Sarang Ahuja | Finance

Leader, Financial Expert, Game Changer

Tag: Finance (Page 1 of 4)

Secret to Negotiating a Raise—Sarang Ahuja

The Secret to Negotiating a Raise

Talking about compensation with your boss can be a hard subject to broach. Because of this, many don’t know how to properly negotiate when it comes to talking about money, especially when the prospect of a raise is on the table. As yearly reviews come and go, many employees will consider entering into a conversation with their bosses about whether or not they deserve a raise, but most will not receive the compensation that they think they deserve.

The first step to working toward a raise is being realistic about your abilities and your contributions to the company. Look back at your recent efforts and be honest with yourself about what you deserve based on that. If you want a solid raise, you’ll need a good case for it. On average, slightly under 3% of company revenue goes toward raises, but the top percentage of employees are allocated more funds for raises than anyone else.

Nobody knows you better than you, so take the time to compile a list of your accomplishments. Have you gone above and beyond to help out a coworker, or stayed late to assist with a problem? If you’ve taken on recent responsibilities, be sure to highlight those as well. Use any quantitative data that you can find; solid figures of how a company has benefitted with your work are indisputable evidence of your prowess. Don’t wait until the opportunity for a raise comes up; start as soon as possible.

Think of this compilation as a portfolio, and include any documents that you think might be beneficial. Save emails from people that have praised your performance, and include copies of any certificates or degrees that you may have earned in that time. If you have projects that you can include, integrate them in as well. The more evidence you have on your side, the better.

Another way to prepare for a discussion about a raise is finding evidence of what people in your position with your tenure make. If you know exactly what you are theoretically worth, it gives you a starting point for negotiations. However, you should also account for the environment in which you live; if you’re from an area with a lower cost of living, the percentage that your income increases might be lower than in a larger city. Company size is also a determining factor in how much you can expect to make.

Once you’ve gathered the proper rationale for a raise, it then comes time to speak with your boss. The best, and most expected, time to ask is during a year review. If you ask outside of this period, acknowledge that this is an unusual case and that you’re asking for a specific reason tied to your recent actions.

When negotiating, be clear and factual. Tell your boss that you’re looking for a raise in compensation, and follow it up by hitting a couple of the broader points that you’ve come up with before delving into detail. Never make the subject of a raise personal; by stating that you need more capital for a wedding, baby, or something similar, you lose some of the credibility that you’ve built up. Instead, focus on what you’ve done for the company and why that warrants a change.

If your boss turns down your request for a raise, turn it into an opportunity. Be honest with them and ask about what you’d need to do to secure the raise that you’re looking for. It can also make a good impression if you ask about the possibility of taking on more responsibilities in the future. Regardless, keep your responses measured and don’t burn any bridges. In the event of repeated rejection despite outstanding job performance, it may be time to consider other employment options.

No matter what you do, it’s still a tough subject to approach and negotiate. But, as with anything else in business, good preparation and presentation of facts is the best way to sway a potentially difficult audience to your cause.

Talking to your Kids about Finance—Sarang Ahuja

Talking to Your Kids About Finance

It can be tough to broach the subject of money with kids. After all, they likely haven’t had a real job or had to worry about their own finances early on in their lives. For children, adults appear to have their finances figured out, with magical credit cards that allow them to pay for everything and no knowledge of what goes on behind the scenes. Talks about the value of saving money are generally the baseline measure taken to help kids understand finance, but even then, the idea of spending and saving money may seem a world away to them.

I’d like to share a few of the ways that you can talk to your kids about money in a way that can prepare them for the future.

Explain how your finances work.

Children are renowned for their curiosity, and when speaking with them, it helps to treat them like people and not talk down to them. That said, it can be difficult to explain finances in terms that they would readily understand. But some of the basics—how a credit card must be paid back, how monthly expenses can define a budget—can be crucial in giving your children a sense of the effort that goes into managing money.

With the amount of automation that comes with managing finances, it can seem like an effortless process to an outsider, something that anybody can tell you is certainly not true. Dissect the accounts, payments, and taxes that go into every transaction with your children. You’ll likely find that they’ll have plenty of questions of their own.

Teach Shopping Habits.

Make your kids into smart shoppers by showing them the ways that you compare goods when shopping. Note to them the size and price, and experiment with different brands to spark a discussion about whether or not paying extra for a certain brand is worth it.

Work On Saving Goals.

Saving is one of the basic tenets of financial management, but to what end? Work with your children and encourage them to set saving goals, even if they’re relatively minor. Is there a new game that they want? Talk to them about the price and how long it will take to save up for it. If they get a regular allowance, help put in perspective how far their money goes. Start a savings account for your child, and teach them the value of setting funds aside for the future. Talk to them about setting aside things like birthday and holiday money in this account.

Set a Budget.

This one is more geared at older kids coming up on their teens, but breaking down monthly expenses and comparing them to income is a valuable lesson. As a child, it can be easy to forget about the transactions that keep an individual afloat, from rent to food to car payments. Create a somewhat simplified budget with them, giving them a better sense of how you allocate your finances each month, and give them the chance to plan one of their own.

Invest Wisely.

Once you’ve covered a lot of the basics, talk of stocks and investment can help kids understand the value inherent in businesses. Make it a family activity; have every individual track a stock and discuss the highs and lows that it goes through over the course of several weeks.

Teach Giving.

With all of the pressure to accumulate enough cash to balance a budget, it is still important to teach your children that, at the end of the day, there is still always someone less fortunate that is worth giving back to. Encourage them to research different charities, and perhaps even foster their own fundraising efforts for giving back to the cause of their choice.

After all, it’s not just about encouraging them to be better spenders, but encouraging them to be better people.

Tips and Tricks to make extra cash—Sarang Ahuja

Tips and Tricks to Make Extra Cash

Saving, despite its plentiful benefits, can sometimes only do so much. In every individual’s life, there is a point when they decide that it’s about time that they made more money. Maybe it was the first time they mowed neighborhood lawns, or took a paper route, or even fought for a raise. There’s a lesson to be learned here: there are always opportunities to make more money with a little creativity and determination. I already talked about the gig economy and some of the best side job options available, so if you’d like information on that, read this article.

However, there are other ways to provide yourself with an alternative income stream or even gain the skills necessary to secure a raise. I’d like to discuss some of them now.

Get a certificate.

You’d be surprised at the number of skills that have some kind of certification associated with them, that can be earned without too much of a time commitment online. In some cases, you may be able to just take an exam to prove your competency and shore up your resume.

There’s a certain level of research associated with doing this. For instance, you’ll want to make sure that you’re earning your certification from a credible website. Some can actually cost quite a bit of money, so you’ll have to weigh the cost with the impact that it’ll make. Still, if you earn enough money as a result, you can make your investment back and reach your career goals in the process.

Grow Your Portfolio.

The best kind of income is the kind you don’t have to put too much time into. Building a stock portfolio is a great way to generate passive income over time. The best investment portfolios are focused on long-term growth, and with a little research and monitoring, you can build a supplemental source of income. Lending firms are also an option if you’re particularly short on time, and are a good way to dip a toe into the waters of investment.

Gain a Following.

Starting a blog is an unlikely way to generate income! The first step is positioning yourself as an expert on a particular niche (like finance!). It can be tough to generate a regular readership, but you’ll never need a stringent schedule or anything outside of a computer and internet connection.

Once you’ve started providing something of value, you can expand to other, smaller services and find a way to offer more to your audience. This is a flexible approach, allowing you to commit as much or as little as you want.

Learn Niche Skills.

Every industry has its quirks, and in yours, it always pays to learn the little things. Consider the niches in your field, and consider becoming an expert in one of them, a font of knowledge that others around you can depend on.

Certifications can come in handy here; it’s never too late to learn, and you’re not starting from scratch. Even in a workplace, taking on extra responsibility in a specific area that is needed can lead to further raises and opportunities.

Financial Recovery (1)

Financial Recovery—Acknowledging Your Money Missteps

When it comes to personal finance, it can be easy to continue spending on something that offers you little to no value with a disproportionate level of attachment due to resources you’ve already expended. This is known as the sunk cost fallacy and can cause individuals to act against their best interests and spend more than necessary. When this happens, the best course of action is to ignore the amount already spent and move along, even if this is difficult. Similarly, if you’re caught up in another bad financial habit, the solution is always to acknowledge the issues with your behavior and adjust accordingly. With that in mind, here are a few financial mistakes that are easy to make, but also easy to recognize and fix.

Not planning for a major life change

When something major occurs in your life, you should attempt to anticipate and deal with it as soon as possible. Changing jobs and careers is perhaps the most jarring financial change to make, but the expenses and time associated with major events such as weddings and the birth of a new child can tax you more than you’d expect.

Take advantage of the time you have before the event occurs. When it comes jobs, don’t quit until you’re absolutely certain you’ll be able to support yourself between jobs. Setting up a new job is half the battle, but the other half can often involve pursuing other sources of income that can support you in the interim.

Not tracking online payments

When it comes to online payments, never assume that payments are being made automatically. Even with autopay on, make a list of websites that will be charging you and find time to check them after every payment is made. It can help save you from unexpected late fees and save you the hassle of having to call companies to talk about your payment.

And, as previously stated, never hesitate to let go of a recurring payment if you feel you are no longer gaining value from it.

Not having a budget

Building a budget may seem like a daunting prospect, but there are tried and true rules that can help you easily plan out where your money goes every month. One of the most prominent is the 50/20/30 rule, which states that you should allocate 50% of your monthly funds to necessities, 20% to retirement, savings, and debt payment, and 30% for lifestyle expenses, which involve everything else. You’ll need a way to track this budget, and some online services make it easy, but much of this can be done by writing down relevant information.

Not building additional sources of revenue

Sometimes, time limitations make this difficult, but securing or setting up alternate streams of income can give you more breathing room month to month. This can involve taking on freelance projects, securing a part time job, or even selling old items that you no longer need. Be flexible, and ensure that you have the time to properly dedicate to side projects.

Not having long term goals

Things like retirement can seem like ages away, but knowing the eventual outcomes you are trying to achieve go a long way toward your planning tactics. For that matter, it’s not enough to simply have a goal; you need to know the steps that you want to take to reach that goal, and do the proper research and preparation to ensure that you’ll be able to act on it when the time comes. This can involve managing your debt, creating an emergency fund, and putting serious thought into where you allocate your savings.

A Little Something on the Side

A Little Something on the Side: Getting Started with a Side Job

The dynamic of labor in the United States has changed over the past decade. The long-held institution of the 9-5 job is crumbling in the face of a difficult job market and the increasing interconnectedness of technology. Because of this, individuals are opting to take on smaller part time jobs, sometimes to supplement an existing source of income, and sometimes because of difficulty in securing full time employment. Either way, working a side job can be a valuable asset and resume booster, providing the individual with an alternate cash flow that may not be as consistent or time consuming as a 9-5.

So, if you’re an individual that needs some extra cash, regardless of your reasons for doing so, there are a multitude of avenues you can take. I’d like to discuss some of the options available on the part-time job market.

Driving

Uber and Lyft have effectively disrupted the public transportation industry with crowdsourced drivers and a easy-to-use apps. Known in the industry as rideshare apps, an increasing number of people are becoming Uber and Lyft drivers to earn money on nights and weekends. Though becoming a rideshare driver is not as intensive as becoming a certified taxi driver, there are certain barriers to entry that applicants need to abide by.

Drivers need to submit to a background check in addition to possessing a valid driver’s license, a smartphone, and a car with four exterior doors and five seatbelts. Additionally, some cities may not allow rideshare services to operate, so be sure to know if your area can participate! Still, on a busy weekend night, rideshare drivers can accumulate quite the haul.

Babysitting

Despite being one of the stereotypical jobs for teenagers, a good caregiver can alleviate pressure from parents and make a positive impact on a child’s life. Previously relegated to word of mouth, technology has also made it easier to find babysitting and care gigs. Care.com is one example of a website looking to match babysitters with families in need, and payment is easy to receive through the site.

Depending on when you’re available, you can expect to make anywhere from $12 to $25 an hour babysitting. The high end of the scale is generally seen among night sitters, who assist tired parents with children, particularly babies and newborns.

Writing

Writing freelance blogs and articles has a huge market on the Internet. There are plenty out there if you go looking—but be warned, the pay can often be low. Research is important when writing online; you’ll want to know the regulations of the sites that you’re pitching to, as well as having a solid understanding of the topics that you’re writing about.

Still, nothing beats the flexibility of writing for an online outlet and working wherever you’d like! Find a site that fits your schedule, interests, and needs and have a great time producing quality content.

Design

While it requires a bit of a background to do well, with a bit of artistic know-how, you can create beautiful graphics or design for the web. For doing this, it helps to have a collection of your previous work somewhere on the web; bonus points if you can make your own online portfolio from scratch.

Upwork is an online resource for the errant designer, offering potential leads and jobs to community members. Plus, if you start to gain momentum, the amount of money you can make will increase over time.

Spring Cleaning Your Wallet

wallet

 

Now that tax season is here and the hustle and bustle from the holidays has finally settled down, it’s time to get cleaning, your wallet that is. Now is the perfect time to come up with new financial goals while planning out your financial expenditures for the rest of the year. Tax season is a great motivator to getting your finances on track and looking forward to springtime. Here are the some ways to clean up your financial wallet this season!

 

Pay down your debt

With tax season finally here, now is the best time to pay off as much of your debt as possible. Why? Because your tax return will give you the highest cash value that you own. Now, remember to do this the smart way. If you only got $500 back in taxes, but have $2000 in credit card debt, it may be a better idea to split those payments up to help contribute to a higher monthly payment. But if your tax return is say $3000, then you have enough to pay off your debt and treat yourself! It’s also a good idea to split up your monthly payments to an even amount until you can pay it off in full. This will show creditors that you are able to pay your monthly bills at a consistent rate.

 

Plan out vacations or trips

Now is the best time to plan out any family vacations or yearly trips. For one, you have more time to do so now as it’s still snowing and cold outside. Once spring time hits you’ll want to spend as much time outside as possible, without the worry of planning your yearly travel plans. Now is also a good time to plan things out because again, tax season is here so you may have a little extra boost in cash to contribute to your vacation funds.

 

Consider your credit cards

With spring time comes new promotions and rate options available from different financial lenders. For example, there may be a discount on personal or student loans. Many companies also offer great credit card offers with 0% interest or low fees on balance transfers. This is the time to sit down and take a look at your debt to see if there’s anyway you can cut down your monthly payments. Making a phone call to your lender provider can actually be the trick to lowering your rates. You may also consider opening a new credit card or transfer your balances for a lower rate. Whatever you decide to go with, make sure you do your research and talk to a provider before making any important decisions on your finances.

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Tax Season Tips

With tax season here, hopefully you’re not sporadically running around looking for your tax returns, receipts, and other important documents. Hopefully, you have also decided how you will be filing your taxes this year. But if not, have no fear! You still have two months left to file your taxes and most people haven’t even started yet. By following these tips you’ll be able to get organized and ready to file your state, local and federal taxes, but also take these tips to help you become organized for the rest of this year so that you have a smooth tax season next year.

Receipts

One of the most important things to do during tax season, (which sadly most people forget to do) is to save and organize your receipts. The reason for this is because if and when you get audited you have to have proof that you made that purchase (since you are filing it for a return). Many people questions if they should really be saving all of their receipts, however saving all of your receipts will give you an accurate estimate on how much money you spend on categories such as food, entertainment, shopping, etc. Saving your receipts will also allow you to become more organized and when tax season comes around, you’ll know exactly what you can and cannot claim.

Documents

As you already know, you’ll need some important documents to file your taxes. It is your employer’s responsibility to send out your w-2 or 1099 form. (If you are self employed, you should have a 1040 or 1099 form). It’s important not to lose these forms, however, some payroll and employer services have these forms on file. You will also need identification and your social security number. Along with these, you will need to bring along any documents or forms that were received from any stocks, investments or bank accounts that you will receive. Be sure to stay organized and keep everything together.

DIY or HIRE?

Another step you’ll need to consider is how do you want to file your taxes. It may be easier to hire someone, but it could also be costly. If you make over $200,000 a year, it is recommended that you hire an accountant to do your taxes for you as they will ensure that the least amount of mistakes are made. If you didn’t make much money, are not a homeowner or a business owner, and can’t claim anyone but yourself, filing your taxes via DIY may be the way to go. For one, you will usually find out how much your return will be right away. You can also do these at home with the click of a button so it saves you time and money. However, you do take the risk of making a mistake. Again, it’s always best if you can have professional advice to help you decide which way is best for you to file.

 

Top 5 Finance Books To Read Before You Turn 30

reading book

Becoming financially successful typically cannot be done overnight. It takes a lot of time, practice and decision making to reach the ultimate peak. However, you don’t have to wait until your retirement to live financially free. One of the best things an individual can do to practice financial success is to read. Although it doesn’t sound like much, reading can help expand the mind of individuals and fill your brain with the confidence and power for strong decision making, problem solving, and analytical thinking. Here are 5 books you should read before turning 30, to get on the road to a financially free life.

 

Thinking Fast and Slow by Daniel Kahneman

As previously mentioned, decision making is a very important aspect of finance. Kahneman talks in detail about the two different types of thinking that drag our minds into making decisions, allowing us to understand the reasons behind why and how we make important, life decisions. This book will allow open your mind up in the way that we think and allow you to make choices in a way you never have before.

 

Debt-Free By 30 by Jason Anthony and Karl Kluck

As many people are burdened with debt, they also tend to think that there is no way out. However, Debt-Free by 30 offers resources, tools, and advice by two young men who have reached their peak debt point. The authors were living for and under control of their debt, when they decided it was time to get their lives back. Anyone who’s ever felt like they will never get their life back should consider reading this book and becoming prepared for the challenges that life can take us by. There is a way out.

 

The Money Book for the Young, Fabulous & Broke by Suze Orman

As many young people graduate high school and college and look for the next step in their lives, it is no surprise that millennials don’t know where to begin their financial journey. This book is a step by step guide in understanding your finances straight out of school. It even includes financial vocabulary to help reader gain a thorough understanding of finances in life. Schools typically don’t teach finances in today’s world, so whether you’re looking to buy a house, get out of debt, or come up with a financial plan, this book is a must read.

The Millionaire Next Door by, Thomas J. Stanley and William D. Danko

Many people believe in order to become a millionaire, one must be born into money. However, this book will help you understand why this concept is a myth and what it really takes to become a millionaire. Through hard work, dedication, and financial planning, you can be on your road to financial success.

 

The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money by Carl Richards

We live in a society where buying things for satisfaction controls our financial decisions and spending habits. Richards explains in detail the theory of “the behavior gap” for consumers to understand their reality and have the ability to change their train of financial thought.

Personal Finance for Children

Kids and MoneyIt has long been discussed at what age people should start learning how to manage personal finance. It was only recently that some high schools began to require personal finance courses for graduation. Also, of course, there is the ever-popular list circulating the internet stating ‘Things I Never Learned in High School,’ most of which is related to personal finance. High schoolers, college students, and recent graduates are almost demanding that some personal finance that will be pertinent to the future is taught in school, yet the question of how early to start teaching it still remains. A new report suggests that the ideal time to start teaching personal finance may be earlier than anyone has thought before.

This Building Blocks Report, by the Consumer Financial Protection Board, makes the assertion that personal finance should start being taught at age 3. That’s right; preschoolers should be encouraged to practice make-believe play in order to develop their executive functioning. Executive functioning is, in part, learning control and how to plan, which is very helpful in budgeting. It gives people the willpower to maintain control over their actions, so, the sooner it is developed the better. Some make-believe activities that may help children to develop this section of mental processes are setting up a pretend supermarket in your home, playing accountant, and giving children calculators.

Of course, preschoolers will not be able to understand more complicated personal finance lessons, but they will understand basic concepts. Some things that should be impressed upon them include exchanging money for goods and saving money to get something better later. Remember that this is only the first phase of personal finance lessons.

Once children reach their pre-teenager stage, allowance can be used to further teach about personal finance. For example, requiring those receiving the allowance to save a portion of it each time it is given will teach how beneficial saving can be. It can also instill in them the sense that impulse buys, while fun at the time, are not always the best choice. When kids reach their teenage years, purchasing decisions can really start being discussed. At this age, it is recommended to discuss spending habits in all family activities, from filling up on gas to eating at a restaurant. Teenagers should be helping the family make spending decisions, which will ultimately prepare them for making spending decisions with their own finances in the future.

While it is great that some high schools are making personal finance courses standard, it is clear from the above report that personal finance learning should begin even soon. For more information, check out this Forbes article.

Watch out for the Five Factors that are impacting your Savings

Savings-Picture

When it comes to your finances, it is imperative that you be more strategic with your spending. The truth of the matter is that financial freedom doesn’t come easy. Just because you have large expenses does not mean you cannot save a good portion of your salary for your future. By learning your own particular spending habits, you will be able to accumulate the necessary wealth for a long and fruitful future.

If you are looking for improving your personal financial health, start off by evaluating your own spending habits. Evaluating your expenses with an open minded view will help clarify what is holding you back from financial success. Below, I have highlighted five particular spending habits that we have all encountered over time. If you are looking to buy a house or plan a trip to Madrid, it is vital that you start controlling your spending today.

The Real Cost of Happy Hours

Social happy hours may seem harmless. But in the grand scheme of things, these particular outings do add up. To help you take control of your financial spending, make sure you are aware of the overall cost this habit can have on a monthly basis. Outings such as lunch with coworkers or happy hours with friends can be incredibly expensive. To help prevent this, try and limit yourself from going out throughout the week. On average, people spend about $20 dollars a day on these particular social events. That comes out to $400 dollars a month, money that could be used to pay off your bills or to add into your retirement account. Once you understand the extreme ramifications of your spending, you will be more than likely to save for your future.

Stop Dining Out!

Similar to happy hour, dining out and expensive hobbies can take a toll on your savings. Let’s start off with dining out. I mean, do not get me wrong, who doesn’t love going out to dinner with your significant other and your friends. The only problem is that those nights are incredibly costly. Usually, restaurants will charge on average three times their food cost on what you are actually served. One option that can help resist the urge is by staying in and cooking instead. If you can cut back on dining out, this can absolutely impact the amount of money you can save yourself each and every month

The Membership Fees

Unlike college, group activities are separate expenses in your life. Take for example signing up for a membership at a wine of the month club or a private resort club. These dues and subscriptions can eat away at your hard earned cash. Even cheap subscriptions such as gym memberships can play a factor of what you could potentially be saving in the future. Now the problem with these memberships is that most are automatically debited from your bank account, so withdrawals can happen without you noticing. If it seems like these are just passive activities, try and decide if they are worth staying on. For most cases, it is better for you to just cancel that membership and utilize that extra money for something you actually enjoy.

Resist those Impulse Buys

Making expensive purchases on a whim can quickly diminish your savings. We have all been in that situation where we see something that catches our eyes and immediately have the impulse to buy. While satisfying as it may be, you must resist that temptation. To prevent this from happening, go into your stores with an overall inventory list of what you actually need. This will prevent you from loading your cart with unwanted buys.

Pay in Full

When it comes to credit card debt, it is important that you pay in full. Yes, there will be times where you cannot pay the full amount. But making only minimum payments on your credit card will be a disservice to you and your financial future. By paying the minimum amount, you are adding years to your payoff date. In addition, the interest compound increases making it almost impossible to get out of debt if this continues. Make sure you allocate your funds in paying off your debt. Yes, this will require a big sacrifice, especially for those social activities. But, it is also absolutely necessary to get you on track in building a healthier financial future.

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