The Finance Expert - Your Ultimate Guide For Saving Money In 2024 | Nischa
Added: Feb 5, 2024
In this podcast episode, Nischa, a former investment banker turned finance YouTuber, shares her journey from working in banking to creating content on personal finance. She explains how she initially pursued a degree in finance and accounting due to financial constraints in her family, leading her to a career in investment banking for nine years. Despite the glamour and perks of the job, she found it unfulfilling and decided to explore her passion for personal finance through YouTube.Key takeaways
Financial literacy is crucial for making informed decisions and achieving long-term financial stability.
Effective budgeting, saving, and investing strategies are essential for achieving financial goals.
When considering property and cars, factors like long-term plans and total cost of ownership should be carefully weighed.
Open communication and transparency about finances are vital for maintaining healthy relationships.
Transitioning from a stable career to pursuing passion often involves taking significant financial risks.
Transition from Banking to YouTube
Nischa took a leap of faith and quit her banking job to focus on creating content on YouTube full-time. Initially, she struggled to gain traction with only a few hundred subscribers. However, one of her videos went viral, leading to a rapid increase in her subscriber count. This success prompted her to choose between a six-figure bonus in banking and pursuing her passion for content creation. Ultimately, she decided to follow her passion, even though it meant taking an 80% pay cut initially.
Challenges in Personal Finance
Nischa highlights the lack of detailed information and guidance in personal finance, especially when it comes to managing money, saving, and investing. She emphasizes the importance of understanding the intricate details of financial management, such as setting up an emergency fund or investment accounts. Many people struggle with analysis paralysis when faced with overwhelming information, leading to inaction or poor financial decisions.
Importance of Financial Literacy
Nischa stresses the significance of being financially literate from a young age, as money impacts various aspects of life, including travel, education, and quality of life. She shares her own journey of learning about money through her banking career and interactions with wealthy individuals. Nischa encourages individuals to educate themselves about finances and seek professional advice to make informed decisions.
Lessons Learned from Personal Experience
The podcast host shares his personal experience of neglecting taxes and financial management while transitioning from a personal trainer to a content creator. He realized the importance of tracking income, paying taxes, and seeking professional help to avoid legal issues. By hiring experienced accountants and tax advisors, he was able to rectify his financial situation and ensure compliance with tax laws.
Tips for Managing Finances
Nischa offers practical advice for managing finances, including finding an accountant with experience in your field, seeking recommendations from others, and ensuring clear communication between accountants and tax advisors. She emphasizes the need for specialized expertise in tax planning and compliance, especially when relocating or dealing with complex financial structures. By working with professionals who understand your specific needs, you can optimize your financial management and minimize risks.
Financial Framework for Success
Nischa recommends allocating 50-60% of your take-home pay towards fixed needs like rent, groceries, and bills, and 20-30% towards discretionary spending on non-essential items. She also suggests setting aside a portion for investing to build wealth and secure financial stability in the long term. By following a structured approach to budgeting and saving, individuals can achieve financial goals and make informed decisions about their money.
Budgeting and Saving
Nischa recommends allocating a certain percentage of income towards different categories such as dining out, drinks, extra clothes, savings, and investments. She suggests saving a minimum of 10% of take-home pay and building an emergency fund equivalent to three to six months of living expenses. She also highlights the significance of setting aside one month's living costs as a buffer for unexpected expenses.
Investing
Nischa advises paying off high-interest debt before investing and starting with a three-month emergency fund. She stresses the importance of not waiting to have a fully funded emergency fund before beginning to invest. Shesuggests considering negotiation skills, selling skills, and embracing technology as essential skills for increasing income and financial success.
Property
When discussing buying versus renting property, Nischa recommends buying if planning to stay in the property for more than seven years. She suggests renting if there are better investment opportunities or if the property will not be held long-term. Shealso mentions the importance of considering the property's location and potential for appreciation when making a decision.
Cars
In terms of buying versus leasing a car, Nischa advises buying a second-hand car that is three to five years old to minimize depreciation costs. She recommends allocating 20-30% of take-home pay towards a car and emphasizes the importance of considering the total cost of ownership when deciding between buying and leasing.
Lifestyle Choices
Nischa shares her personal approach to lifestyle choices, such as owning social housing properties with guaranteed rent from the government. She prioritizes minimizing stress and avoiding unnecessary headaches when it comes to managing properties. Shealso discusses the importance of tracking finances and being mindful of spending habits to maintain financial stability.
Challenges and Lessons Learned:
Nischa reflects on past experiences, such as overspending and making impulsive decisions, and highlights the importance of tracking finances and being prepared for unexpected changes. She shares a personal anecdote about transitioning away from certain income sources to pursue a more fulfilling lifestyle, emphasizing the need to plan and adapt to financial changes effectively.
Managing Finances
Nischa emphasizes the importance of tracking expenses regularly to have a clear understanding of income and spending patterns. She suggests using apps like YNAB to track expenses and income. She shares her personal experience of analyzing her finances on a yearly basis, which helped her identify areas where she was overspending and where she could save more. She also highlights the significance of moving jobs to increase income and avoid stagnation in career growth. She mentions the impact of staying in the same job for too long, leading to lower lifetime earnings compared to those who switch jobs periodically.
Relationships and Money
The conversation delves into the dynamics of relationships and money. Nischa recommends having separate, joint, and future accounts to manage finances effectively as a couple. She suggests contributing to joint expenses based on a percentage of individual incomes rather than splitting costs equally. She believes in open communication about finances in relationships, including sharing information about income, debt, and spending habits. She acknowledges that money can be a sensitive topic in relationships but stresses the importance of transparency to avoid financial conflicts.
Earning Disparities in Relationships
The discussion touches on the impact of earning disparities in relationships. Nischa and the host explore scenarios where one partner earns significantly more than the other. They discuss how such situations can affect dynamics within the relationship and the importance of mutual respect and support. Nischa shares her perspective on being motivated by a partner's success rather than feeling emasculated or jealous. She highlights the value of being driven to improve oneself and work towards shared goals as a couple.
Financial Red Flags in Relationships
Nischa and the host discuss potential financial red flags in relationships, such as undisclosed sources of income or excessive spending without a clear source of funds. They emphasize the need for early conversations about financial matters to ensure alignment and transparency. The host shares his approach of observing social media activities and asking direct questions about a partner's occupation and financial situation to gauge compatibility and honesty.
Future Plans and YouTube Channel
Nischa shares her plans for the future, focusing on expanding her reach and content creation on her YouTube channel. She mentions having a team of five people to support her work and aims to explore different platforms like Instagram to diversify her content. She talks about her online course covering various financial topics like debt management, credit scores, and investing. She plans to continue creating informative content to help more people improve their financial literacy and make better financial decisions.
Related episodes
