Kicking Assets

A young person's guide to personal finance

Tag: finance

15 Money Mistakes to Avoid in Your 20s

April 21, 2020 / / 0 Comments

Your 20s are a fun and exciting time in your life but many important life decisions are made in your 20s and most of them revolve around money. There’s a lot of financial talk going around about what you should be doing with your money in your 20s, but don’t you want to know what not to be doing? In no particular order, here are 15 money mistakes to avoid in your 20s!


1. Spending too much money on rent
While rent prices vary depending on location, as a rule of thumb, you shouldn’t spend more that 30-40% of your annual income on your annual rent. Don’t rent beyond your means. Do your research and try to find roommates.

2. Not having an emergency fund
You never know what life is going to throw at you. It is very beneficial to have an emergency fund set aside in the event of a medical expense, a car accident, or even losing your job. It is suggested that you have 3 months worth of salary set aside but just start small and build it over time!


3. Not having insurance
Going off of the last point, get insurance! You never know what will happen. Whether it is health insurance or renters insurance, insurance is a very important investment. It is always good to be prepared.

4. Pretending you can afford expensive outings
FOMO is real and it may be hard to resist going out with your friends, but if weekly Sunday brunch is hurting your bank account, you may want to cut back. Suggest cheaper alternatives to your friends who may have higher salaries!


5. Not negotiating your first salary
Entering the workforce is really intimidating, and many young people make the mistake of not negotiating their salary. Even if it’s not that much more, it doesn’t hurt to try. Learn to say no and know your worth!

6. Not reading the fine print
When you are signing a lease, employer agreements, or any kind of contract, don’t forget to read the fine print. It is important to know exactly what you are agreeing too. It could save you a lot of money in the long run.


7. Not saving for retirement
Retirement seems so far away, but the sooner you start saving for retirement, the better the payoff will be in the end. If you have a full time job, see if you qualify for benefits.

8. Not having financial goals
Financial goals guide you in your money endeavors. It is important to know how you are going to save and spend your money.
Check out our last blog post to read more about healthy financial goals.


9. Failing to track your purchases
It is so easy to track your spending. When you see your purchases all laid out in one place, you are able to see where your money is going and what things are necessary and unnecessary.

10. Forgetting about monthly subscriptions
Monthly subscriptions can add up and oftentimes they are not all necessary. It is easy to lose money by forgetting to cancel subscriptions after free trials are over.


11. Committing to higher education without a plan
College is not for everyone, and graduate school is not for everyone. When considering going to school, think about whether your debt is going to pay off in the long run. It is important to have a long term plan.

12. Not having multiple streams of income
This may not be possible for everyone, but if you have the chance it is very beneficial to have multiple streams of income. These days, there are so many side hustles that can earn you extra cash, even from home!

13. Buying a new car
Buying a brand new car is a huge investment. Your car is a depreciating asset. Its value declines the second you drive it off the lot. Buying a used car can save you a lot of money and still gets you from place to place.
Check out our blog about buying a car.


14. Not comparing prices
When shopping, avoid automatically opting for the first thing you see. Do your research and find the cheapest option for what you need. While it may just be a one or two dollar difference, those few dollars can add up in the long run.

15. Avoid lifestyle creep
According to Investopedia, Lifestyle Creep is the phenomenon where discretionary consumption increases on non-essential items as the standard of living improves. Just because you get a higher paying job, doesn’t mean you can start spending more and buying expensive things. Always keep a frugal mindset and be responsible with your money!

Edited by Marcus

How To Build A Good Credit Score

March 10, 2020 / / 0 Comments

Written by: Brianna

I know what you’re thinking, what the heck is a credit score? That is the same thing I thought going into this too. Here are some tips I found and thought I would share so we can all learn together! It’s good to find out how to start a credit score before adulthood comes into place, since you need a credit score for your future adult purchases. 

 

“A credit score is a statistical number that evaluates a consumer’s creditworthiness and is based on credit history: number of open accounts, total levels of debt, and repayment history. Lenders use credit scores to evaluate the probability that an individual will repay loans in a timely manner. A person’s credit score can range from 300 to 850; the higher the score, the more financially trustworthy a person is considered to be.”

 

Five tips to help you build a good credit score

  • Pay your bills on time
  • Use your credit card on important transactions only
  • Maintain your credit cards and pay it on time
  • Don’t open several credit cards at the same time, space it out. 
  • Write down what you purchase on your credit card to avoid overpaying

 

What Is Considered A Good Credit Score?

So, there is a scale it ranges from 300-850, a good credit score starts at around 690. So automatically anything higher than 690 would be considered the excellent which is where we need to aim at. 

Aiming to achieve a good credit score can teach us responsibility that we know how to pay on time and eventually it will prepare us for the real world.  

You can check out this free app called Nerd Wallet to find out if you have a good credit score…. For free?? Sign me up!

The benefits to having a good credit score

  • You will qualify for the best interest rates
  • You can get a more affordable price on apartment/house payments
  • Employers can also look at your credit score to see where you stand
  • Approval for loans from bank won’t be a problem
  • Pay less on car insurance 

 

Here are only a few of the benefits you gain from a good credit score. But did I also mention the bragging rights? Who doesn’t want to brag about having a good credit score when it’s something to be proud of? Start maintaining a good credit score now the earlier you do it the better!

 

Edited by Victoria

Money Management 101

March 2, 2020 / / 0 Comments

Whether you’re in college or just entering the workforce, it is crucial to be responsible with your finances. However, it can be really scary and overwhelming to think about your money and the impact it has on your future. Here are three tips for managing your money!

1. Track your spending & Create a Budget

It is so easy to lose track of your spending. As a young adult, you should begin tracking your spending and creating a budget for yourself. This may seem intimidating, but it is actually really simple! Start by listing your monthly expenses in categories, such as bills, transportation, food, and entertainment. Access your spending and find things you can cut out of your spending on a monthly basis.

A simple and popular budgeting rule to follow is the 50-30-20 rule. This budgeting rule puts 50% of your monthly income toward necessities, such as rent and bills. 30% of your income goes towards “wants”, such as dining, shopping and entertainment. Finally 20% of your monthly income should go toward your savings.

There are also plenty of apps available that can help you create a budget and track your spending as well. Check out our blog about four personal finance apps here!

2. Build Your Credit

Credit cards can be very handy, as there are no overdraft fees. However, it is so important to only spend what you have and what you can pay back. Paying off your credit in full each month will help you build your credit up. A high credit score is very beneficial as it can help you in the future qualifying for loans and making big purchases.

Check out our blog about credit cards here for more information!

3. Start Saving Now

Using the 50-30-20 rule will make you put your money towards your savings, but even if you aren’t using that rule It is still important to start saving while you can, and building up.

It is a good idea to start an emergency fund. Putting money towards an emergency fund can help you tremendously down the road. Life can hit you by surprise. This emergency fund will be useful if any medical, vehicle or other unexpected expenses come up.

It is also important to save up as you start thinking about paying off your loans after graduating.

If you have a job, your employer may offer 401k benefits and you can start saving and investing!

In summary, track your spending, create a budget, build your credit, and start saving. These three simple tips will help you manage your money and make dealing with your finances much easier!

 

Edited by Marcus

Talking About Sales Tax

February 27, 2020 / / 0 Comments

Have you ever wondered why the price of your date night always costs more than you were expecting?  Why do the prices on the menu not add up to the total on the receipt? How come your new suit or dress always costs more at the register than it does on the price tag? These are all important questions that can be answered with just two words… Sales Tax.

What is Sales Tax?

Sales tax is commonly referred to as a tax put on goods or services by a governing body in order to fund various public expenditures.  Sales tax is commonly attached to tangible personal property such as common retail items like furniture, beauty products, paper goods, and much more.  The amount of sales tax you pay for a particular item depends on where you are located. For example, in Austin, Texas sales tax is 8.25% however, in Miami, Florida sales tax is 7%.  To find out what your state and local government sales tax is go to the Tax Foundation website.

It is important to note that not all states have sales tax. Alaska, Delaware, Montana, New Hampshire, and Oregon are the only five states in the U.S. that do not have a sales tax.

 

Image result for sales tax

How to Calculate Sales Tax

To calculate sales tax use this formula: Total item price x 1 + sales tax rate = total sales tax

For example, let’s say you are buying an item priced at $10.00 and the sales tax rate is 7%.                                                                                          The $10 total item price x 1.07 = $10.70

As you can imagine, the final cost of your bill can increase dramatically if you are buying a large quantity of items. That is why it is always very important to make sure that the money you have not only covers what is on the price tag but what is on the receipt after sales tax has been included. One of the most embarrassing things you can do as a consumer is forget to take into consideration the additional cost of sales tax. If this happens you may not have enough money to afford everything in your shopping cart or on your  restaurant bill. That is why taking sales tax into consideration is extremely important for anybody wanting to make smart financial decisions and ultimately be a savvy consumer.

Image result for shopping

What are Tax Holidays?

A tax holiday is a temporary time period in which tax is either dramatically reduced or eliminated. Oftentimes tax holidays are the best times to shop or clothing or school supplies because sales tax is no longer added to the total cost of these products. Tax holidays are usually put in place by state or local governments to give consumers and businesses a temporary tax relief.  For example, the state of Texas has implemented a tax free holiday. In 2020 this tax free time period is between August 7th through 9th. During this holiday most clothing, footwear, school supplies and backpacks (sold for less than $100) are tax free. To find out if your state or local government offers a tax free holiday go to the Sales Tax Institute.

 

 

 

4 Personal Finance Apps You Need

February 20, 2020 / / 0 Comments

It can be intimidating to think about budgeting, saving, and investing. Thankfully there are great apps available that make these things easy in painless, right in the palm of your hand! Here are four great apps that are very simple and helpful in helping you make good financial decisions.

  1. Mint
    • Free
    • Available on iOS and Android
    • This app allows you to create your own budget, track your spending, and will even send you reminders to pay your bills. You can connect your bank and credit card accounts, and even your bills, so that all of your finances are conveniently on this app. Once your accounts are connected, Mint will automatically track and categorize your spending and transactions in order to help you handle your money. Mint is even able to show you your real-time credit score.
  1. Acorns
    • $1 a month or FREE for college students with a valid .edu email
    • Available on iOS and Android
    • Clueless about investing? This app will help you get started. How it works is, you connect your card, and every time you make a purchase, Acorns rounds up your purchase to the next dollar, and invests that change into an account that is set up for you. For example, if you buy a coffee that is $4.25, 75 cents will be invested for you.

 

  1. Qapital
    • Free
    • Available on iOS and Android
    • Similar to Acorns, once you connect a checking account, every time you make a purchase, Qapital rounds up the transaction to the nearest dollar. That extra change is put into a new FDIC-insured account that doesn’t require a minimum balance or any monthly service fee. Through this app you’ll be able to easily save money without even realizing it. The account is also able to earn a small amount of interest.

  1. Clarity Money
    • Free
    • Available on iOS and Android
    • Clarity is useful in many ways but is best known for tracking your subscriptions and cancelling any unused subscriptions, so you’re not throwing away your money. Clarity can also help you track your spending habits. By connecting your bank accounts, Clarity is able to organize your expenses, break down your spending by category, and track your transactions at a glance. In this app, you can also grow your savings by opening a High-Yield Marcus Online Savings Account.

 

All four of these apps can be very useful and helpful in your financial journey. They do all of the hard work for you! We hope you give at least one of these apps a try and find them helpful.

 

 

Edited by: Brianna

So You Want a Credit Card?

February 12, 2020 / / 0 Comments

Written by Kristina

You’ve reached the point in your life when you decide it’s time to get a credit card. But what exactly does that mean?

“The most important thing to understand about a credit card is that it DOES NOT increase your buying power as a consumer. If you can’t afford those shoes with cash, you can’t with a credit card. If you don’t think with this mentality, you run the risk of developing large amounts of debt.”

Applying for a credit card for the first time can be a bit intimidating and overwhelming. I know for me as a college student and young adult, I wasn’t really taught anything about the steps for applying for a credit card. Here, you’ll find a basic guide on what to expect when applying for a credit card and some helpful tips along the way.

Prepare Before Applying

It may seem as though you can jump into the credit card application process right away, but it isn’t that easy. Obtaining a credit card requires approval. Here are some tips to take into consideration before going straight to the application:

  • Make sure your finances are up-to-par
  • Make sure you are eligible
  • Do research on cards/banks that will best fit you
  • Don’t apply for the first card you see
  • Look at rates and benefits

Taking these tips into consideration before applying for your credit card may improve the chances of your approval.

Choosing the Right Credit Card

Going into it blindly, you may not know that there are different types of credit cards. This include unsecured credit cards, secured credit cards, cash back reward credit cards, and retail cards. These are only some of the options available.

  • Unsecured credit card: This is the most popular form of credit card which requires no security deposit to be approved.  When someone  says “credit card”, this is typically what they are referring to.
  • Secured credit card: This card is typically for those with no or damaged credit. This type of card requires a refundable deposit so it is less risky for the banks.
  • Cash back reward credit cards: This type of card offers a percentage of cash back on certain purchases.
  • Retail Cards: This card is specific to certain retailers (e.g. department store) and provides discounts or points for products. (This card is not recommended for entry level credit card holders).

To learn more about specific credit cards that may be good for credit, click here: https://wallethub.com/credit-cards/good-credit/ 

Submitting the Application

Now that you’ve done your research and prepared, you’re ready to submit your application. You have two options when it comes to filling out the application. You can either 1. Submit an online application, or 2. Fill out a hand-written application at your preferred location.

With filling out an online application, there is a possibility that you can see your approval or denial instantly. Once the application is done it is time to wait. And don’t worry if you don’t get approved the first time, many don’t! It may take several applications, but with the proper knowledge and effort, you’ll soon get there.

#finance #money #credit #application

 

Edited by Victoria

Finance Basics; Assets & Equity

February 10, 2020 / / 0 Comments

Finance Basics; Assets & Equity

Written by Marcus

Image result for tangible assset

For many young adults, the thought of managing their finances is intimidating. As a college student myself, I understand how stressful finances can be. Managing student loan debt, car payments, utility bills, rent and so much more causes many of us to feel overwhelmed.  Over the years, I have learned that finances don’t have to be stressful. In fact, being able to manage your finances with confidence is actually quite empowering.  Before you can take control of your finances and become confident in your money management, there are a few basic things that you should know.

What is an Asset?

An asset can have a multitude of meanings depending on the circumstance or context in which the term is being used. However, for the purposes of your personal financial accounting, an asset is any resource, tangible or intangible,  which is owned or controlled by you that can produce positive economic value.

Identifying Assets?

Assets can be classified into two separate categories, tangible and intangible. Tangible assets are physical and often easy to evaluate. Common tangible assets that a young person may have include vehicles, currency, furniture etc. Intangible assets rarely posses physical qualities and can be harder to evaluate. Common intangible assets that a young person may include patents, permits, brand names, domain names, licences, etc.

To identify whether an asset you have is tangible or intangible you can visit YourDictionary.com

What is Equity?

The word equity is most commonly found in the field of finance.  In terms of finance, equity is ownership of assets that may have debts or other liabilities attached to them. To calculate equity, you simply subtract your liabilities from the overall value of an asset. For example, your car is an asset and if the value of your car is $20,000 but, you owe $5,000 on the auto loan you used to purchase the car, you have 15,000 in equity.

Image result for Asset minus liability

Positive Equity Vs. Negative Equity

Equity can be separated into two different types. There is positive equity and negative equity. Positive equity is when you have an asset that is worth more than the liabilities or amount you owe, (owning a $20,000 car, but only owing $5,000 on the loan). Negative equity is when your asset is worth less than the amount you owe (owning a $20,000 car, but owing $25,000 on the loan). Negative equity is commonly referred to as being “underwater” or “upside down”.  If you are smart with your finances, investments, and money management then you can avoid accumulating negative equity.

Image result for negative equity

Why do Finances Matter?

As young people, managing your finances isn’t always the most fun or entertaining thing to do, but it is important.  As we transition out of our childhood homes and begin gaining financial independence, it is imperative that we understand how finances work so that we do not get taken advantage of and avoid making bad investments. Young people like myself are in an exciting stage of their lives. The financial decisions we make at this point in time can have significant impacts on our future, so being smart with your finances is crucial.

#Finance #Money #Assets #Equity

 

Edited by Garrett

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