  After you have set up an account you will want to decide what kinds of payments you will want to make, such as standard or graduated.  Powercat Financial Counseling has brought SALTmoney.org to Kansas State University students and alumni and this is a great interactive website to use to understand what your loan payments will be.

Do you know your credit score?

Your credit score is a number representing your creditworthiness based on past and current credit files.  The range of credit scores is from 300 to 850 and new graduates need to be aware of the dangers of a poor credit score.  Bad credit will make it hard to get an apartment, car loan and even a job.  There are many ways to build your credit score, but one simple way is to make all payments on time and never miss a single payment.  You can view your (unofficial) score for free anytime at www.creditkarma.com.

Do you have a budget?

Upon graduating college and obtaining a job you will start to have a lot more income, but also more expenses.  It may be hard to begin managing your money and new expenses so it is a good idea to start sticking to a budget.  A budget is not meant to have a negative connotation; it is simply a way to control your money instead of letting your money control you.  If you would like to start forming a budget Powercat Financial Counseling has spending plan worksheets available online at www.k-state.edu/pfc/budgeting.

Will you start saving?

Hopefully when you graduate you will begin to have money available for savings, and your employer is likely to offer retirement plans such as 401(k)’s.  If your company will offer to match your contributions to your 401(k) then you should take this opportunity, it’s basically free money!  Another reason to think about saving as soon as you graduate is that interest on your savings grows exponentially so the sooner you start saving, the more you will have when it comes time to retire!

Are you insured?

Students used to be removed from their parent’s health care insurance immediately after graduation; however under the Affordable Care Act of 2010, parents may now keep their children on their insurance until age 26.  This may be a relief to a few of you because it gives you a little more time to build up income before you must pay for your own insurance.  As you graduate and accept a full time job you will want to assess your company’s health care plan and talk with your parents about whether or not you will stay under their plan for a little longer.

 

There are many other decisions that will need to be made around graduation time and countless other questions that you may have, but hopefully this list will help you get started thinking about your financial future! For further questions, please request an appointment at www.k-state.edu/pfc!

 

Wende Witthuhn
Peer Counselor I
Powercat Financial Counseling
www.k-state.edu/pfc