Turning your Check into Cold, Hard CashOnce you get your first paycheck, there are a ton of questions that may arise. Can you spend it all? Should you save it? If so, how much? Simply put, saving money is an important part of reaching your financial goals. When you save, your money grows. But saving is not always as easy as it sounds. Therefore, you need a written plan…or a budget! Here’s an example of a budget worksheet: Make your Money Work for you: The Magic of Compound Interest!Yes, you can make your money work for you! When you put money into a savings account at a bank, the bank pays you an interest for the opportunity to use your money while it is at the bank. The more you save and the longer you save, the more money you will earn in the long run. Consider the difference between John Dough and his friend Jane. Jane starts saving $100 a month at the age of 16 and stops adding money to the account at age 33. Meanwhile, John waits until the age of 33 to start saving, and puts aside $200 a month for the next 20 years. The chart below, assuming an interest rate of 8 percent, shows what John and Jane’s savings accounts would look like by the time they turn 50. As you can see, Jane deposited less than half of what John did, yet had a higher final balance. That’s the magic of compound interest! So start saving early! What to learn more? Click here for a schedule of upcoming classes in the Quincy area!
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