Setting Goals (2)

Don’t believe that these little fees can add up to much? Then look at this hypothetical but realistic example. We have Jane Q. Careless who

• Does not pay attention to her checkbook balance, so she bounces an average of one check a month. The bank charges $25 per bounced check and the typical merchant bounced check fee is $15. That’s (25 + 15) x 12 or $480 per year wasted.

• Withdraws $100 twice a month from an ATM that does not belong to her bank, incurring a 2.5% charge each time. That’s 100 x 2.5% x 24 equalling $60 a year down the drain.

• Maintains a $3,500 balance on a credit card that charges 21.99% interest. She pays $61.14 in interest each month for a yearly total of $769.

• Forgets to pay her credit card bill on time four times a year. The late fee charge is $35 (never mind the extra interest!) for $140 a year.

Are you ready for the result? All those unnecessary charges add up to close to $1,450 a year for Jane. I know that I have a lot of better things to do with that kind of money, and I’ll bet you do, too.

Second, you need to be a wise consumer of financial products and services. Pretty much everyone is going to have a checking account and one or more credit or debit cards. Many also have mortgages, home equity loans, investment accounts (whether stocks or mutual funds), one or more retirement accounts, consumer loans, and money market accounts. Knowing how to evaluate and compare these products can make a big difference in your financial picture.

Finally, you need to be savvy about how things work in the world of money. Many people make bad financial decisions, not because they are lazy or stupid, but because they just do not have the information necessary to make the right choices. Unfortunately, in our society financial education is almost always left up to chance, and most people enter the adult world poorly equipped to handle the financial challenges that lie ahead. This book provides the required information about the world of finance and the tools you need to make informed decisions.

Taken From : Manage Your Money and Investments with Microsoft Excel

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