5 Tips for Millennials Working on Paying Off Debt – Tejesh Kodali

millennial-pay-debt-tejesh-kodali

If you’re like most people in the millennial generation, you likely have a hefty amount of debt that you need to pay off. Most likely, this debt is primarily from your student loans, and the number is looming over your head. You may also have a mortgage to pay or a car payment or you’re wondering how you’ll ever be able to afford those expenses. Luckily, there are some great tips that you can use to pay down your debt, regardless of the amount or where you are in your career. Follow this advice to get rid of that debt more quickly and move to a more stable financial situation.

Create a budget

The first step you’ll want to take is creating a solid budget to fight your debt. You may already have a budget, but periodically reevaluate it, especially when you get a raise or additional income. There are likely places you can cut some of your budget and put more money toward paying off your debt. Remember that the sooner you pay it off, the more you save on interest and the sooner you have that money available to put toward another goal.

Refinance

If you’re able to refinance your loans, do it. Chances are, you could be paying significantly less in interest, especially if you have a full-time, salaried job. Find a new bank or organization that offers you a lower interest rate and makes paying off debt easier. However, when you’re looking to refinance, make sure you go with a legitimate organization that won’t raise your rates and do something shady.

Take up odd jobs

While getting a second job can be a great way to earn more income to pay off debt, you do not have to work a second full-time job and run yourself ragged. Simply look for ways you can increase your income, such as housesitting, working as an Uber or Lyft driver, or some other type of work that you can do on your own schedule.

Tackle it strategically

Consider what debt has the highest interest rate and work to pay that off first. This tactic is known as the “debt snowballing method.” You’ll save money in the long-run and feel more motivated as you pay off each loan.

Throw extra money at it

Something too few people do with their debt is throw extra money at it. If you can afford more than the minimum payments, pay as much as you can. When you get extra money, whether around holidays, for a raise, or from a side hustle, using that extra income to pay off more of your debt is a great idea. You might prefer to use it for something fun, but the sooner you pay of your debt, the better you’ll feel.

Original Post

Advertisements

5 Reasons to Create a Stable Emergency Fund

create-emergency-fund-tejesh-kodali

We’ve all heard the financial commandment of creating an emergency fund. Most people talk about an emergency fund as though it’s the single key to achieving financial stability and making sure your finances are in order. By this point, you probably hear this advice, nod, but do not really understand how important a stable emergency fund is. While simply having an emergency fund doesn’t necessarily mean your finances are in order, it does indicate that you’re financially stable enough to set aside money for your emergency fund. A stable emergency fund shows that you’re prepared for unexpected situations and have put thought into your finances. Here are some of the reasons you should start working on building a stable emergency fund as soon as possible.

Job loss

The biggest reason people highlight the importance of an emergency fund is that it’ll help you in case of job loss. We can never predict how our companies will do or what the economy is going to be like in a few months. You might even make a mistake at work that could cost you your job. Having six months worth of living expenses saved up in your emergency fund makes this situation a lot less stressful.

Unexpected costs

People frequently talk about the usefulness of an emergency fund for when your car needs repairs or medical costs come up. You might need to get surgery or end up in the hospital due to some accident. Medical bills can quickly rack up, so an emergency fund can help cover those costs. Instead of going into debt for unexpected costs, an emergency fund can cover these payments.

Forgotten payments

No matter how organized or on top of your finances you are, there is a chance you’ll forget to make a payment. Whether it’s a credit card payment that then racks up interest or something else, having an emergency fund on hand means you can cover this payment as soon as you remember, even if you forgot to leave room for it in your monthly budget.

Family emergencies

Sometimes, an emergency fund isn’t for emergency situations in your own life. You might have a sick family member and need to suddenly fly across the country and take time off of work. Maybe a parent or sibling needs some financial assistance; with an emergency fund, you can help them out if you want to.

Life changes

Not all changes in your life that cost money are negative. You might suddenly be expecting a baby or need to move for a better job opportunity, but do not have the immediate finances to cover that cost. Maybe you need an expensive medication or want to take a spontaneous trip. An emergency fund gives you the freedom and peace of mind to handle these changes and keep moving forward.

Original Post

4 Steps to Take When Comparing Insurance Companies

compare-insurance-tejesh-kodali

At some point in your life, you’re going to need to put thought into the type of insurance you have. You’ll need to choose car, health, life, and home insurance; making so many decisions between a variety of companies can feel overwhelming, especially when it’s such important protection for various aspects of your life. Here are some tips on how to choose the best insurance for your life and make these major decisions a little less daunting.

Carefully compare the coverage

People too often simply go with the first coverage they look into and that seems to fit into their lifestyle and budget. It’s easy to choose insurance so you’re done with the decision and can move onto other important tasks you need to do, but the type of insurance coverage you choose to go with is incredibly important, even if it doesn’t seem like it affects your day-to-day living. As you’re looking at different insurance companies, write down the options, costs, and details of each company and plan. Then, you can compare them all side-by-side and see which works best for you.

Talk to actual agents

While it’s convenient to get a quote or find details online, it’s also vital that you speak with actual agents for the company. You need to know whether or not you’ll get quality customer service from the business and how easy it is to file a claim or ask any questions you may have. If it’s too difficult to get in touch with a real person, you may want to consider going with a different company. If the business has local branches, visit an office in person and ask any questions you may have.

Read client reviews

An insurance plan could seem wonderful and you may feel comfortable with the agents you spoke with, but if all of the customer reviews are negative, it’s probably not a company you’ll want to go with. Look online to see what the reviews are for the business and what common complaints people make. A few complaints could simply be one-time problems, but if there are recurring complaints about a specific issue, it’s a red flag.

Think about your lifestyle

When you’re looking for insurance, you’ll need to know what your budget is and what protection you’re looking for in your insurance. If you rarely drive, you can dial back on car insurance and get a basic plan. For home insurance, think about the various threats in your area and then make sure any policy you chose has those coverages.

Original Post

4 Financial Goals for People in Their 30s

financial-goals-30s-tejesh-kodali

Financially, your thirties are the ideal time to start building wealth. In people’s 20s, they typically spend that decade growing a professional career and identifying financial best practices. Many people in their 20s are occupied with paying off student loans and saving up what money they can to travel or to eventually purchase a home. As you get older, you’ll learn financial best practices and have greater earning potential.

With age comes wisdom. While twenty-year-olds are worried about making ends meet, paying rent, and finding a job they love, thirty-year-olds are generally more established in these areas. Anyone approaching or well into their 30s should be dedicated to becoming financially stable. It’s never too early to set ambitious financial and professional goals, but your 30s are the primetime to do so.

Move up in your career

30-year-olds are well aware of their skillset and have several years worth of job experience under their belt. Now is the time for them to advance their careers by pushing forward in their professional life. Whether this advancement takes the form of a promotion in the office or a complete career shift, this period in one’s life should be dedicated to professional advancement.

Evaluate your budget

With more money comes more goals, as well as more responsibility. While it’s common for one’s budget to change from year to year, as people reach their thirties, they may need to radically reevaluate their spending. During one’s thirties, it’s time to consider altering their budget to accommodate getting married, starting a business, or having children. A new budget helps determine where and how your income will be divided over the next few years.

Rethink your insurance coverage

As you enter your thirties, you’ll realize that you have more assets to protect. If you’re married and have children, it’s even more important that you have adequate insurance to take care of your family. Now is the time for 30-year-olds to rethink their insurance coverage to make sure that they are properly protected. Depending on an individual’s family and home life, they may need to consider auto insurancehome or renter’s insurance, or life insurance.

Increase the emergency fund

Your thirties should bring financial security. Gone are the days of living paycheck to paycheck and skipping meals until payday. You should take advantage of any excess income by growing your emergency fund. An emergency fund with enough money for three to six month’s of expenses is the ideal goal and can help if you lose your job or have surprise medical bills.

Your thirties begin the start of a new financial journey. Follow these four tips to ensure financial stability and start building wealth.

Original Post

3 Tips for Paying Off Debt

pay-off-debt-tejesh-kodali

For some people, debt is an inescapable part of their everyday life, but it doesn’t have to be that way. Tackling sky-high credit card bills and paying-off those never-ending student loans really is possible for the most money-savvy amongst us. It might seem like you’re bogged down with debt and you’ll never make a significant dent in it, but there are certainly ways out if you take it one step at a time. Read on for some of the best tips for paying off debt.

Understand that every dollar matters

Making the most of each dollar is the first step for anyone trying to get out of debt. While it’s tempting to subscribe to the attitude of “treat yourself” when it comes to splurging on luxury items and expensive products, in order to save as much as possible and get rid of debt, it’s essential to cut back in your spending. Start this process by putting together a detailed budget.

According to NerdWallet, it’s a good idea to use the 50/30/20 budget. This method focuses on spending 50% on essentials, 30% on wants, and 20% for paying off debts. For individuals that are truly committed to lowering their amount of debt, it is beneficial to tap into the “wants” percentage for extra funds.

Embrace the side hustle

The concept is simple: make more money, pay off more debt. Embracing the side hustle lifestyle allows you to have multiple streams of income, in addition to your regular paycheck. Though these side hustles will add several hours to your weekly schedule, the extra income can have a major impact on the amount of debt you’re paying off if you’re using that money wisely.

The best side hustles to consider are part-time or one-time opportunities that tap into an your particular skill set or resources. For example, homeowners looking for extra income can turn to Airbnb, just as writers with a knack for creating quality content opt for freelance blog writing.

Take a hard look at your values

Many people want to save more, but can’t get over the hurdle of cutting back on their monthly expenses. For most people, putting limits on spending means downsizing and no longer spending as freely. Individuals that would rather “keep-up appearances” find themselves at odds with the mindset required to follow a strict budget. However, budgeting is an important part of spending less and saving more.

In order to change one’s spending habits, you need to align your money mindset with your values. Someone that truly values being debt free will be able to overcome looking less than luxury as they try to save more.

Getting over debt is possible. Put these three strategies into practice to start getting over debt today.

Original Post

4 Great Books on Finances that Every Financial Enthusiast Must Read

books-finance-tejesh-kodali

Managing finances is one of the most critical skills that all individuals should aim to possess, especially once they start working and earning a paycheck. Eventually, you’re going to have money that you need to decide how to spend. If you’ve never received any kind of education on how to best manage money and ensure your expenses are covered, it’s important to learn as soon as possible to avoid colossal debt. Here are some of the best books on finances you can read and learn what to do with your hard-earned cash.

Rich Dad Poor Dad by Robert Kiyosaki

Probably one of the best-selling finance books in the industry, Rich Dad Poor Dad, compares two families: one that has less money and family that would be considered middle-class. The book highlights that individuals should not only learn how to plan their finances but should go further and instill financial knowledge in their children. This teaching helps guarantee that children have financial knowledge when they grow up and can avoid mistakes their parents may have made.

Liar’s Poker by Michael Lewis

This book is a critical finance book that offers insights to individuals who want to learn more about the bond market. A bond is a financial instrument that is used by the government to control inflation and interest rates in the country. Any person who is interested in matters concerning inflation and interest rates on loans should go ahead and buy this book. The book goes further to explain the causes of the market crash several years ago, which was facilitated by the housing market.

Freakonomics by Steven D. Levitt

This book is a finance book that addresses the common aspects that individuals experience on a daily basis concerning money management. The book does not focus on solving a particular market but helps educate an everyday person in making sound financial decisions with the aim of getting the best value while at the same time minimizing expenses. This book goes further to help homeowners and real-estate agents on how they can get the best deal possible when searching for property.

The Richest Man in Babylon by George S. Clason

This book is a personal finance book that offers insight to individuals on how to deal with different financial situations on a daily basis so that they can make accurate decisions. The personal finance book is handy for borrowers and creditors as well. According to this book, managing finances professionally is an essential factor as it helps individuals to retain their wealth and can prevent you from making costly mistakes.

Original Post

3 Reasons You Need to Educate Yourself About Personal Finance

personal-finance-education-tejesh-kodali

Money is one of the most important things in life; the more money someone has, the more freedoms they effectively have since they are more able to make choices to live where and how they want. Some people are fortunate enough to inherit vast sums of money from family members or spouses, but most of us aren’t that lucky. Bill Gates, for example, has so much money that he doesn’t have to be financially literate; he is, of course, but everyone who lives paycheck-to-paycheck or close to it should be well-informed about personal finance.

There are several reasons why you and everybody else on the planet should know personal finance inside and out. Unfortunately, in the United States, barely more than 50 percent of adults are financial literate, says Standard and Poor’s Rating Services Survey “Financial Literacy Around the World.” The United States is both the wealthiest country in terms of gross domestic product and has the highest number of billionaires residing in the country, yet we’re far behind other countries when it comes to teaching and understanding financial literacy.

Even though so few Americans are financially literate, the basics of personal finance – everything someone would need to know to make responsible decisions – are not difficult to understand.

You’ll avoid frauds

If someone is financially literate, they are responsible in their decision-making as far as money and debt are concerned. People who are financially literate should be able to know differences between checking and savings accounts, how to calculate interest, and what inflation is. Thanks to this knowledge, if you’re financially literate, you’re much less likely to fall victim to some kind of financial fraud. You understand how to keep your personal information secure, avoid any investments that seem too good to be true, and are aware of various other facts that make it harder for you to fall victim to scams.

It provides comfort and a sense of security

Once someone is caught up on personal finance, they are less likely to feel anxiety related to money problems, have to borrow money, or waste money. All of your financial health improves as you educate yourself on personal finance.

Not only are people better off if they know about personal finance; they can talk about financial information and offer advice to their friends. The more common personal finance becomes in society, the more likely parents will be to pass the knowledge onto their kids and set them up for financial success.

Planning for retirement is a lot easier

Once someone learns about personal finance, they can then reasonably explore the world of financial investments and actually understand what’s going on. Investing is a personal finance topic many people lack understanding of, but if you work on building up your foundation of knowledge of personal finance, you’ll eventually see how much easier it is to plan for retirement once you have a greater understanding of investing and your options.

Original Post