Tag Archives: Budgeting

Why You Need The App Venmo Now

So if you haven’t heard of Venmo, stop reading and look it up right now. What do you think? Every one of us millennials should be using Venmo all the time. Venmo is a practical smart phone app that allows for friend groups to keep track of finances and pay each other back instantly. Venmo is linked directly to a bank account of choice, allowing for rapid money transfers from account to account with a click of a button. Just think about how much easier this will make your life. An app like this takes the awkwardness out of IOU’s and the ‘you owe me this from god knows how long ago’ situations. With Venmo, you can split bill with your buddies, break up grocery costs with your roommates, taxi fare, drinks, dinners, shopping etc. There is even a part of the app that lets you request money owed. This is like a virtual IOU reminder for your friends letting them know how much they owe. Having Venmo is like having electronic cash right in your pocket, and the best part, payments can be accurate, down to the exact cent.

Although Venmo may not directly save you any money, considering the fact that being a mooch is no longer an option, it does allow you to be more responsible with your finances. Another benefit to the electronic component of the payment system is that all transactions are listed on your online banking account website, making spending tracking easy, especially when using mint.com as well or other budgeting resources.

Another great feature of the app is it links to your Facebook account as well. This means that there is a social component to your account as well. With every transaction you are able to send a message or details of the payment that can be posted publicly or kept private. Usually my roommates and I try and one-up each other with how ridiculous and funny we can make our comments. Facebook also makes it easy to find the people you need to pay back because your Facebook are also your Venmo friends.

Venmo will save money in the long run and allow you and your friends to be more stringent. You can keep tabs on your electronic finances. When everyone has the app, paying the bill is only as hard as drunk-texting. And we millennials have gotten very good at that. So go, download this app if you don’t already have it. You won’t regret it.

How The “Little Things” Can Control Your Financial Health As A Millennial

The other day I was in my apartment after a long workday and the Internet was down. Seeing as though I didn’t have much else to do without our beloved muse, I decided to re-watch one of my favorite movies: “Vanilla Sky.” For those of you who have not seen the film (shame on you), Tom Cruise gets in a horrible accident and is left with a deformed face. He must then go through life wearing a mask, reinventing his identity and hiding himself from his former life. The movie ends with a quote that I will never forget, “the little things in life…there’s nothing bigger, is there? In the context of the movie, Cruise’s character was referring to all the little moments in life that add up and can bring you happiness. While this is definitely true, I also think it can be applied in other areas of life, such as your finances! 

It’s the little things expenditures in life that add up and can lead to the biggest sum of debt. It’s the Starbucks, the fast food, the taxi rides, the drinks, the hair products, toothpaste, the gum or the dates that you pay for and buy every week that add up. Compared to more serious investments like your monthly rent, these expenses don’t seem very damaging to your wallet, but over time these costs combined can be very detrimental. 

What’s a couple bucks here and there? A couple of bucks here and there is $3,000, 5,000 or 10,000 dollars worth of small instant gratifications spent over a year. One thing you can do to prevent these small costs from getting out of hand is to plan ahead and budget exactly how much you have spent in the past, over a certain time frame. I’m predicting the results will blow your mind. Just the other day I was looking at some of my daily spending habits. Every day I get breakfast for about $4.50. Multiplied by 261 workdays in a year, I am spending $1,174.50 on a breakfast that could cost me $0.75 if I prepared it for myself at home. Lunch was even more costly, at a daily rate of around $9, meaning I have been spending $2,349 a year. If I cut that down to $3 a day, I could save $1,566 a year. Taking this out of your yearly salary on an annual basis makes that delicious lunch much less tasty. 

Every day I see some of my co-workers take their twice-daily trips to Starbucks. If we are saying on average a Starbucks order costs $3- $4, so x2 can be as much as $7-8. This then equates to $2,088 a year. Is it really the coffee they want? Especially when we have a Kurig machine right in our break room providing the office with FREE COFFEE in over 15 different flavors. Now some of this can be justified with needing a break from work and a friendly ritual with co-workers, but the point I am trying to emphasize is that you should really consider just how necessary these small purchases are in your life or if there are ways you can cut down on your spending with cheaper alternatives. If you want to be financially successful throughout your life you need to always be analyzing your wants over your needs. Do I really need this or do I just want it? 

A good way to counter this mentality is to focus on the why you are spending so much money on these things and if you can do without them in your life. Try to find substitutes if possible with smaller unit prices. If you’re out of college, maybe you want to buy your first car, a trip or a house in the near future. Setting larger goals will help detract from spending so much on the smaller stuff, especially after you have realized just how much every dollar counts. Staying away from instant gratification purchases will make you happier and more successful in the long run. Just remember that its the little things you buy that can be the biggest threat to you’re financial health, so always be aware!

Treat Your Life Like A Business With These 3 Statements

Businesses, like people come in all shapes and sizes. From big corporations, partnerships to sole proprietorships and LLC’s. These companies can range from businesses like Apple or Google to your sisters haircutting service or the local popcorn salesman on Main Street. You are a business, every day you make financial decisions and transactions with your finances to better yourself. You are constantly mirroring the acts of businesses all around you. Therefore, in order to be financially successful in your life you should always be thinking and acting like a business would, except instead working for a  product or service, you are in business for yourself and your product is a fulfilled life and financial security.

Budgeting with a ‘business sense’ is one of the tools that will get you there. A budget can be created by using the information from 3 different statements that businesses use everyday.  Like any business, you need to keep in touch with your accounting and finance department regularly in order to make smart life/financial decisions. This way you are aware of where your money is going and how you can make it work for you in order to get the best possible return. Using these statements or a financial tool like mint.com will help you keep track of your finances and how much you are spending and are going to spend on your “business”.

Income Statement

This is the statement that shows you your income in relation to your expenses. This statement usually is a single column report with income at the top showing your personal revenue. It doesn’t matter if the money is coming in from your job or other alternative sources of income., this just shows your inflow. The expenses are your outflow. The report will give you your NOI (net operating income) which is basically your personal profit. This will let you know if you are spending too much money. This way you can tell if you need to stop shopping in SoHo on Saturdays or buying too much late night pizza on the Lower East Side at 4am.

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(Click to Enlarge)

Balance Sheet

The balance sheet is your statement that tells you your net value at any given time. This statement breaks down your assets and your liabilities and what you physically own (equity). Here you will show your assets on the left column. These are things  like your cash, money that people owe you, your car, house, value of your investments etc. The right side has your liabilities. These are your debts, such as loans that you have yet to repay for a house or car, and/or your credit card debt. The left side is also where you put your equity. This is essentially your value or ‘net worth’. Your assets are going to equal your liabilities plus your equity. So the right side should equal the left. See below for a visual representation.

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Statement of Cash Flows

The statement of cash flows is important because this is where you are able to financially model where you will be at any given point in time.  this future value is based on certain assumptions such as how much you predict you will be making and how much you will be spending at a future point. This shows on a scale of time your income minus expenses.  It is usually a good idea to stay on the more conservative side because the future is never certain.  So it’s good to not overestimate income and underestimate expenses. Using this statement is helpful because you can see where in the future you will be able to afford more expensive things like a new car or vacation. This will keep you prepared. Click on the visual to see how this works.

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Even if you’re personal versions of these statements are on the more basic level that is okay. You are still making progress and will be more financially informed about your money. These are just power-ups to bring your budget to the next level. I would recommend updating them once a month, so you can always have an accurate sense of where you are. When finances are constantly on your mind you will be more self-aware when spending and save more money.

Stepping Up Your Budget Game

Recently, while attempting to tackle a vast amount of credit card debt, I came across the much-needed concept of Budgeting. Budgeting is an unusual verb that is not often used in this generation, I too was a little lost. Especially after spending way too much last year on bars, food, beer, lunch, dating and anything else that drains your wallet. I felt like I hit rock bottom financially. I realized I had spent way too much money on too many perishable goods and services. This was a sign I needed to take better control of my financial habits soon or else this terrible pattern was bound to continue.

When it comes down to it budgeting means control, and control is a product of knowledge. Back when I was spending too much, I was lacking knowledge. Financial knowledge about where I was and what I was doing with my money. That was my biggest problem. I wasn’t thinking about how all of my expenditures were adding up. I would always think I had more money in my account than what was actually there, forgetting about the small things that I had bought for lunch or at the stores after work. Note: Small amounts add up the quickest!  So after my card declined a few times I finally forced myself to take control. My first attempt to regain control was an approach any millennial would do in this day—turn to technology. Technology in the form of Mint.com

Mint.com is a budgeting website and application that you can easily download onto your phone, laptop, or other smart devices for free! Mint.com provides personal budgeting tools that allow users (your futures selves) to add all of your financial accounts and display all of your balances simultaneously. This is done in a similar way to an instantaneous balance sheet showing your personal assets and liabilities. I was able to add all of my loans (school and car), bank accounts (checking and savings), credit cards, 401K, and even my brokerage account on Mint.com. At any given time you can view your exact net-worth down to the penny. With Mint.com I am able to see my balances and account activity anywhere I go. This application provides an accessible display of my spending habits in the form of helpful visualizations.

The best part about this service is the categorization tool and the budget planning aspects. Within the site I am able to see all of the purchases that I make on my various credit cards and withdrawals from my accounts in real time. I also have the ability to put these purchases into specific categories to see where my money is going every month. Using these categories I am able to customize personal budget plans. I therefore am able to manage the amount of money I am going to spend on certain necessities such as alcohol, fast food, work lunch, breakfast etc. Mint.com service will even send my cell phone alerts when I am spending too much or have gone over my set budget. These budget limits also tell me if I am saving the appropriate amount so that I am able to pay my loans and credit card bills on time.

This service helped me tremendously with my spending habits and keeping my debt under control. I highly recommend this service to anyone and everyone who wants to be proactive about their financial budgets! See Mint.com for more information and remember, knowledge is power when it comes to taking control of your finances.

Below are some relevant screenshots of Mint.com.

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