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Five reasons you get pulled into debt


All of us know that debt can lead us to very disastrous effects in life.

And yet, most of us are stuck in the pit of debt and credit card bills, asking ourselves, ‘why am I even in debt?’ and ‘how the hell do I get out of here?’

We’ve scrutinized the major causes of debt and thus we have shortlisted five of the major reasons that young Indians fall into the rut of debt.

1.       LACK OF A BUDGET

Most of the time, poor budgeting invokes debt. You must have a monthly budget. Without a proper budget, you will not be able to track your expenses. And if your expenses exceed your income, you will be pulled down to debt.

2.       INCOME ISSUES

If you are currently going through a rough patch in your career or if you are unemployed and are looking for a job – the period might be low. But the effect that it has on your finances in the long run, is huge. It can have a lasting effect, because you’ll be wanting to make ends meet and will thus be forced into taking up credits or loans.

3.       DEATH AND DISABILITY

A shockingly large number of Indians, are living without an insurance cover – and thus at the occurrence of an unfortunate event, they stumble into a severe state of financial crises. It is very important to get a life cover, especially if you have loved ones depending in you. 

4.       OTHER MEDICAL EXPENSES

Every single step you take inside a hospital is going to cost you money. Not having a proper health insurance will only make you slip into debt a lot easier. And when you don’t have the money to pay for your emergency bills, it will look easier to swipe and put the money on your card or take out a loan – but there begins your tread down the debt road. 

5.       LACK OF SAVINGS

If you want to avoid unwanted debt, try to be prepared for unexpected expenditures by saving some money. Being prepared for those rainy days, is a sure way to help you stay out of debt.

The whole point of leading a life with savings and lots of financial planning is to be self-sustained, after all.

READ ALSO:  Pitfalls of Financial Goals

READ ALSO:  Dealing with your debt

Written By: BALAKARTHIGA.M

Personal finance for Teens



The sad thing about today’s teens is that they are well versed and extremely knowledgeable with science and technology, but they are shockingly ignorant when it comes to what they know about personal finances.

Here are a few important morsels of personal finance that you must teach your teens.

1.       Starting Small and Early

The price one pays for delaying investment steps is quite huge, and make sure that your teen acknowledges this fact. Ask them to start early – even if they start with quite small amounts, its fine. But you need to ensure that your teens have a healthy attitude and a ton of patience when it comes to managing their wealth.

2.       Standard of Living

Talk to them about what your family income is, the family budget and investments. Express whether you can afford to pay her education, hobbies, and marriage expenses. Many parents do not discuss these things with the kids, the results of which can be fatal.

Your teen needs to know whether a 30 lakhs per year college is a possible or an impossible demand.

3.       Compounding and Saving

Your teen might have learnt about compound interest at 7th standard. Leverage on that and encourage habits of saving and having goals. 

The magic of compounding and its amazing results will give them a glorious start. The earlier they discover the avalanche effect of compounding, the more they will be able to make their money work for them.

4.       Investments

Talk to your children about all the investment plans you have taken, and why you decided to go with them. Investment and finances should become a family lingo. 

Impart the knowledge that with great risk comes great reward and that patience is always the key.

Yes, we agree that discussing finances with teens can be a tough step. It has to be done flawlessly, with accurate logic and facts, and as minimum emotions as possible.

But remember, no great financial advisor can do this better than you, as a parent can.

Read Also THREE MAJOR RULES OF PERSONAL FINANCE

 

Written by: BALAKARTHIGA.M  

Financial goals for your 30's



If 20s are the best time to build a strong financial foundation, then your 30s is the best time to start making your wealth grow.

1.       Getting Rid of debt

This means your student loan, your credit card bills, your car loans and any other debt. The idea behind this is to get rid of those high interests and setting yourself on an interest-free life. It not only makes saving much, much easier, but also makes you feel so much lighter!

2.       Investing Wisely

At your 30s, your portfolio must look promising. Learn more and read extensively about investments, and make sure that you consult the guidance of a financial advisor or any other investment professional.

Remember, investments are the best ways to increase your savings.

Read also: Get motivated to save

3.       Saving For a Home

This is the key step to get up the property ladder, and your 30s is the best time to start thinking in this direction. Saving for a home takes a lot of time.

Make sure you carefully plan this budget so that you end up feeling satisfied.

4.       Career and Retirement Based Decisions

Solidify your career goals. Plan your retirement and work towards saving for the said plan. You might have plans to advance your career so that you can get earn those extra bucks, and attain self-actualisation – but having a strategy will help your stay motivated.

Your financial goals in 20s are a great way to get started on being money-wise, but your 30s is the times to grow.

One important note to remember is that the financial decisions that you make in your 30s might haunt you in your 50s.

Keep that in mind as your sketch and implement your wealth strategy for your 30s!

Read also: Five money habits you need to master

WRITTEN BY: BALAKARTHIGA.M

Get motivated to Save



No one ever says no to a bulky bank account. We all want to save, and we want to be a little more financially responsible.

Saving isn’t as hard as you think. Here are a few tricks that might help deceive yourself into saving.

1.       Go Tech

If you think you give in too quickly, or that it becomes difficult for you to save, get the help of technology! We live in a golden era where we are capable of spending so easily and at the same time in an era where we can save intelligently with the help of tools that the previous generations never had.

There are several budgeting and personal finance apps available that are creatively modelled to help you save more.

2.       Be Engaged

An idle mind is a Devil’s workshop. Make sure you have a dependable pastime or a hobby that you enjoy. Having an engaging hobby or a passion, might keep you away from turning into a spendthrift who spills bucket loads of money on entertainment and leisure.

3.       Have a Goal

Don’t just save up to a target amount. Save keeping in mind a target goal. If you want an expensive gadget or a piece of jewellery, tell yourself you will not buy it with your card or cash, but that you’ll save up to it. This way, you’ll stay motivated to save, because you have a reward waiting at the end of it for you! 

4.       Positivity

Keep your friends, family and well-wishers around, and make sure that you are being surrounded by positivity. Being around people who are smart with money, and are successful is a sure way to keep you motivated. Stick to your goal, and kick out the cynics and sceptics.    

5.       Quit Emotional Shopping.  

You’re feeling a little down because of the fight you had with your boyfriend, and you need new shoes......right? 

No!! Bad idea.

Turn around, get back inside the house, lock the doors, and ask someone to hide your keys right now.

Such spur-of-the-moment purchases may uplift your mood for an hour or two, but  you’ll be left feeling worse as you realise you’re left with nothing more than an empty bank account.  

Wanting to save your money is the first step towards being good at personal finance. You reading this article till the end is proof enough that you are on the right path!

WRITTEN BY: BALAKARTHIGA.M