Where’s All Your MONEY GOING?
Feel like you’re always strapped for cash? So is Anupriya Bishnoi, 23, journalist. So we asked her to document an entire month’s spends, then had an expert offer pro advice.
According to a new CareerBuilder survey, 40 percent of 18- 34-year- olds are living paycheck to paycheck— and it’s even higher for women! Writer Anupriya Bishnoi is part of this demographic, rarely having any dough left at the end of the month (and no savings). “On the first of each month, I promise myself that I’ll spend ‘smart’ and save some cash,” says Anupriya. “But less than 30 days later, it’s the same story...and I have to rely on my credit card to help me through the rest of the month.” According to Anil Rego, Financial Expert, CEO and Founder, Rights Horizon (he helped review Anupriya’s expenses), most people end up overspending because they don’t have a financial plan. “All it takes is making a few critical changes, and you’ll have money in the bank while still having a life,” says Rego. Here, his tips on how Anupriya (and you) can manage the moolah better...
Rego says Anupriya must set a monthly budget. 50% of her money should go towards necessities (rent, groceries, etc), 40% is for indulgences (clubbing, shopping, etc), and 10% should be saved. “If she is a low-risk investor, she may consider recurring deposits offered by banks,” he says.
“Anupriya should consider sharing an apartment with a friend, since a sizeable part of her income is going toward house rent,” says Rego. Use social networking sites to interview and find a future roommate.
Rego warns against Anupriya’s credit card usage. “Sure, plastic lets us buy items that are beyond our reach, but that’s unhealthy when your expenditure is higher than your income,” he says. Worse: paying only the minimum amount due means you’re being charged interest... and actually paying much more than you owe the bank. “Using paper money helps keep tabs on the amount spent. Anupriya should save her credit card for emergency situations only,” says Rego.
You don’t have to stick to what you make, says Rego, there are so many ways to increase your income. “Anupriya could start her own website, sell items online, or try freelance writing to make some extra money,” he says.
Make an effort to save a little bit of cash, wherever possible, says Rego. “For instance, instead of eating out, Anupriya could invite friends over for dinner.” Other ideas to consider: change your phone plan to a more cost-effective one, keep tabs on tips, buy bulk presents during store sales, swap clothes with friends, pack lunch from home, etc.