Prev | Next | Contents

3.0 $500 SAVED = $1000 EARNED? - CONSUMER CULTURE ARTICLES, FROM SAVVY-DISCOUNTS.com NEWSLETTER

Lets say last Christmas your teenager was driving you crazy. She insisted that if someone didn't buy her a boom box she would just die.

So you played Santa and bought her just what she wanted for $199.95. Now you were a bit stretched so you put it on your credit card which already had a hefty balance. You decided to let it ride and pay the minimum each month.

How much did that $200 boom box REALLY cost you? I calculate about $400 and here's why.

COST OF BOOM BOX = 199.95
7% SALES TAX = 14.00
------------------------------------
TOTAL CHARGED = 213.95
INTEREST 18%-3YRS = 59.40
------------------------------------
TOTAL COST = 273.35

NOTE: Sales tax might be less or more depending on where you live. Also the interest you paid on your charge card could be less if your interest was lower and you paid it off quickly; almost double if you always paid the minimum and let it float for years.

BUT WAIT! THERE'S MORE! It's how much you have to earn in order to come up with $273.35.

Lets say you got a raise of $400.00 at work.

RAISE $400
Average Fed/State/FICA
32% -$128
------------------------------------
TOTAL EARNED AFTER TAXES = $272

Well what do you know? You still owe $1.35.

NOTE: I am estimating taxes at a low rate. It could be more.

Prev | Next | Contents