Monthly Archives: November 2008

Paid that Visa Yet ??

 Save Money or Pay Down Debt ??

 

It’s Friday and you just got paid! After sending off that last check to pay for necessities; food, car payment, rent, etc., you have $100 left. What should you do with it?  Save it or pay down debt?  It’s hard to give a one size fits all answer to that question. Everyone’s individual situations, goals and needs are different and questions need to be answered. First, what kind of debt do you have- mortgage loan, student loans, credit cards? Are you planning to make some large purchases such as a house or car? What are your investment goals/needs? For the next few weeks we will focus on ideas to get your savings, debt, and investing plan in order. First, who’s getting the most return on your savings account?

 

It’s hard, hard, hard to speak against saving money in any debate, except when you have credit cards charging you 18% interest per month, and you are digging yourself deeper and deeper into a hole because you can only pay the minimum. When you put money in a savings account or a CD (certificate of deposit), and the bank pays you a paltry 2% to 3% interest, they are actually earning much more.  The bank uses Your money to lend to businesses, for individual loans, and mortgages, at much higher rates. The banks are making more money than you off your own savings – what number is that on your goals list??!! If helping the bank make money is not on your list, let’s see what to do with that $100.

 

Savings Account versus Credit Card

 

You have $100  to save OR  $100 to pay down your debt.

 

Credit Card Balance = $5000

Interest Rate = 18%

Minimum Payment = 3% or $150 a month

 

  • Making the minimum payment of $150, it will take you 226 months to pay off this credit card AND you will pay $4799.06  just in interest.

 

  • If you take that extra $100, and increase your monthly payment to $250, you will pay off that same credit card in only 24 months and pay $989.13 in interest. That is a savings of 202 months and over $3800 dollars.

 

  • If you put that $100 into a savings account at 4.50% interest, in the same 24 months it would take you to pay off that credit card, you would have saved only $2615.80.  (at 4.50%  HSBC’s  online savings account pays the highest interest rate in the United States)

Is it better for you to save the $100 or dig yourself out of debt? We all have different lives and different goals, but the perfect plan for you has to fit your individual lifestyle and needs. These are Your goals, Your dreams, Your needs; can you afford to lend money to the bank right now??? 

Advertisements

The Obama Difference

November 4, 2008 is a day that changed my life; a day that I will always remember.  No I am not old enough to have experienced sitting at the back of the bus, not being able to eat at the table of a restaurant, or even faced barriers to exercise my right to vote.  My first time being eligible to vote was for G. W. Bush’s first run, and I have experienced 8 years of some of the worst leadership in history. I awoke several times this night wondering if I had dreamed it all.  Was it really that clear? Were they really going to be fair?  Would no one try to come back on November 5th and take it all away with some new rule? Things are going to be different.  They have to be different.  Barack Obama’s campaign and victory has shown us that anything is possible, our dreams are never too big, and the sky is truly the limit. He has shown us that we should never stop, we should turn our obstacles into opportunities. It should be an embarrassment for the color crutch excuse to drip off any of our lips. Our steadfastness should push us to finish our education and creativity our crutch as we build businesses with no money and prayer to remember that every barrier is breakable.

I am that hopeful entrepreneur always wanting to risk everything for my shot.  I wake every morning with the thought that I will make my place, my space, create and develop this dream, my dream.  But today is different; it’s extraordinary, special, magnificent, and glorious.  This is not only one of the proudest and happiest days of my life; I woke up this morning even more solidified in my resolve to follow my dreams, no matter how long or how far they take me.  That’s the difference Obama made to me.