How should you manage your finances from your first paycheck?

Have you got your first job or looking for one? Congrats if you’ve got your first month’s salary. Are you planning how to spend it? Hold on! Before you start splurging, think for a moment! Your present financial behavior will decide your financial future.

Here are 6 tips for young adults to manage their personal finance for a better financial future.

1. Develop healthy financial habits

If you build healthy financial habits now, then it’ll stay with you lifelong. So, develop the habit of tracking your expenses by using a basic spreadsheet. It will help you analyze your spending habits and it’ll bring transparency to the budget you plan. Each and every month, as you update the spreadsheet, you get to know where you went wrong and what you need to do to improve your budget or make changes in your habits if required.

2. Try to save one-third of your income

I know, it seems tough to save one-third of your income, especially when you get married or have a child. However, if you’ve already saved a significant amount, it’ll be easier for you to tackle different phases of life. Saving a big amount may mean to you making some sacrifices of some indulgences in life, but think it’s a short term and it’ll take you towards your ultimate goal – which is financial security.

3. Learn self control while using credit cards

Most of you know this from your childhood that you need to practice self control to build a financially secured future. If you make a habit of purchasing through credit cards, then you’ll have a higher chance of incurring credit card debt, irrespective of whether or not you pay off your outstanding balance at every billing cycle.

4. Start saving money into an emergency fund

It doesn’t matter whether your starting salary is less or you have to repay your student loans, you should also start contributing towards building your emergency fund. Even if it’s a small amount, build an emergency fund and contribute a percent of your income into that account. It will help you keep yourself out of trouble during financial emergencies and you’ll also have a better sleep at night.

5. Repay your student loans early

You should repay your high interest student loans early. It might not be possible to pay chunks towards paying off your student loans when you start your career. However, you should continue with slow and steady monthly payments. And once you have saved a considerable amount in your savings account, pay off bigger chunks towards paying off your student loans.

6. Think and plan your goals

Saving becomes easier when you have goals to achieve. So, before you start saving, make a list of your goals, such as, buying a car, buying a house, etc. After you list your goals, give realistic dates to achieve the goals. To do so, consider your age, income, your debts and other financial obligations, tax rate, etc. By doing so, you can figure out your current financial situation and can plan to achieve your goals accordingly.

If required, you can take help of a financial adviser to figure out how you need to invest in order to achieve your goals within your set time period. If you follow these tips right from young age, you’ll be able to build a secure financial future and a stress free life.

Categories: Finance

Are you sure you aren’t making these home remodelling mistakes?

When you are staying at a house, you need to make some remodeling from time to time. However, I have often noticed that many people make certain mistakes which cost them money. It will be a lie if I say that I haven’t committed any such mistakes ever. I’m sure all of us have committed one of these mistakes at least once. Now, with some experience, I’ve learnt how to avoid them. Here are some of these mistakes which you should be aware of so that you don’t commit them while renovating your house.

Lowballing the planned budget

I feel this is one of the most common problems. You never know when you’ll be welcomed by a nice surprise and your budget will go for a toss! For example, suppose you’re installing a backsplash. While doing it, you might damage the wall and have to replace the drywall. While fixing that you might notice some electrical issues which need to be fixed. Therefore, whenever you’re starting any renovation work, make sure you include at least extra 15% of the total project cost into your present budget, for any unexpected expenses. And, if you’re lucky, you can use the extra dollars as savings for that month.

Thinking about giving your kitchen a trendy look

Before giving your kitchen a trendy look, just think once – Do you have enough space? The more you give your kitchen a bolder look, the faster it’ll go out of style, which might lower the resale value of your home. Therefore, don’t spend much on overdoing your kitchen. Keep it more universal and durable.

You’re spending a lot on hardwood floors

Undoubtedly, a hardwood floor looks great. However, before installing it, think once – Is it feasible for you? Wondering why? If you have pets, their nails might damage the hardwood floor. Moreover, kids can also damage the floor unknowingly. So, alternatively, you can install a single-board laminate, which has a similar look and is much more durable.

Not ordering extra flooring tiles

In relation to flooring, another mistake is often made by people. To save money, you may order the exact number of tiles or other flooring materials which you need. But, flooring is usually prone to breakage during installation, which may make it difficult for you to buy more which will match with the rest of the material. Most of the retailers accept return of unopened boxes for a refund. So, always order a little extra.

Not employing a designer in a major project

If you do not have enough confidence on your aesthetic sense and knowledge, then it’s always better to employ a designer. A designer, has a more artistic eye and has knowledge of unusual materials, who can create a unique look.

Choosing a contractor who offers the cheapest quote

Often the contractors give cheap quotes in order to get a job. Therefore, always insist on having a detailed written estimate with an explanation of how the design changes will be handled and the warranty of the work done. You can check out reviews of a contractor before giving the contract.

Start working on a project without a proper working plan

Your work doesn’t complete just by allotting a work to a contractor. The agreement with your contractor should have a thorough description of the scope of the work, the materials used along with cleanup and debris removal. It should also include the total price and the payment schedule along with other necessary details like, which work will be done first and the sequence of work one after another. Make sure you update when there’s any change in the plan.

Therefore, it’s not enough to plan a budget and start your renovation work. Take these things into consideration so that you can complete your renovation project successfully within your budget.

Beware! Do not splurge on useless things. After all, it’s your hard-earned money.

Categories: Miscellaneous

Is it necessary to spend a fortune to decorate your house?

Is it necessary to spend a fortune to decorate your house? The answer is ‘No’. If you’ve bought a new home but don’t have enough money to decorate it your way? Don’t worry. You can decorate your house within your limited budget. Only you have to know the right tricks and tips to do so.

In this blog post, I thought giving some ideas to decorate your home as per your liking and without spending much. I love to do it my way.

Make your front door attractive

The first thing one notices is the main exterior door. So, at first, paint the front door. It is better to paint it with a bright color so that it catches attention. It will change the look of an old house into a new one in no time.

Use wallpapers in some areas

If you love wallpapers but can’t or don’t want to put it into your entire room, you can use it as back of your bookshelves. It’s simple. Just put wallpaper on the wall where you’ll put your bookcase. It will create a pop of pattern without spending a lot of money.

Fake a headboard in your bedroom

Instead of buying a bed, you can simply buy a box and mattress and fake a headboard to give the look of a bed. Just put a block of wood or something of similar looking and paint it. It will create the look of a perfect headboard. You can check out these stuffs in lifestyle stores. You will get ideas!

Hang photos in your living room

Are you confused regarding how to decorate the wall of your living room? Open your photo albums and select your family photos of your previous vacations. Now, hang them in the wall. It is better if you frame them in different sizes. In no time, your family room with be filled with cheer and happiness. It will create the perfect ambiance to sit together and relive those moments once again.

Change your bathroom faucet

It might not be possible for you to change the look of your entire sink in your bathroom. Just replace your old faucet with a new one. It will give a new refreshing look to your bathroom.

Install a multi-glass mirror

Along with changing your bathroom faucet, change the mirror in your bathroom. You can buy a mirrored glass cut to fit in a vintage frame of your choice. It will make your bathroom look big and it’s not a very expensive thing to purchase.

Transform your imagination into reality

Do you want to give the look of your imagination into your new home? You must be having colorful plates of different shape and size. You can also paint them with your favorite color. Now, simply hang them in the wall of your kitchen or hang it in the wall inside some frame. Your kitchen decor will be unique and complete. It is not expensive; moreover, you can change them from time to time and create different look.

There is no alternative to decorate your house yourself. So, plan a DIY project every weekend and involve the entire family to do it. This way, your house will be transformed into your dream home and you’ll also have a memorable family time. Just let your imagination do the trick.

Happy decorating!

Categories: Miscellaneous

Debt settlement – Does it actually help you become debt free?

When you have a huge amount of debt to pay off in your multiple accounts, then you can opt for debt settlement. Debt settlement is a process of negotiating with your creditors so that they accept an amount less than what you owe on the accounts. Go through the article to know how you can become debt free by settling your debts.

In one of my previous posts, I had given a brief idea regarding various debt relief options. In this post, I am discussing about one of those options “Debt Settlement” in details.

Debt settlement program – How can it help you?

You can go for an obligation free credit counselling in a settlement company and a counselor will analyze whether or not it’s appropriate for you. After you enroll in a settlement program, a professional debt negotiator, on behalf of the settlement company, will analyze your financial situation and decide upon an amount which you need to pay to the settlement company every month. The amount gets deposited into a settlement account every month. In the meantime, the negotiator starts communicating with your creditors to reduce the payoff amount. Once a creditor agree to a specific amount, the settlement funds are used to pay off the negotiated amount. Thus, your debts are settled one by one.

Can you settle your unsecured debts on your own?

Yes, you can definitely settle your debts on your own without any professional help. However, to do so, you need to know the skills of negotiating with your creditors and collection agencies so that they agree to your proposal. Also, you should make a proposal which the creditors and CAs will agree.

What debts can you settle?

You can settle your high interest credit card debts. Along with it, you can settle store credit card debts, medical and hospital bills, past due utility bills, etc. However, you won’t be able to settle
your student loan debt, income tax payments and secured debt like, mortgage and car loans with the help of a settlement program.

What are the advantages of settling debts?

  • You can avoid filing a bankruptcy
  • Your debt amount can be reduced significantly
  • You can avoid lawsuit and other legal actions
  • You can get rid of your debts is significantly less time
  • You can avoid harassing calls from collection agencies
  • You can repay debts with the help of a single monthly payment

Is there any disadvantage of going for settlement?

Well, in spite of these advantages, there are some disadvantages you need to be aware of when you are opting to settle your debts. First of all, your credit score may get reduced to some extent and the accounts will get updated in your credit reports as “Paid as Settled”, unless you negotiate with your creditors to update the reports as “Paid in Full”. You will also have to pay tax on the forgiven debt amount as it’ll be regarded as your income and your creditors’ loss.

However, in spite of these disadvantages, you can become debt free relatively fast and can bring your financial life back in order. Then, after you’re successful in settling your debts, try to manage your finances better so that you can improve your credit report and score and can enjoy a better lifestyle.

Have questions? Ask me!

Categories: Finance