FINANCIAL MATH, SIMPLE MATHEMATICS AND EXAMPLES FOR YOUR PERSONAL FINANCES
How to Manage Your Bills, Checkbook and Credit Cards
Personal finance tips for simple management of your money, income and debt.
How to balance a checkbook and easily find mistakes. When to pay bills and avoid late fees, penalties and bad marks on your credit record. How to keep unplanned expenses from making you go into debt.
Consumer guide to frugal living - from previous newsletters © Copyright 1995-2000 by SAVVY-DISCOUNTS.com - All Rights Reserved
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8.0 FINANCIAL MATH, SIMPLE MATHEMATICS AND EXAMPLES FOR YOUR PERSONAL FINANCES
8.0.1 IMPORTANT PERSONAL FINANCE NUMBERS
People seem to hate math these days, but saving money involves calculations. Keep these figures in mind as you look for discounts.
== $1 saved = about $2 earned
When you get a $2 raise at work, your new income will be taxed at the highest tax rate for your income level. You will pay federal and state income tax, plus FICA. When you save $1, you are also saving on sales tax plus any credit card interest charges.
== How much is your time worth?
A simple (but very rough) method: divide your salary in thousands (before taxes) by five.
Example for a $30,000 salary:
30/5= $6 per hour.
This figure takes into account all your work related time and expenses such as commuting and work clothes. In this example, you should save at least $6 per hour (when you spend extra time clipping coupons or comparison shopping) to earn as much money as you would at work.
== Invest $1, borrow $1
$1 invested per year at 10% (in a stock mutual fund) = $17 saved in 10 years, $64 in 20 years.
$1 borrowed per year on a credit card at 18% (and allowed to float) = $28 owed in 10 years, $195 in 20 years.