Ep 16A: Let's talk about Money: Finance Basics to buying your First House- Sravana & Sai Kancharla
Updated: Apr 2, 2022
Hello, This is Sirisha, welcome to my podcast! Today's podcast is a guest Interview with Shravana & Sai Kancharla, a sister and brother who came to the US to study and have just bought their first house. Listen to this podcast (2 episodes) as we talk about settling down into college life, learning about budgeting, credit cards, buying your first house, starting your first job, career advice and some important thoughts you should be thinking about.
The topic of Money can be intimidating and appear overly complicated. The social norms can make it a taboo subject, giving us few avenues to gather knowledge and drive us to be Financially Independent.
Many surveys show that men manage their finances more compared to women. This can compound the financial impact over time and leave a lot of money on the table.
So lets open pandora’s box, debunk myths and get comfortable talking about money with family, friends and financial professionals. Lets forge ahead and own our financial journey so we may carve our own path and soar ahead..
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Below is a transcript of the episode, slightly modified for reading.
PODCAST TRANSCRIPT OVERVIEW
[00:50] - Meet Sravana & Sai Kancharla [Jump to section]
[03:04] - 18 yrs old...6500 miles from home...Budgeting [Jump to section]
[06:06] - First Bank Account, Paying credit card bills [Jump to section]
[08:52] - Credit History, Credit Score [Jump to section]
[10:29] - Buying her first house...Care abouts [Jump to section]
[14:06] - Food for thought. Episode takeaways [Jump to section]
PODCAST DETAILED TRANSCRIPT
Meet Sravana & Sai Kancharla [00:50]
Hello everyone. This is Sirisha, and we are kicking off a new season called "Let's talk about Money." I have a brother and sister, Sravana Kancharla and Sai Kancharla joining us today. It's very exciting because I've seen them both, when they came first time to the US and seen them grow into young adults and different phases of their life.
I am looking forward to today's conversations as we talk about money and just finding out about their journeys. Let's get started. So Sravana, why don't you start with telling me where you're both originally from, where did you go to school, how did you come here, what made you come to the U S and just what you're doing currently?
I grew up in Hyderabad India,a very long time ago. I went to school in Fiji. That was third grade until I finished high school and then I got my bachelor's from a University in Hyderabad, India, and then I decided to move to the US for grad school. This was for hardware engineering and I just chose the U S because my brother was here and that was the easiest place to pick and he was in Dallas, so I moved to Dallas and I graduated, grad school about 2016. I've been working in the hardware industry since, so it's been about a good six years working now.
It's good to have family when you come to a new place, and you live still in Texas.
It definitely helps to have family. I don't know how I'd have survived if I didn't have family, I would have figured things out, but it definitely made things easier and yes, we both went to school in Dallas, but now we both live in Austin, so we're still in Texas.
Sai, How about you?
The earliest schooling days is similar to Sravana. Only difference is right after high school, I came to the United States, so I came straight to Dallas, Texas. I was one month shy from turning 18. When I came here I did two years in community college and then I did my bachelor's at UTD. They had a transfer program going on, so I did my bachelor's in Electrical, and then I worked for a few years as a database developer, and then after working, I did my masters in Georgia, in computer science. Right after that, I moved to in Austin in 2018. Now I work in the semiconductor industry, I do technical documentation.
18 yrs old...6500 miles from home...Budgeting [03:04]
Before 18 leaving home and coming far away, that is challenging, so how was that experience?
It was good, cause when we came here, we came straight to a family friend's place. She picked us up from the airport. She helped us get our first apartment, the campus apartments. She helped us move in, go to Ikea Walmart, so she gave us introduction to things, to places. I came here with a close friend from high school, so it was good to have a companion, but I think without somebody to show us the ropes, we would probably be lost at 18 because our parents did most of everything for us.
They (family friend) helped us navigate a bit of school classes and we'd go spend all our holidays at their place. Could have been difficult, but it was an easy transition just because we had family friends help us through it.
That's when we first met. So what did you have to learn? Like you said your parents took care of anything. So since we are talking about, finances and money today, what did you know before? What knowledge did you gain as a kid at home growing up about money or bank accounts or stuff? What did your parents tell you as they send you off on a plane and said here, watch this ,do this, o r it was any advice like that.
They did, they sat me and our friend together, we were family friends. We did have the talk about money. It was mostly budgeting, making a budget for yourself. What do you spend on, what not to spend on, what's luxuries and what's necessities. So they gave us the talk.
We had help getting a bank account. Our family friend had to, sign on this, so that was the first bank account. This only lasted for six months, but we did send our parents an excel sheet with what we spent . It wasn't too hard because we were living on campus. The rent was deducted, which was, I believe $400 a month. Both of us had a budget of $250 for Walmart and things, but didn't have a car, we didn't have any additional expenses, we were cooking at home.
When we got here that slowly increased as we made friends and, you start going out to eat, but we didn't know much, we learned on the way. Budgeting was the one thing our parents put into our head that you need to know how much you're getting and that we had to tell them then what we're spending on because when it runs low, you have to ask them to send more. , we were pretty good at budgeting the first few years.
Two things that I thought were interesting. So you had to send an Excel tracking sheet for six months. What did you find to be the most interesting part of doing that exercise?
We used to keep receipts. It was not too hard and we didn't think much about it. After six months it became tedious tracking, cause now we got used to the place. Now expenses was eating outside, shopping, things like clothes, shoes not that our parents minded, but at that point it was more an estimate of what we spent rather than tracking.
How did the cooking go the first time, did you cook back home or did you learn ?
No, we learned here. It was an experiment, we started out with a lot of frozen food, patties, buns, frozen vegetables. It was much easier, everything was cut, so we learned how to cook.
First Bank Account, Paying credit card bills [06:06]
What about you? What was your first experience when you came here?
My first real meddling with finances was when I got my first job after I graduated from my Bachelor's. So I remember setting up my bank account because they're like, oh, we need a routing account before your first day of work. I don't know anything about this, I took my dad with me and we went to the bank that he uses and we just opened an account. I was getting paid, but I wasn't doing anything with it because I was staying home. I didn't have any bills, my spending money, my parents would give me, so I really wasn't doing anything with my finances, even when I got my first job.
So my first real foray into actually doing my own finances and looking at my own numbers, was when I came to grad school. That was interesting because. I realized that I spent a lot more than I thought, on just the basics of every day living like rent, phone bills and internet and things like that add up t a lot. .So I did have to learn by myself to deal with that, even things like credit card bills, like paying it on time, which was just things that we'd never learned. And like you said, it's interesting that they don't teach you in school because everyone eventually has to do it, but you have to just learn by yourself at least that's what happened to me, was just learning to do it by myself.
When I came here for graduate school, same thing, I got a stipend I ate out a lot. I didn't do a whole lot of cooking, which didn't help finances probably. I had rent and it wasn't too much and realizing one day when I went to the bank statement that it was running pretty low and I'm like, what happened then? When you go back and look, 'oh my gosh, what was I spending it on', and it's not like I had very many expenses. It probably was food and maybe some little stuff and things, but it does deplete pretty quickly.
But eating out adds up.
Then when you get your first credit card that you have to pay your statement on time. I think that is one of the hardest, you get a credit card and there's the want and the need and how to spend it. Now you have online payment that time it was paper bills and stamps, you had to write the check, put it in the mail. Have you ever written a check?
I have, after I came here, I remember having to order a check book it was for the house down payment, you need the checkbook and I didn't have a checkbook and I ordered a checkbook, but I ordered the wrong kind of checkbook.
So I had order another one because it was so new to me. So I think it was 29, 28 when I ordered my first checkbook.
You bought a house and we'll come to that part of the conversation. You got a credit card, I'm assuming through college or university.
I got my credit card, I think the day after I landed, it was actually my brother who took me to the bank and I got my debit and my credit card the same day. I think it was Sai actually told me the ropes of how to like, pay your bill. I still think I paid my first statement late, but I learned my lesson.
Credit History, Credit Score [08:52]
When we got her bank account, we were insistent on getting a credit card just because me and my friends we got our credit cards very late.
When I say late, we started building our credit, five years after we moved to America, we were running on debit cards before that. And then as we grew older we realized, okay, we need credit because when we first got our phone somebody else co signed, so we didn't need credit report, but as we started moving from on-campus to off-campus housing, they are asking for credit reports and we didn't have any of this. I came in 2008, I applied for my first credit card in 2013. So she came in 2014 we were like, the first thing you need to do is get a credit card and start building a credit score. It didn't hurt me too much just because I hadn't started working. I didn't really have any income coming in, but I think, most people don't know when they get here that, credit scores are important, maintaining them and, getting a credit card.
So it was more about building the credit history. I'm glad you brought that up Sai, it's not something we realize. From a credit history standpoint, do you monitor your credit scores, do you track it?
So for me I have credit karma but now I also have capital one and bank of America accounts, so they also provide me a monthly credit history report. For the longest time I've always had good credit history, but it's become more important for me to build it the last, one and a half year, just because I'm trying to buy a home myself, and I'd like it to be as high as possible when I apply for a home loan.
Same. Every time I pay my credit card bill, I go check my credit history, my credit score, because the app just allows you to do it on the spot. It's something that I've been monitoring pretty closely since I've gotten a credit card,
Buying her first house...Care abouts [10:29]
That's really good and Congratulations. You just bought your first house. So how was that process? What made you buy the house? What were you thinking? When were you ready for that?
Thank you. Sai and I had been staying in an apartment together for a few years and then it was also COVID. So we were holed up in one apartment for awhile. The biggest factor was just we were thinking of getting a property at some point I think we were just saying that we wanted to get one, but we don't really like have a timeline. Then during COVID the property prices in Austin were climbing up pretty crazy. The talk was that the prices were just going to go high and stay there, or just skyrocket even more.
So we thought that was just a good time to try and get in now and beat the market, in a way. So it took us quite awhile to find a house. And in fact, we found one, there was nothing to look at, we saw a model house and we decided, the same day and we pay not really a down payment, but like a assurance that what you're going to go through with the house.
Exciting. So how was the house building, house buying process itself?
The finding of a house process was stressful, just because of how the market was going in terms of like pricing and area But once we found a house and we, decided on it, the building of the house is actually pretty smooth. It was actually easier than we thought. The builders just did a good job of communicating and they actually met the deadlines on time, even with the know pandemic going. We actually got our house, like a week or two earlier than what they promise. So after paying it was an easy process and it was fun.
I've seen pictures, it's a gorgeous house. So let's walk through the house buying process. Did you buy the house together?
No, we didn't, I was the one who bought the house.
There was one particular reason you chose to buy it separately, can you just go into that.
So initially we did want to buy together just because we thought it made more sense. But then again, when we were finding out more the process of buying a house and interest rates and things like that, one of the things we found out was first time home buyers get an incentive. And the incentive is that , they can get to pick a lower down payment just because they're first time homeowners. If both of us signed on the house and since we were both first time home buyers both was, would have lost that privilege. So it just made sense for one of us to buy the house, so I bought the house and then if Sai ever decides to buy a house by himself, he still can get that privilege. First time home buyers can pay less than 20% down payment of the house, so that was pretty much the main decision.
I was planning to buy a house to pretty close to Sravana's timeline and down payment was a reason, you can pay under 20%, but the second thing that's happening is, a lot of these builders, they don't want investors to come in and buy homes. So if I already own a home and I'm trying to buy a second home, I'm classified as an investor. A lot of new constructions don't want investors, they want resident owners, people who will stay in that home for at least 12 months.
You guys learned a lot through this whole process.
They'd ask us questions, but we were not ready to buy a home. It's something we learned. We had a realtor walk us through the process, so that really helped.
The phases of the building, the inspections her having contacts, who she's used to come and do inspections and any fixes. It was great that we had a realtor walk us through it too, we did our reading on the side, but just having a realtor helped at that point.
A lot of learning on the job completely.
Food for thought. Episode takeaways [14:06]
As we wrap up this first part of the interview with Sravana and Sai Kancharla, on 'Let's talk about Money,' the key takeaways, the food for thought for this episode is,
Spend less than you earn, budget so you save some money for either an opportunity that comes your way or for an emergency.
Get a credit card because it's very important to start building a credit history. When you get a credit card, make sure you pay it on time and at full. Keep track of your credit history and credit score, because those are critical points when you're trying to get a loan or a mortgage on any investment in the future.
If you're looking at buying a house, a realtor might enable that process and if you're a first time home buyer, look into the incentives that are available to you.
All the best as you set off on your financial journey.
Tune into listen to part two of this interview, as we talk about career development. retirement ,investment and other key topics.
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Guest: Sravana Kancharla
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