No, Not Just Another Make Money Online Post

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You want to know how to make more money, don’t you? Sure you do. You and everyone else on the Internet has read at least one article or blog post on the topic of making money online. Heck, that’s what one of my online businesses is all about – coaching people to do just that – make money online. But saving money is just as important as making money. Both making it and saving it means more of it in your wallet or bank account, and that’s really the ultimate goal. (Shush, I know you’re ultimate goal is really to SPEND it, but let’s pretend otherwise, ok?)

Unfortunately, saving money just sounds hard to do, and it sounds like punishment rather than reward. The key however, in turning that perception around is to be able to visualize the rewards gained by saving. Sure, we all know that if we pay more than the minimum payment on a credit card bill, for example, then we’ll pay off the balance sooner … blah, blah, blah. Sometimes, however, “knowing that”, and visualizing the end results are the difference between “knowing it” and “GETTING IT!”.

Let’s take a clear example. Let’s say you only have one credit card. The balance on it is $3900 with a high annual rate of 23.24% and a current monthly minimum payment amount of $115.

If you pay the minimum each month, you’ll have this balance paid off by April, 2014 – 4 1/2 years from now.

If you pay $320/month instead of $115/month, you’ll have this balance paid off by November, 2010 – a little more than a year from now.

That’s a significant difference. Sure, it may be tough to squeeze the extra $205/month into an already tight, tight budget, but if you can manage it, it will be well worth it.

If you have multiple credit cards, it can be difficult to know which ones you should pay off first – and how much extra to apply to each. I recommend using a spreadsheet calculator that handles all the math for you. I use Vertex’s free debt reduction spreadsheet. It comes with versions for both Excel and OpenOffice in the same download. (Also worth noting, the spreadsheet has no macros and no installation involved. Just straightforward math calculations).

This calculator lets you try out different debt reduction strategies, including the debt snowball effect (paying the lowest balance first) and the debt avalanche effect (highest interest first). All you do is enter the debt info (balance, rate, minimum payment) for each creditor, decide how much extra you can squeeze out of your budget each month, and then choose one of the reduction strategies to see which is best for you. If you use this calculator, make sure you enter the current date into the Balance Date cell at the top of the worksheet, or the dates will be skewed.

Here’s a screenshot as an example.

Now it’s time to extend the “vision”. Go download another of Vertex’s spreadsheet calculators – this time, the Simple Savings Interest Calculator. Let’s say you’ve finished paying off your debts, and now you have that extra $200/month with no bills to apply it to. What would happen if you were to put that $200/month into a savings plan? Here’s a sample output using the calculator of what would happen after 10 years using one example scenario.

$29 THOUSAND DOLLARS! Wow. Kinda leaves me speechless.

Ok, I’m not speechless for long. You see, it’s not that we don’t KNOW these things. It’s just that until we really SEE IT in black and white, right there in front of us, can we really GET IT.

I encourage you to download some of Vertex’s calculators and play around with different scenarios. They have tons of spreadsheets to choose from, so there should be some there for everyone’s personal situation. They are free, easy, work well, and can be real eye-openers.

So before you read another article or blog post on how to make more money online, I recommend you find ways to save money first. It may seem like punishment at first, but if you really SEE IT laid out in front of you, you can see the rewards as well.

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Tags: bank account, Online Post You want


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