Sarang Ahuja | Finance

Leader, Financial Expert, Game Changer

Tag: money (Page 2 of 2)

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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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