Coffee heat rising


Well, somebody thinks the economy is about to improve, big-time!

On the other hand, somebody else thinks (with questionable credibility) that whatever gains we make will be lost to soaring healthcare premiums as insurance companies gouge customers in the wake of national health-care reform.

Enough people think happy days are here again to push the Dow over 10,000.

But certain skeptics think the Dow is manifesting a bubble, and that we can expect swings back and forth around that honored threshold for some years to come.

The Fed allegedly believes the recession is over, though observers see “signals” from Bernanke that the Federal Reserve will keep interest rates low for the foreseeable future. That notwithstanding, others are convinced rates will have to rise in 2010 as inflationary pressures come into play.

Government scientists think my part of the country will be hotter than normal next summer (and for most of 2010, come to think of it).

Others who style themselves as experts assure us that any such phenomena have nothing to do with the free enterprise-threatening hooey that is global warming.

If we imagine any of these things might come true, can we make it happen by thinking about it hard enough? Anything’s possible…

...Your fairy is made of most beautiful things.
...Your fairy is made of most beautiful things.

Image: Sophie Anderson Tucker, Take the Fair Face of Woman. Public Domain. Wikipedia Commons.

How long will it take to pay off that credit-card debt?

In debt on the cards? Or are you contemplating a big purchase and planning to put it on your credit card? Here’s a way to figure out how long it will take to pay off the balance making only the minimum payment each month…and gain some insight into credit-card debt.

Once the calculator has given you the bad news about the minimum-payment strategy, it delivers some more options.

Entering $2,000 as an outstanding debt at 17 percent, I learned it would take 17 years to pay it off, at a rate of $40 a month. By the time the two grand was finally erased from my record, I would have spent $3,181 in interest.  So, a swell-elegant $2,000 sofa (for example) would end up costing me $5,181, and the thing would be ready for Goodwill before it was paid for.

Okay, let’s say you can afford payments of more than forty bucks. The results page lets you explore what would happen if you paid more toward principal. Enter $100 a month, and you see you could pay off the card in 24 months, assuming you make no more charges. You’ll pay $369 in interest for the privilege, but at least the sofa will still be standing by the time you’ve paid for it.

You determine to accelerate your debt pay-off plan. How much will you have to pay per month to zero out this card in a year? Enter the number of years you hope it will take you to get rid of the debt, and the monthly payment comes up. Let’s say we want to pay for the sofa in one year: monthly payments would be $183, and in that year $189 in interest would accrue.

Eye-opening, isn’t it?

The extreme joy of deferred purchasing

The moral of the story: some English-major math reveals that if you simply delayed purchasing the sofa until you had $2,000 in the bank, you’d only have to put $166.66 a month aside to be able to buy it in a year.

At $183 a month, you could have the cash to plunk down in 11 months. But if $40 was really all you could afford, then you could buy the sofa outright after just four years.

And it wouldn’t cost you anything in interest. Matter of fact, if you put the swell-elegant sofa fund in a high-interest savings account, your purchase price would earn a few pennies for you. And a penny saved is a penny earned.

Image by Channel R, Creative Commons Attribution ShareAlike 3.0, Wikipedia Commons