Tag: money

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Paid in Full

I haven’t seen an actual paper credit card statement for a long time because I’ve banked electronically for years, but I switched banks recently and they just sent me my first credit card statement on this new account.

I was really pleased to see a prominent section on the statement (mandated by government legislation) pointing out just how long this bill will take to pay off if I were only to pay the minimum amount. I think this is a great thing for developing financial literacy, as I’m always shocked at just how little some people know about money, especially credit, and how little they understand its impact.

On my credit card’s closing balance of $1898.20, it tells me that even if I spent nothing more on the card, and just paid the minimum required amount each month until it was paid off, it would take me 18 YEARS 6 MONTHS, and would accrue $4,348.57 in interest!

I hope we are teaching this stuff to kids at school, so they don’t fall into the “free money” thinking that so many adults I know still have.

My grandmother used to say “if you can’t afford to pay cash, you can’t afford it.” I think the more modern equivalent is “if you can’t afford to pay your credit card bill in full each month, you can’t afford it”

And yes, I always pay my credit card bill in full each month!

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The Cloud

He rolled his eyes and tried not to look distrustful. “I’m not sure about all this ‘cloud computing’ nonsense. It seems to me it’s just a passing fad and a huge security risk.  I’d never trust my important stuff there. I’d only put my files on my own computer. I like to know where they are so I can get to them when I need them.”

His friend responded with a wry grin. “Do you have a bank account?”, he asked.

The cloud sceptic replied, “Yes, of course I do.”

“Well… what do you think that is?   Do you think your pile of money is sitting in your very own little personal vault somewhere with your name on it?”, he smiled.

“No”, he continued, “your money is nothing more than a record in a computer database, a series of 0s and 1s kept on a server somewhere as a series of magnetic codes. You don’t know where your money is kept or what sort of machine it’s kept on, or who maintains it, or how often it’s backed up. You don’t know what operating system it uses or what type of database it is. You just know that when you go to the ATM, money comes out the slot. That’s all that matters. You don’t need to go to the same bank that you deposited at, and you don’t get back the exact same pieces of paper that you put into the account. All you know is that you put your stuff somewhere, and then you can access it from anywhere.”

That’s what the cloud is.