Finance Quick Answers
Do you have any suggestions on how to save money?
While some people are worried about what the stock market is doing to their savings, others are worried because they aren't saving at all. To get started saving, "think small". Those 2 sodas a day you drink at $1 each could save you $520 a year. If that doesn't sound like much to you, consider depositing $520 in an account that averages 6% interest over time, you'd end up with nearly $21,300 in 30 years after taxes.
Don't buy sodas each day? Then set aside your pocket
change daily, even if it's only 50 cents. That's $180 a
year, and nearly $7,400 after it has earned interest for
30 years. Every day is a great day to start the savings
Few people get rich from their savings alone. But by
taking advantage of the "miracle" of compound interest
almost anyone can reach long-term financial goals. Some
key strategies are: 1) Pay off high-cost debt. The best
investment you can make is to pay off any consumer debt
with double-digit interest. 2) Buy a home and pay off
the mortgage before you retire. For most middle income
families, their home is their largest asset. Once the
mortgage is paid off, your housing expenses are lower,
you have an asset to borrow from in case of emergencies
and one that can be converted to cash through the sale
of the home.
Cynthia E. Crawford, Ph.D., Consumer & Family Economics Specialist, University of Missouri Extension
Last update: Tuesday, July 15, 2008