Whatever You Do....Dont Save Money!

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

In this economy your best investment, the best place to put your money is into paying off debts. Think of it as investing in your debt because that is exactly what you are doing.

If you put $1,000 into a bank savings account earning 2%, at the end of a year you will have $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 year you will have paid $190 in interest.

If you get $1,000 in a tax refund, small inheritance or from somewhere else you now have a choice to make. You can earn 20 bucks in a savings account or save $190 by paying off that credit card. Keep in mind that your 20 bucks is taxable income so you'll be left with $15 or so after taxes.

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

If you are earning money in a savings 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 bucks for five years in your savings account you'll have $100. If you pay $190 in interest on your $1,000 credit card after five years you will have paid $950 in interest charges.

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

What can you do? Pay off that credit card and use that as your emergency fund. It's not the best way to do it but it's better than earning 2% and paying anything over 2%.

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

Leo J. Quinn, Jr. owner of http://www.LeoQuinn.com is a financial educator from the Albany, NY area. For over eight years he has been helping thousands of people get control of their finances and get out of debt in a fraction of the normal time. He has a special offer for readers of this newsletter at http://www.1shoppingcart.com/app/adt rack.asp?AdID=132551

IVA: Individual Voluntary Arrangement

What Is an IVAThe IVA (Individual Voluntary Arrangement) was introduced... Read More

Corporate Debt Management ? Perspective on the Why

Entrepreneurs have a tough time in their formative years. They... Read More

Your Secret Weapon... A Budget

For many, the word 'budget' immediately sends shivers down the... Read More

A History of Money and Banking Secrets That Banks Dont Want Published

A History of Money and TradeTo start with a history... Read More

Credit Counseling or Bankruptcy: Which is Best for You?

People often get to a place where they simply can't... Read More

5 Ways to Get Out of Debt

It has been said that everyday more and more people... Read More

Credit Card Debt Freedom is Possible

Credit card debt have you drowning financially? You're not alone.... Read More

Credit Card Debt: How to Get Rid of It

This method is simple, but requires some discipline.First, you have... Read More

Bankruptcy: What the New Law Means to You

On April 20 of this year, President Bush signed a... Read More

Debt is The Master of Souls

Wholeness requires separation. In order for you to experience yourself... Read More