Whatever You Do....Don't Save Money!

No, that's not a misprint. Even though falling interest rates are good when you desire to get a loan, they are bad for people with nest egg accounts.

In this economic system your best investment, the best topographic point to set your money is into paying off debts. Think of it as investment in your debt because that is exactly what you are doing.

If you set $1,000 into a bank nest egg account earning 2%, astatine the end of a twelvemonth you will have got got got $1,020.

If you carry a $1,000 balance on a credit card with a 19% interest rate, and you pay the minimum monthly payments, at the end of one twelvemonth you will have paid $190 in interest.

If you get $1,000 in a tax refund, small heritage or from somewhere else you now have a pick to make. You can earn 20 vaulting horses in a nest egg account or salvage $190 by paying off that credit card. Keep in head that your 20 vaulting horses is taxable income so you'll be left with $15 or so after taxes.

Do you need a nest egg account for emergencies? That nest egg account may be causing those emergencies! Think about it this way...

If you are earning money in a nest egg account at 2% and paying anything over 2% on your debts you are sliding backwards financially and you'll never get ahead. It's basic mathematics.

If you earn 20 vaulting horses for five old age in your nest egg account you'll have got $100. If you pay $190 in interest on your $1,000 credit card after five old age you will have got got paid $950 in interest charges.

In other words you have wasted, lost, burned or flushed $850 by having a nest egg account. ($950 - $100 = $850) OUCH!

What can you do? Wage off that credit card and usage that as your emergency fund. It's not the best manner to make it but it's break than earning 2% and paying anything over 2%.

So, while the stock market is on it's roller coaster and the economic system is challenged your best investment, barroom none, is your debts! Get them paid off!