Sarang Ahuja | Finance

Leader, Financial Expert, Game Changer

Tag: savings (Page 1 of 2)

What I Did During My Summer Vacation—Sarang Ahuja

What I Did Over My Summer Vacation (Wasn’t An Internship)

If you’re a college student, then a paid internship is the holy grail of a summer vacation—a way to make money while also advancing career prospects. It’s a rite of passage for many students, and it can be devastating to see others land their ideal internships while you’re stuck with nothing to do over the summer.

Worry no more; if you’re a college student looking to advance your career over the summer, there are plenty of other avenues available to you that are guaranteed not to require getting other people coffee.

Find Odd Jobs

I don’t just mean mowing lawns or walking dogs (though that is an option). Look for temporary work in your area geared toward your interests. Even if it’s for a nonprofit group, doing work for their benefit can give you something to boost your resume. It’s also a great way to learn how the working environment functions, something that can be hard to gauge through college classes. Take the time to research specialty jobs that may be relevant to you; for instance, if you’re a writer, local papers may need assistance covering stories.

It’s also worth considering day long shadowing opportunities to get another good look at the workplace environment in your industry.

Volunteer

Speaking of nonprofits, pursuing volunteering experiences can be valuable for a resume even if it isn’t necessarily in your area of expertise. Not only that, but there are often leadership opportunities available through nonprofits. Consider spearheading a project and giving yourself something to be proud of.

Complete Summer Classes

Ease the burden of your college career by taking summer classes! Even if your college is far away, consider looking into knocking out a few requirements online or at your local community college. If your schedule is a bit hectic, it can cut down on your stress and even save money in many cases. For that matter, you can even use your extra time to complete an internship later on.

Research

Many colleges and universities offer undergraduate research opportunities over summers. For an individual considering grad school, research is a big standout come application season. Even outside of this, research offers an in-depth look at the working of industries even beyond math and science. Consider asking about grants that your school offers to help support you in these endeavors.

Start a Business

The growth of technology has allowed for the spread of ideas at an unprecedented rate. If you see an opportunity in a field you’re studying, or even just have a solid grasp of a particular skill, consider becoming an entrepreneur. From writing to design to building websites, there are many skills that you can hawk to those interested, all while earning money and learning.

Study Abroad

Not every life experience has to relate to work. By studying abroad for a summer, you demonstrate to employers your willingness to venture outside of your comfort zone and try new experiences. Plus, it gives you more opportunities to learn and work toward that sweet, sweet college credit. Consider some of the places you’ve always wanted to see, and form experiences that you’ll have for the rest of your life!

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.

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.

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Post-College Financing

For those of you out there who have just finished another chapter of your life and graduated college, congratulations! You’re ready to take on life choices and decisions and you’ve officially entered adulthood. This means that you’re on the road to finding financial success and will most likely begin paying off your loans from the last four years. Although it can be a hard subject to think about, taking control of your finances post college life is attainable. By following these four steps, you can be on your way for financial success.

 

Calculate your Debt

As hard as it may be to think about how much money you don’t have, knowing how much you owe is crucial to come up with a plan to paying back your loans. Once you have established a number, write it down. This will allow you to keep track of your payback progress. When making monthly payments, it’s also a good idea to set up automatic payments. Automatic payments will ensure that your payments are always on time and establish a positive credit score and a good relationship with your bank.

 

Keep an Eye on your Credit Score

College is about learning from your mistakes, right? As soon as you get out of college ( or even before), you should keep an eye on your credit score. Whether you’ve applied for loans/ credit cards or not, monitoring your score will help protect you from fraud and identity theft. It’s also important to keep in mind that checking your credit report too often can actually hurt your score. If you’re planning on taking out a mortgage or big loan this year, keep the credit pulling to a minimum, such as 3 times a year. However, checking your monthly FICO score is a great idea to have an idea where your credit stands. FICO works by predicting what your actual score is. It’s usually offered with online credit card statements, therefore you can look at it as much as you’d like without worrying about your score going down.

 

Emergency Savings

Although setting up a 401k and retirement is important as a post college student, it’s more important to have an emergency savings account set up as soon as you can. If you come out of college with a job lined up, consider yourself lucky. Otherwise, you’ll need to set up a plan for living costs, such as moving back in with your parents or finding freelance work. When your income isn’t steady, an emergency living plan is more important than setting up a retirement plan. The reality is that you went to college to find a job, so eventually you will find one. But some unexpected costs may come up, such as car damages, shopping for interview clothes, or other emergencies could potentially come up, so you have to be ready.

 

Create a Budget

My best overall advice for college graduates, is to start thinking about your future monthly expenses before you graduate so that you’re not shocked when it comes to paying your bills post college. Then, create a budget to keep in mind. This will also help you in the long run when you make more money than you’re spending, allowing you to create savings plans.

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

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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.

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.

401k’s, Roth IRA, & the Ladder of Personal Finance

Ask-Ramit has provides a free ultimate guide to personal finance that can help cultivate the necessary foundation and knowledge in preparing your future each and everyday.

 

Financial Tips For Young Professionals

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The best way to prepare for one’s future is to start saving money early in life. Today’s millennials face several obstacles on their path to financial stability, including substantial college loans and an unsteady job market. In a recent study published on Forbes, it’s predicted that 30% of millennials would sell an organ to alleviate their debt for $30,000.

While many young people do not see financial planning as a feasible tool in their early careers, there are simple steps that making planning for the future manageable. Here are four tips that all millennials should consider implementing today.

1. Set Up A Savings Account (Or Two)

Whether you’re just starting out or are launching into your next career opportunity, the number one priority for achieving financial stability is creating an emergency fund. Savings accounts are critical to the health of your bank account and to all aspects of your life. They provide individuals with more flexibility, ease of mind, and most importantly, a nest egg of support for when life throws you a curveball. The easiest way to make this happen? Place a small amount of money from each paycheck directly into your bank account. In time, the fund will grow and offer a stronger net of support.

Once the safety fund is underway, millennials should consider opening up an IRA. This is a great way to prepare for long-term future.

2. Find Ways To Make Budgeting Fun

While creating a budget is not a novel idea; it will absolutely save you money each month. Tech-savvy millennials should capitalize on the inventive nature of online banking apps, like Mint. Mint make budgeting simple by linking the user’s bank account with their credit cards to provide a comprehensive outlook on their current financial state. The application also provides a wealth of tools to help users save money each month, like a free credit check and ways to achieve long-term savings goals. In addition, Mint users can set individual budgets for specific categories, like groceries or dining out. Once users exceed that budget, Mint will send them an alert. Online banking is a great way to stay on top of your money and budget more efficiently.

3. Invest In Yourself

Young millennials may feel under qualified to apply for jobs that offer a higher income, but by investing in themselves during their 20’s, they will be able to develop skills that will aid them in their future. Many local colleges or technical schools offer night or weekend classes or workshops. In addition, those looking to earn an additional income can look into secondary jobs. Bartending, babysitting, and freelancing are all excellent supplemental positions that offer flexibility and added income. These jobs may require long nights or weekend work, however, individuals will benefit from the added income and development of professional and creative skills.

4. Seek out Alternative Solutions

Finally, many young professionals crippled with student loans can often lessen their monthly payments or find alternative solutions to paying it off. Refinancing private loans may be a huge help in terms of monthly payments, and many startups are making the process easier and more attainable. Likewise, students with federal loans may also apply for restructuring their payments through the government. The internet offers a vast resource on ways to consolidate debt so young professionals can focus on saving and preparing for the future.

While saving and creating budgets may not be the most exciting activities for young professionals, these habits will offer benefits for years to come.

Personal Finance 101 – 5 Steps to Successful Budgeting

To put it simply, a personal financial budget allows you to itemize your entire finances holistically for any given period of time. This concept helps you determine whether you can grab that bite to eat or whether you should head home for that peanut butter and jelly sandwich. This type of planning and monitoring allows you to identify any wasteful expenditures that you can quickly adapt and alter so that you leverage and optimize your money for your future financial goals. This can only start when you actually break down your expenses. For many, they will be surprised by what they find. Those $5.00 coffees or $15.00 lunches can add up in an incredibly negative way. But recognize those flaws is the first step in optimizing your finances for the better.

In this quick simple video, you will find some helpful hints and tips of how to successfully budget for your future goals. this sense of financial clarity will not only alleviate the stress and anxiety of paying bills, but also track and highlight your financial health in comparison to your financial goals.

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