With Thanksgiving break coming up, budgeting and planning your finances becomes vital. Here are some quick tips to help you make good financial decisions this festive season.
In order to avoid overspending this festive season, the best decision we can make is to plan ahead and make a budget. By doing this, we will have control of our finances. We have to:
- Decide and understand how much money we want to spend this break
- Make a list of all our expenses this season e.g fuel, entertainment
- Make sure we know where the money is coming from
- Make a realistic budget to efficiently track our spending
- Provide for miscellaneous expenses
The way we create our budget is up to us. But I want us to create this budget before the season starts and and make sure we revisit it to know we are on track.
During this season, we should try as much as possible to avoid impulse buying. I know its a festive season and it might be quite difficult, but we should try to develop that self control and avoid regrets.
MAKE SHOPPING LISTS!
There are lots of sales going in festive seasons. Take advantage of those as well as the deals and discounts on the various online platforms, shopping sites and even the offline shops (market).
Avoid Debt and Regrets
This season, we need to avoid debt as much as possible. I understand we all want to have as much fun as there is, but we should not borrow to do so.
We have to constantly remind ourselves that these seasons come and go, but debts are always hard to pay back. Manage what you have this period.
Make it enjoyable in your own little way and spend it with loved ones.
Maintain Your Savings
It is very easy to get caught up in a lot of spending this season. And its hard to maintain our savings option since there’s always the pressure to go all out with the spending.
I want us to maintain whatever saving option we’ve been into and also try to save during this period.
There is nothing like over saving when you have a target to reach.
Remember: Saving is worth it, it’s just that the end result feels so far away.
6 Money Saving Tips For Millennials
Millennials make up approximately 25% of the total population in the United States and they are now larger than the Baby Boomer generation.
This has welcomed a new trend—increased spending. The spending power of Millennials is estimated to reach a whopping $3.39 trillion by the end of 2018. A higher education level and more spending power haven’t yet translated into financial literacy.
As financial literacy is not taught in schools, most individuals grow up having no idea of investing and saving options. Most millennials will soon have to start making life decisions—whether it is to buy a home or start a family.
They need to find a way to overcome mounting student debt, skyrocketing rents, a saturated job market, and stagnant wages, while saving enough for retirement.
Sounds tough? Sure. But you need not worry. Here are six financial tips that will help millennials save a few bucks—all the while maintaining financial discipline.
Getting Plenty Of Financial Advice? 5 Money Rules You Can Ignore
Today’s millennials aren’t big fans of debt. Unlike the baby boomers, young adults today are straddling massive financial pressure – be it heavy student loans or home prices reaching unaffordable highs. While all of this welcomes plenty of financial advice, most of them are wrong. Here are five pieces of money rules you can afford to ignore.
1. Buy A House ASAP (And Not Rent)
With home prices almost doubling and trumping inflation and pay, buying a house could lead to a nightmare if you’re taking out a mortgage before your income allows you to afford one. A better option would be to rent until you have enough funding to put down 20%, while taking care to not make payments that are more than 30% of your total income.
2. Ditch Your Credit Card
While this might be popular financial advice from the older folks, getting a credit card that comes with a low annual fee can help you immensely – if used right. What’s more, it comes packed with perks like reward points, cashback, mileage for travel, and can help you meet a large unexpected cost.
3. Pay Down Debts With The Highest Rates
It might be tempting to tackle the biggest debt of the lot and let the smaller ones slip down your priority list. The trick here is to focus instead on paying off your smallest of debts with every dollar you can afford – once it’s paid off, roll over to paying off the next one, until you’re debt-free.
4. Start Saving For Your Retirement (Right Now)
Despite the upside to saving for your retirement now, millennials might often find money too tight. For folks who are just out of university, a wiser option would be to aggressively pay off your debts instead. Although, here’s a caveat – IF your employer offers a retirement contribution match, invest just enough to get that perk (It’s free money!).
5. Buy Yourself A Car
With the shared economy on overdrive, there are plenty of options ranging from car rentals to ride-hailing services. Pumping your money into buying your car could also demand more of your savings for repairs and maintenance – funds you can use to pay off other expenses with. The opportunity cost isn’t worth it if you haven’t got enough financial cushion to meet your important expenses.
Why You Need To Bag Muni Bonds For High-Yield Tax-Free Returns
With many investors taking to the stock market or making do with scraping a meagre 2% yield off their 10-year Treasury bills, most miss out on including a far better option to their investment portfolio – municipal bonds. What’s exciting about this asset class? They come packed with significant tax advantages, and yield returns that are over 6% to the investor. Here’s a short, somewhat helpful video on how municipal bonds work:
Muni bonds have been the safest bet when investing in bonds – their default rates at 0.2% for years are almost miniscule when compared to the volatility that the equity market flirts with. Earlier this year, a new federal tax law enabled improved tax deductions on federal returns. This drew many to bank on municipal bonds since it fit the tax-free bill. The interest income you receive on muni bonds is not subject to federal taxes, plus it is exempt from local taxes if it was issued within your state. The cascading gains you make can be dramatic.
The best way to tap into muni bonds are through a bond fund. Within a regular bond fund, you get to pick amongst mutual funds, closed-end funds and exchange-traded funds (ETFs). Beyond these classes, you would also have to consider factors such as your investment horizon and cash flow requirements. Here’s a post that explains the calculations that go into muni bonds and other considerations to look at when making the investment. Better yet are the projections – nearly $51 billion in reinvestment demand is expected this month, which would sweeten the deal for municipal bond holders.