Citizen Minute
Okay, what we’re going to talk about is plain and simple as the title states. We’re not going to go into the finance of getting an apartment we’re just going to talk about the simple straight answer as to whether or not it would be a good idea to get one. Magic Formula: Income = Rent * 3
Situation 1: You are a Walmart cashier making $12 an hour. You work full-time 40 hours a week. You want to rent a cheap apartment that cost around $700 per month. Are you able to afford it? Bi-Weekly Paycheck: 80 hours x $12 = $960. Now take 25% off that from taxes and you are left with $720 every 2 weeks. Your monthly income after tax will be $1,440. Okay now lets look at this. Your monthly hard gain cash will be $1,440 and you want to spend $700 of that money on rent. That’s almost half of your money gone! That’s not even including groceries or utilities. At the end of the month you are left with $740 which is not including groceries, utilities or other expense for your self. Using the magic formula [$700 * 3 = $2,100] you should be making at least $2,100 each month if you want to pull living off of $700 in rent. At the moment you can only afford $480 in rent. [$480 * 3 = 1,440]
Situation 2: You are a financial analyst working at Goldman Sachs on a $100,000 salary. You want to rent an apartment in Manhattan for $2,000. C an you afford it? Let’s break this salary down. $100,000 Salary After Tax: $75,000 (Deduct 25%) Monthly Salary After TAX: $6,250 ($75,000 / 12) Magic Formula : $2,000 * 3 = $6,000! Yes YOU can afford it….. by a thin line…. Okay let me explain those calculations for those who are a bit slow. You work $6,250 a month after tax so that means you have $6,250 in your pocket! You take out $2,000 from your pocket to pay for the month’s rent and now you are left with $4,250 cash in your pocket. With that money you can pay for groceries and utilities. You can also live comfortable buying clothes going on dates and even saving! But remember that $2,000 is gone for good….. by the time the year ends you will have lost $24,000 hard cash on rent.
So is it smart to rent or should you be thinking about BUYING instead? Stay tune for the next article!
Well, I’m sure we all know what certificates of deposits are. They work basically like a savings account however, there is a minimum amount that you can deposit and after you deposit it, you won’t be able to touch it. If you touch the money before its time period, you will lose money. So let’s look at the interest rate and decide if CD’s are really worth it or not. Citibank / JP Morgan For a 1-Year CD from a deposit of below $10,000 to $1,000,000+, the interest rate you get stands the same from 0.25%. Now let’s look at this really carefully. 0.25% means 0.0025. Let’s say you have a CD of $10,000 at Citibank for 1 year. After that 1 year you will earn only $25! Is it worth not touching that $10,000 to get just $25 dollars at the end of the year? You decide for yourself. For 2-3 Years CD’s, you can earn around 0.40% - 0.50% interest rate at the end of each year. But is it still worth it? Let’s say you deposited $100,000 into CD’s for 3 years for 0.50%. At the end of the first year you will earn $500 interest on that $100,000. The second year interest will be $100,500 * 0.0050 which will earn you $502.5 and the third year interest will be $505. The total interest you will earn in 3 years will be $1507.5. Now let’s look at this number real carefully and compare it. Would YOU be willing to put aside $100,000 for 3 years without touching or using it, all just for $1507.5? That’s up to you to decide :)
You might be wondering where it all went. Well the answer to your question is really simple indeed. Your spending way above your limits! Having no money in your wallet could affect you in many ways you could never imagine.
You then recalled on how you wasted your money, spending it on useless things for example, “lottery tickets, playing cards, smoking and drinking.”
Never spend your money before you have it. -Thomas Jefferson
This quote by “Thomas Jefferson” has a strong meaning behind it.Spending your money before having it is like you turning in a test before answering it. Well, this takes us back to the “Real Life Situation”. After realizing you had no money left after ordering the pizza and soda, what is the common mistakes someone would make? Borrowing money! Yes, borrowing money is one of the biggest problem teens are facing currently. Many teenagers are borrowing money from their friends which can lead them into huge amount of debts. Many people lose their friendship over money. Why? Because their friends don’t pay them the money back! I have seen it so many times, people borrowing a lot of money, having a lot of stress finding out ways to pay it off. This is what it means to be in debt. Debt is owing money to a certain person or place. No one wants to be in debt because being in debt leads to stress and stress leads to lack of performance in school. You don’t want to be a victim of him!
“A Penny Saved is a Penny Earned” This quote has been tossed around ages, Benjamin Franklin is attributed as the first to say it. There are many ways to save money, today we will discuss ways to save money by shopping online compared to giant retailers. Large retail stores often sell items at MSRP - Manufacturer suggested retail price, there are several ways to look at their pricing schematics.
Warehouse Price + Expenses + Profit = MSRP
For Example..HDTV 60”
$1799.99 + $100 + 100 = $1999.99 MSRP
We can see that it’s it’s much cheaper to buy straight from online because they give you the better discount on the product. Some online site gives you 5%-10% cash back which could save you tons of money if you are a serious shopper. Also take advantage of coupons when shopping. Coupons could save you the most money while buying items. Have a bunch of coupons from macys would get you an item for free! it’s as simple as that.
Always buy on sales if you want to save money. Buying on sales is what smart people do. Items are usually 10%-70% off when they are on sales and you can buy and stock up for a while.
