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Dollars and Sense, Money

Dollars and Sense: A penny saved is a penny earned

Little Black Village Dollars and Sense

November 2012

Thought for the month, “A penny saved is a penny earned.”

In the column, I will share with you, from a layman’s perspective, ways to become debt “free”dom, by establishing a savings plan and paying off debt.  Some of the information I will present to you will come from the following sources: Money Magazine, Dave Ramsey, Suzy Orman, Kiplinger, and various other printed materials, just to name a few.

First things first, let’s start with the definition of saving:  A consistent pattern of putting away a certain amount of your income on a regular basis.  This means that you will set a goal and EVERY pay period, you will put this “goal” amount in your savings account.  For those who are spiritual, you are familiar with the term “tithe,” which means a tenth or 10%.  This is 10% of whatever you receive as income.  So let’s take a look at a few scenarios:

Net Income Amount Pay Frequency Tithe (10%) Savings Goal Amount Saved per Pay Period Yearly Amount Saved After 3 years After 5 years
$300.00 Bi-weekly $30.00 1% $3.00 $68.00 $204.00 $340.00
$300.00 Bi-weekly $30.00 5% $15.00 $390.00 $1,170.00 $1,950.00
$300.00 Bi-weekly $30.00 10% $30.00 $780.00 $2,340.00 $3,900.00
$300.00 Bi-weekly $30.00 15% $45.00 $1,170.00 $3,510.00 $5,850.00
$300.00 Bi-weekly $30.00 20% $60.00 $1,560.00 $4,680.00 $7,800.00

See how quickly your money grows over time, just by establishing a consistent pattern of putting away a portion of your income on a regular basis (and this is without interest!).  Personally, I like to deal with percentages when saving money.  This allows me to easily compute what the amount should be no matter how much I make.

Won’t you set a goal today, to save a percentage of your income each time you get paid.

Submitted by Thomas Thompson, Little Black Village contributing writer

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About Little Black Village

Little Black Village promotes higher education, personal development, and international exposure for African American youth. Little Black Village is a dedicated to discussing and exploring ways of keeping our black youth from dropping out of high school and encouraging them in seeking higher education and living up to their fullest potential. Little Black Village is also committed to making a difference in the black community by encouraging its members to share their voices through social media outlets, lead by example by taking an active role in mentoring a black youth, connecting families to educational resources and actively taking part of community services in and out of our communities.

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