Sarang Ahuja | Finance

Leader, Financial Expert, Game Changer

Tag: money

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

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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.

 

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Achieving Financial Success This Year

As the New Year is finally here, many are taking on New Year’s resolutions. However, come a week after new years, followed by months of setting your goals aside, we end up in the same position as last year, with our goals being dusted away and forgotten The new year has always been known for starting a new chapter in our lives, therefore it’s a great time to write down a list of goals to commit to. Here are five ways to actually reach and commit to your financial goals.

Commit to the Envelope Method

Let’s go back to a time before online banking and smart technology. One of the most successful savings methods used was the envelope method. Today, this method can be applied on your smartphone or tablet, or the old fashioned way. The concept is to create different envelopes for your spending habits so that you don’t go over your spending budget. This is a successful method as you are able to see how much money you have (or don’t have) to spend. It works great with paper envelopes, or you can organize your bank account through various online envelopes.  Creating this habit will allow you to stay committed to your goals.

 

Cook for 30 days straight

You hear me right. January is a great time to save money. First of all, who wants to go out in the middle of winter? Secondly, what better time to detox all the sugary baked sweets and holiday treats from the holiday than January? Begin by establishing a meal plan for 30 days straight, then head to the grocery store, and buy only the items you’ll need for your meals/ snacks. If you typically eat out, this will detox your mind and body and allow you to save money and make healthy meal choices. After 30 days, you won’t have the urge to go out to eat every day, as you’ve spent time learning how to cook and see how much money you’ve saved.

 

Make coffee at home

Cooking at home for 30 days straight, includes making coffee at home. The average cup of coffee costs about $2.70. This means an average of $18.90 per week or $907.20 per year. That’s enough to buy you a weekend getaway. Investing in a nice coffee pot and large, quality coffee mug will still save you money throughout the year just buy discontinuing those coffee runs.

 

Focus on quantity, not quality

The idea here is that less is more.The higher quality clothing, household products or items you buy, the the longer it will last, and the less amount of money you’ll spend fixing these items or spending money on replacements. This is a good thing to keep in mind when buying clothing or furniture especially. Once you purchase high quality products, you won’t have the need to buy more until you absolutely need it, hence, saving you money.

 

The Worst Things to Spend Your Money On

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We live in a society where it is almost impossible to get by without spending money. We are so consumed in our work and spending power, that we don’t even notice why we make the spending decisions that we do. There are many things that we can’t get away from spending money on such as street parking, taxes, and health insurance. However, there are many things that you can avoid spending money on and avoid unnecessary purchases. Here are the worst things that consumers spend money on, and ways to save.

 

Buying Brand Names

One of the biggest things consumers tend to care greatly of is brand names. Many people have committed relationships with brand names and items, while others find that brand name and generic items don’t have much of a difference. Brand name items such as clothing, toiletries, and food can cost a lot more money compared to generic items, hence one of the ways people get away with spending half as much as others on groceries. The biggest difference in generic items and brand name items is simply the name of the company, where the ingredients tend to be the same. Buying generic can save you thousands of dollars when shopping. Try it out sometime and see if you can tell the difference!

 

Coffee & Water

You knew it was coming! Spending money on coffee can equal out to over $1000 a year! And don’t even get me started on water bottles, especially if you buy them individually. Consumers tend to spend thousands of dollars a year on the convenience of buying coffee and water. If you were looking to save money, investing in a coffee pot and water filter would be your way to go. If you still can’t give up your morning coffee ritual, at least bring your own coffee mug. Some cafes give you a discount for using your own cup, plus it’s better for the environment.

ATM FEES

One of the most inconvenient places to spend your money, right? Although it’s important to carry cash around, heading to the nearest ATM won’t help you save money. ATMs can charge consumers anywhere between $2-$5 for taking out cash, adding up to hundreds of dollars a year if you’re an advocate visitor. Instead, taking some extra time to visit your regular bank on a weekly or monthly basis may help you save money. You can also visit your bank’s ATMs where you won’t be charged.

 

Online shopping

In today’s society, time is spent in a completely different way. A big reason for this is the advancement of the internet, which allows us to save time on things such as shopping. However, this also means spending more money. For one, monthly uses of the internet can become costly, depending on your plan. Although online shopping may be much more convenient than running to the store and purchasing your items, the costs of shipping and handling can become expensive. There are only a few sites that offer free shipping, whereas others require a yearly subscription (amazon) or shipping fees for each item. Unless you live miles and miles away from a shopping mall, convenience store, or grocery store, you’ll save a lot more money that you can use towards shopping if you don’t do it online on a regular basis.

Basic Income in the United States

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Depending on who you ask, you’ll get some varied numbers as to how much the United States as a nation spends each year on welfare and other systems of poverty relief. Some sources claim is about $1 trillion, while others say the figure is significantly lower. Regardless of which side you’re inclined to agree with, the numbers are staggering.

Amidst the trials and tribulations that surround the economic situation the United States has found itself in recently, one question has begun to pick up momentum as of late.

What would happen if the United States adopted the system of basic income?

The short answer is that, well, no one knows for sure.

The long answer takes a little more explanation.

According to BasicIncome.org, the term is defined as “an income unconditionally granted to all on an individual basis, without means test or work requirement.” Boiled down, basic income (also called “unconditional basic income” or “universal basic income” is simply money paid to citizens each month simply for living. Basic income doesn’t differentiate between the rich and the poor, the employed and the unemployed or demographic data; it is simply a check made out in your name each month courtesy of Uncle Sam.

The idea seems completely nonsensical at first glance. Giving out free money to people won’t solve their problems. The pervasive idea that seems to follow welfare and unemployment-aid recipients is that they’re either lazy, addicted to drugs/alcohol or simply gaming the system. The idea goes that giving those people free money would feed their habits, not the mouths of their children. However, studies have shown that this isn’t necessarily true; people do in fact work and attempt to provide for themselves and their families, even when they are on financial benefit programs.

Often, this money comes from taxes on the public and is integrated into a country’s already existing social welfare systems (medicaid, food stamps, etc). This raises the ire of many opposers to the idea of a basic income, as the idea of paying directly into someone else’s pockets tends not to sit well with many people.

Small scale basic income rollouts have been largely successful. Minor pilot programs have been run in impoverished countries around the world, giving unconditional monetary aid to those who needed it the most in Brazil and Kenya. GiveDirectly, a charity started in 2009, provides directly cash deposits to people living in Uganda and Kenya.

No country yet provides a universal basic income to its citizens by any means, though Switzerland has recently tossed around the idea. Because of the large cost, nearly the entirety of the Swiss government has rejected the idea as too expensive and unrealistic.

With limited research and hard experimentation on the subject a basic income rollout in the United States seems entirely unlikely. The radical idea does, however, have the support of many European citizens, where the idea of basic income has been in the news for some time now.

It’s easy to see why the United States might not be the best country to launch a basic income pilot program. The large population and comparatively large unemployment rate don’t bode well for a basic income implementation any time in the near future.

Though the idea is radical and, more than likely entirely unrealistic, it’s worth keeping a close eye on countries like Switzerland as the idea is passed through the government.

The Millennial Complex of Personal Finance

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In today’s world, millennials are looked as the pioneers of their times. They are better educated than their predecessors, more ethnically diverse, and more economically active. But for many of these exceptional young professionals, they have a troubling grasp of reality and fantasy where ‘what their financial situations actually are’ completely differs to ‘where they want their lives to be.’ In the grand scheme of things, this type of mentality continues to cripple the financial savings of many of these millennial’s personal finance. In fact, with such economical uncertainties, such as under employment, underpay, student debt, this generation’s lack of concern with their financial future continues to higher their current financial health and economical aspirations and security each and everyday.

To examine this further, we of course have to evaluate their social, living, and career situations in order to have a full grasp of the problem that continues to plague young professionals. It is not a surprise that many college graduates want to live a more attractive cities such as San Francisco, New York City, Boston, or Miami. As desirable as these cities are, they, in themselves, are incredibly intangible for many millennials to live in. For many of these cities, the cost of living is astronomical. To just live comfortably, many young professionals will have to be making $65K or $70K annually. And with under employment still above 9 percent in 2015, as well as underpaid wages, this ‘lifestyle’ is clearly unrealistic.

And yet, many college graduates are still willing to risk their financial futures for the taste of the lifestyle. Even with student loans, high living expenses, and low wages, many millennials continue to believe that they are the outlier statistic that can beat the odds year after year. As optimistic as that sounds, we have to live in the world of facts. Today, good jobs are rare and the jobs that are out there are incredibly competitive to get. Even with a strong college degree from one of the best schools in the nation, you are still pinned up against another individual with a Master in Science or Masters in Business Administration with an even stronger work background.

Now these facts are not meant to be grim. Instead they are meant to shed a light on the world that we are living today. For example, with more poorly paid retail and hospitality jobs reporting employment for individuals with college degrees, there clearly needs to be a change in what millennials can and cannot do in these cities. In fact, beyond the wages and necessary debt, cities like New York City and San Francisco are clearly impractical for someone making $45K or lower to live in. Going beyond rent, each city has become more expensive. That is the reality. From food, happy hours, and other social activities, millennials and young professionals are continuously being blinded by what they should do (such as saving), than what they are actually doing (spending).

To help with this situation, make sure you have a strong grasp and understanding of your financial situation. Knowing your personal finances from your total net profit to even your future expenses can help salvage a strong economical future in just a few short months. While this may take some time, and potential sacrifice, it will be worth it in the end.

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