Sarang Ahuja | Finance

Leader, Financial Expert, Game Changer

Tag: savings (Page 2 of 2)

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.

Preparing the Future Starts with Financial Literacy

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Personal finance literacy is more than just being able to balance a checkbook and compare prices. It also includes skills like long-term vision and strategic planning for a person’s financial future. In the United States, we make a great effort to teach our children how to read and write. But the necessary disciplines of financial literacy seem to have been overlooked day-in and day-out for our future leaders of tomorrow. While as much as we can tailor our focuses to the fundamentals of learning, we as a society need to begin putting precedence on the importance of personal financial literacy. For our children, the concepts of financial literacy and money management are skills our kids can cultivate and leverage throughout their lives. The more we veer away and over look the importance of this concept, the greater the gap our children will have preparing for a better future.

Before we continue on the importance of financial literacy, let’s start by first comprehending the entire concept holistically. Financial literacy is, by definition, the ability to use knowledge and skills to make strong, effective, and informed decisions on money and money management. This covers this from simple concepts such as knowing the difference between earning, spending, and saving to creating and maintaining a bank account. In education today, the system focuses much of its attention on the foundational skills of reading, writing, and mathematics. While I do not disagree that these three are the core skills to a successful academic and professional career, we as a society need to alter our system to better prepare our children for a stronger and fruitful future. To this end, I believe that it is vital that we incorporate financial literacy classes for our children. These classes can help transform our children into strong analytical thinkers and decision makers.

So if financial literacy can help shape our children’s lives, why haven’t parents taken the initiative to teach their kids about money management?

This has been a dark and looming question many parents are forced to ask themselves. While they themselves understand the importance of financial literacy, the topic as an overall open discussion is not that easy. In a way, many adults are intimidated, or worse embarrassed, by their own current financial status to have this open talk with their children. While talking about money may not be the most comfortable discuss with your children, acknowledging its importance can do wonders for your kids. First and foremost, as adults, you have the necessary years and experience of how to make strong, valid, and sound financial decisions. Regardless of your current financial status, your knowledge and understanding of savings and money management can be the perfect way of guiding your child for a better future. Leverage your experiences, and especially your mistakes, to teach your kids what to do with their money. That brings us to our second reason of why you should share your financial knowledge with your kids. At the end of the day, no one is perfect. We have all been in a situation where we have been overzealous with our spending. The main things you can do is to learn from those mistakes. Similar to that situation, utilize those low points at teaching points for your kids. Helping them avoid those mistakes now than later can save them a great deal of trouble when they become adults. Remember, the first person who can impact the course of your child is you. Provide them with the higher-level practices of money management. Introduce and empower them to take control of their financial lives. Once they are able to do that, you’ll know you did your job.

Now, I know what many of you are thinking. What can I teach my five-year-old child about finances? How can an eleven year old have a grasp of investing?

In this day and age, the concept of business has grown dramatically through popular stories like Mark Zuckerberg’s rise to fame to infamous American reality television investment shows like Shark Tank. Because of it’s ever-growing status, helping your child learn the basic practices of money management can start their journey of earning, saving, and managing their funds. For many parents, this begins with a simple allowance. While providing them that concept of hard work ethics is great, make sure you instill the reasons of the amount they are getting and the options they can leverage in the future. In other words, provide your child with a simple standard of budgeting. One way to do this is to show them the 50-20-30 rule where 50% will come to expenses, 20% will go to savings, and 30% will go to leisure spending. To help aid with their overall understand of this process, try introducing them through your own example with a simple example or your actual personal finances at work. The key is for them to see and practice these skills at a young age. If they make any mistakes, let them make it! The more mistakes they make, the more opportunities they can learn for in the future.

Outside of money management, be sure to teach them the concepts of overspending and expenses. While it maybe e a hard concept for them to grasp, showing them the true realities of the world can help put things into better perspective. At the end of the day, our children are our future. If there is any way that we can alleviate any bourdons or misfortunes, now is our time to do so. Benjamin Franklin said it best where, “An investment I knowledge pays the best interest.”

TedTalks Finance: Alexa von Tobel on Personal Finance

Alexa von Tobel is the founder and CEO of LearnVest.com which she has been developing and growing since 2006. LearnVest is the leading personal finance and lifestyle website that brings financial literacy to women. Since launching LearnVest, Alexa has been widely quoted as a personal finance expert and entrepreneur in top tier business and consumer publications including: New York Times, The Wall Street Journal, New York Post, BusinessWeek, Shape, Fast Company, Marie Claire, Forbes Woman, InStyle, People Style Watch, Time Out New York, The Huffington Post, etc. Alexa has been included on Vanity Fair’s 2011 Next Establishment list, featured on Business Insider’s 2010 and 2011 Silicon Alley 100 lists, named “One of the Coolest Young Entrepreneurs” in Inc. Magazine’s 30 Under 30 feature, titled a “Woman to Watch” by Forbes and included on the publication’s 30 Under 30 list, highlighted on BusinessWeek’s annual list of “Best Young Tech Entrepreneurs,” among others. LearnVest has been named one of “25 Women-Run Startups to Watch” by Fast Company, included on Forbes’ list of the “Top 100 Websites for Women” for the second year in a row, featured on Business Insider’s Digital 100 list and included on Time Magazine’s annual list of “50 Best Websites.”

In this TedTalk presentation, Alexa discusses the staggering financial epidemic that is happening between young professionals. While many people can argue against the facts, the constant struggle and lack of foundational knowledge of personal finance has become one of the biggest hurdles in preventing millions of people in reaching the so-called American dream. In Alexa’s TedTalk, she elaborates on the problem with a real life example we see in our day-to-day lives. She follows this up with a five-step money solution and wraps up her presentation with the various financial benefits this can have for our future generation.

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