Common ¢ents - May 6 edition
In this week's issue, we continue our "10 reasons you're not rich" pointers, suggest you take a spending quiz, and share a website that you can use to start (or continue) teaching your children about money.
We didn't have aCommon ¢ents question this week. If you have a question about money you'd like answered - submit it here - and we'll get you a response next week.
10 Reasons You're Not Rich
Reason #3: You Carry Too Much Debt
Americans have $846.9 billion in credit card debt alone. That’s $7,050 per household, according to NerdWallet.com, a Web site that analyzes financial products and data. If you’re only making minimum monthly payments on $7,050, it’ll take 28 years and cost you $10,663 in interest before you’re debt-free, assuming a 15 percent interest rate. And that only holds true if you don’t make any additional charges.
Some debts can lead to financial success -- a mortgage to purchase real estate, a credit line to start a business or a student loan to fund a college education -- but a high-interest credit card balance usually doesn’t. Pay down credit cards with the steepest rates as quickly as possible. Putting $250 per month toward that same $7,050 debt will retire it in three years and save you about $9,000 in interest versus making minimum payments.
Reason #4: You Pay Too Many Fees
Late fees, banking fees, credit-card fees -- the amounts might seem insignificant when taken individually. After all, an overdue library book or Redbox DVD might only run you a dollar. But if you’re regularly paying penalties and fees, these charges can quickly eat a hole in your budget. Consider this: The average bank overdraft fee is $32.20, according to Bankrate.com, and the average charge for going outside your ATM network is $4.13. Late-payment penalties for credit cards can climb as high as $35.
So how do you avoid pesky fees? Read the fine print so you understand fee rules, and stay organized so you avoid breaching those rules. With the extra cash, you can pay down debt or boost your savings.
Take This Spending Quiz
The first step to better handling your money is understanding what kind of spender you are - and being honest about where your problems are, so you can address them. Take the quiz here. Your Communication Director is an Avoider - she puts off making money decisions. What kind of spender are you?
Teaching Kids About Money
One of the most important things you can do for a child in your life is to start teaching them money management skills at an early age. They're not too young to learn. When we think of PBS and kids, our thoughts most likely go to Sesame Street and Super Why. But they've also got a wonderful website with great information, games, videos and more that deal with money issues. Next time your elementary-school-age child sits at the computer or asks you to get on the computer, why not sit with them and go through some of the things on this site: