Santanu Debnath is a passionate blogger who loves to write about personal finance and insurance at MoneyGyaan.com and everyday life hacks at MyDailyLifeTips.com. We recently spoke with Santanu about how to effectively manage both personal and business finances.

Tell us a little about yourself. Why did you decide to start a personal finance blog?
I am a software consultant by profession and a blogger by passion. I use my free time to share my knowledge and experiences on personal finance and life hacks.

Prudently managing personal finances is a basic practice which many of us don’t embrace. At the beginning of my career, I was not monitoring my expenses well and not at all thinking about savings. I had not even asked for perks about which I read on this 5 Hidden Work Perks You Should Consider Asking For post recently. Since the birth of my son, I have started realizing the importance of goals in life and why I should plan for them ahead of time. Gradually, I have realized that no matter how much money I am earning today, I must start saving for the future to achieve various life goals.

I had to face many crises in life due to bad financial planning, and I slowly realized that it would be a good idea to start writing a blog about personal finances. This would help others to start thinking about personal finances at the beginning of their career and prepare them for setting goals, amassing savings and engaging in other types of financial planning.

What aspects of a credit card are important to look for if the main goal is to avoid running up too much debt?
Using a credit card is a practical option in everyday life to allow us to avoid using cash for various transactions. Besides that, we can use various premium credit cards to get specific benefits like cash back on groceries, air miles while traveling on airlines, hotel booking discounts, etc. But it’s essential to know a few things about credit cards to avoid unnecessary debt:

  • Payment Due Date: You should know your credit card billing due date to avoid late payment.
  • Billing Cycle: If you know the billing cycle, then you can utilize the grace period well. Generally, there is a grace period of between 30 and 50 days, meaning that you can pay for something via a credit card and pay off that charge within 30-50 days without any interest.
  • Cash Withdrawal: Although credit cards have the ability for users to make cash withdrawals, you should utilize this perk only when no other option is available. That’s because the interest rate on a cash withdrawal is very high.
  • Minimum Due Amount: If you have money to pay the entire credit card bill, then you should do so, because the minimum due amount only prevents you from getting charged a late payment fee. The interest will be applied on the remaining balance, which will increase the amount owed even more.

Do you have any suggestions about how to encourage saving for retirement?
I think the only suggestion I have is to start saving early. It’s a simple rule of compounding which actually creates huge wealth in the long run. If you can start investing money on day one of your job, then there is a huge time frame to accumulate money for retirement. Many people think that they will save more when they get a higher salary. But they forget that their lifestyle and spending habits will also increase with a higher salary, and at the same time the duration of their career will reduce with every passing year.

Finish this sentence: “The biggest mistake that individuals make when starting their own businesses is…”
I think it’s not doing enough research. These days, many people want to start a new business; in fact, it has become a trend. The question becomes how many of them are able to sustain their business in the long run. So, I think a lack of research about the market and their competition is one of the biggest mistakes people are making before starting any small business.

Do you have any tips for small businesses on maintaining an adequate level of cash flow or cash on hand?
I think the key to success in any kind of business is by creating a trusted customer base by providing a quality product or service. To ensure adequate cash flow generation, you need to attract multiple sources of reliable revenue. As they say, “Don’t put all your eggs in the same basket.”

What is your approach to collecting money that is owed to you by a company or client?
I think the best way to do this is by setting up an invoice reminder service. But before agreeing to do business with someone, it’s important to set up terms pertaining to penalties or interest for late payment if someone fails to pay on time.

In the future, do you think it will be easier or more difficult for small businesses to emerge and flourish?
I think the market for small businesses will always be there even if larger businesses continue to give them tough competition. But I believe that a small business with a niche-specific service or product can deliver better quality to their customers than a larger company. The main reason is because of the additional time and attention they are able to give to their customers.

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