counseling Step 1: Eliminate all credit card and consumer debt. This provides
an immediate "investment return" of 12% to 21%. Not having to pay that
interest cost each year is, in effect, the ssame as achieving the same rate of
return on any monies invested by you. Therefore, it is the surest and highest
form of investment return you can make.
counseling Step 2: Set aside one month's living expenses in the checking account.
This is in addition to the current month's living expenses that are in the checking
account, so at the beginning of any one month there would be two month's living
expenses already deposited in the checking account. This "investment"
is for flexibility.
counseling Step 3: Invest between two and six months' living expenses in an interest-bearing
money market fund account. This becomes the emergency fund and, in effect, your
own bank. As you need money to make a major purchase or have an unexpected major
expense or see an opportunity to save through purchasing now instead of later,
you can borrow from yourself out of this account rather than from a lending institution.
Once the money has been borrowed, it should, of course, be replaced. Step 2 and
3 provide you with flexibility so that you will be guarded against emergencies
that come up that might totally drain your resources.
counseling Step 4: Save in an interest-bearing account for major purchases. This
is the planned purchase of major items such as automobiles, furniture, and even
the downpayment on a home.Steps 1 through 4 should be done in sequence rather
than all at once. in other words, you do not go to Step 3 until you have accomplished
Step 2. By doing so, you eliminate the need to make a decision whenever an investment
alternative comes to you. If you have not already accomplish Steps 1 through 4,
you let the options go by.
your loan interest as well as your compounding interest with our calculators.