The Finatical
Week of June 14th, 2021 - Budgeting Tips, High Housing Prices, Possible Evictions
FinaticTips - 3 Personal Finance Tips
1 - Establish a Budget
Budgeting helps keep spending in check, so that you don’t overspend your money and fall short on things that you need. Here the steps to get you started:
Step 1: Note your net income - Remember, this isn’t how much you see on your paycheck, but rather your income AFTER taxes
Step 2: Track your spending - Make sure to note all your expenses, no matter how little or big
Step 3: Set goals and make a plan - The whole point of a budget is to help you achieve your financial goals so set goals that are achievable and make a plan about how to reach them
Step 4: Adjust your habits - If you are easily meeting your goals, make it a bit harder so that you can save even more money or if it is too hard, try to cut down your expenses and change your lifestyle so that you can meet the expectations
Budgeting can be hard, here are some apps to help you out as you budget:
-Mint: Personal Finance & Money
-EveryDollar: Budget Your Money
-Truebill Budget & Bill Tracker
-Goodbudget Budget Planner
-You Need a Budget Online Software
It is imperative to create a simple budget, even if that means using a spreadsheet. JUST DO IT! A budget gives you a big picture of how you are spending, what income you bring in, etc. Visualizing and seeing these numbers can help you catch issues or make your eyes pop from some rough-looking numbers.
2 - Start Building an Emergency Fund
Have you ever imagined what you would do if you suddenly got in a car accident or if you learned you were suffering from a chronic disease? These are very drastic examples with minimal likelihoods but serve to tell you that if they do happen, you need to have a backup plan. It is very important to allot some of your income to emergency funds so that when a crisis does arise, you won’t have to cook meth like Walter White on Breaking Bad. Before you plan your budget for the week or a whole month, keep a separate account for your emergency fund. Most financial advisors recommend creating a fund that can cover at least 3 to 6 months worth of your living expenses. This might seem like a very daunting task at first but keep in mind to start small and think big. Even if you save $100 every week, you will have over $5000 in your fund at the end of the first year. Such a fund is imperative to prepare for possible financial emergencies such as immediate medical treatment, car breakdown or weather damage to your house.
3 - Avoid Overspending
Budgeting is all about creating a plan about how you are going to spend your money over a period of time. Once you create the plan, the next step is to identify ways to cut spending but more importantly cut overspending. Here are some tips:
Avoid saving credit cards online: Trying to keep your credit cards out of mind and out of sight will not work if you have your details saved on your phone. Erase those details and you will be able to limit your spending more efficiently.
Maintain a shopping list and stick to it: This can be a hard option for some but it has worked with flying colours in most cases. Show your list to other people in your household and maybe you will refrain from overspending then.
Stick to cash and avoid plastic money: Budget the amount of cash that you think you will need and only keep that amount of cash with you. Keep your credit and debit cards locked away!
Do not shop alone: It has been observed that we tend to overspend usually when we are shopping alone. So, Always have someone with you while you shop. Having a shopping companion can help you stick to your budget more efficiently.
Observe your spending triggers and try to curb them: Spending triggers are different for everyone and only you can find yours. For some, it is a time of the day or a particular mood or setting. Once you have identified your trigger, figure out ways to suppress it.
FinaticTrends - 2 Financial Trends
1 - Boom in Housing Prices
There has been a surge in housing prices in the US attributable to the economy improving. Low mortgage rates have invited a boom in residential housing. As people are working from home, they feel the need to purchase their own house more than ever. Due to the tight supply and the ever-increasing demand for houses, prices are going through the roof. The prices and demand for houses has reached a record-breaking high since last June when demand was mostly stagnant. This might also be due to the improving Covid situation. As vaccinations bring the world to normalcy, people, especially millennials, find it okay to have their own houses in new localities. It will be interesting to see how long this trend lasts as houses are already falling short of demand and a major shortage of affordable real estate is likely to occur.
2 - Possible Evictions in the Future
Due to the pandemic, millions in America and across the world faced unemployment. Because of this, more than 10 million Americans, or 14% of U.S. renters, are still behind on their housing payments, according to a recent analysis by The Center on Budget and Policy Priorities. The world is recovering from its pandemic depths but much of the population is still unable to make its rental payments. Moreover, many could be pushed from their homes when the national eviction ban expires in June as states still struggle to distribute the 45 billion dollars in rental assistance provided by Congress. This crisis is likely to affect everyone with different magnitudes. Households with children are more likely to face evictions as parenthood forces people to live in bigger and more luxurious living spaces and thus parents are less likely to pay their rents soon. The crisis also disproportionately affects Black households as Black renters are nearly four times as likely to be behind on their rent than their white counterparts.
Financial Guidance
“Financial freedom is freedom from fear.” - Robert Kiyosaki
Fear can consume us and keep us stagnant. Financial freedom helps alleviate those fears so we can pursue action.
Money Fact
The world’s richest 1% have more than TWICE as much wealth as 6.9 billion people. Saying this is wealth inequality is an understatement.
Amazing!