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This month’s post is not about the beach, but it may help you get to your dream of owning a beach or lake house quicker.

Have you ever opened your credit card bill and said: Wow, my balance does not seem to be moving? Well, here is why.

Let’s say your Citibank credit card balance is $2000 with a 2% minimum monthly payment, and a 21% Annual Percentage Rate (APR).

To calculate your Minimum Monthly Payment: Take the $2000 balance and multiply it by your minimum monthly payment percentage due ($2000 x .02 = $40), which equates to $40.

To calculate your Monthly Percentage Rate: Take the APR and divide it by 12 (12 symbolizes the number of months in a calendar year). So, in this case, we have a 21% APR. So, divide (21/12=1.75%) to determine the minimum monthly percentage rate of your balance due each month. In this scenario, the monthly percentage rate is 1.75 of the $2000 balance.

Now, let’s calculate the Monthly Interest Payment. Take the credit card balance and multiply it by your Monthly Percentage Rate. For example, $2000 x 1.75% (.0175) equates to $35.00. So, the amount of interest being added to the credit card balance this month is $35.00.

Finally, let’s see how much the credit card balance decreases this month. So, a credit card payment of $ 40 is mailed to Citibank. Citibank takes the $40 payment and charges you $35 in interest fees and applies $5 toward your balance. As one can see, the $40 payment only reduces the original balance of $2000 to $1995. It will take you eons to just pay off $1900.00 because Citibank and all your other cards will take their cut first, and then apply the remainder toward your balance.

Looks like it might take you a very long time to purchase that dream cottage on the beach unless you stop spending money you do not have. Credit cards are great if you pay the entire balance every month, pay an extra $50 to $100 toward the principal amount or pay bi-monthly to cut interest cost—some institutions need to be informed that the extra money goes towards principal only. If not, use cash. Become the banker and start stashing those interest payments in an account for that dream beach cottage.

Seas the Day!

It’s a beach thang!

LOTS of people make a big deal about New Year’s Resolutions…but not me! 2020 finds me taking a new perspective on an old habit. This year, I am posting my resolutions during the first week of February versus the first day of January.

Most people make resolutions they have no intention of sticking to because they make the wrong resolutions. Losing 50 pounds when you have no intention of working out, eating healthy or giving up alcohol is a bust from the start.

So, what’s the solution? Take baby steps and commit to one or two major changes to institute in your life.  

Here are two of my favorite resolutions for this year: gratitude and forgiveness. Adopt a habit of being grateful for everything in your life. Express gratitude for the people, objects, and things in your life, and discover how blessed you truly are on this realm. Second, be the bigger person and forgive all the people that have truly disappointed you in the past. Phone or write that individual and let them know exactly how they disappointed you and release it back into the universe. You never know, some individuals may not have realized that they offended you and attempt to right the wrong. Now the ball is in your court. Do what you wish with it but release the pain and anger. If two resolutions are too much, just pick one! Neither way, as Nike’s tagline goes, “Just Do It!”

Now, write those resolutions in a letter to yourself and file it away. At the close of 2020, open it and see how much you have accomplished. I bet it will be further than those old resolutions for sure.

Be well!