Has anyone ever told you that your savings account is losing money even though you are getting interest.Â The reason is inflation.Â Inflation is the rate at which the level of prices for goods and services is rising, and purchasing power is falling.Â This means as inflation rises, the price of goods and services rises.Â Have you noticed the price of gas is higher than it was 10 years ago?Â I remember gas being $1 a gallon.Â That price increase is due to inflation.Â Inflation occurs when the value of money falls, decreasing purchasing power.Â Â As inflation rises, every dollar that you have will buy you less.Â For example, a candy bar that cost $1 a year ago would cost $1.03 right now with an inflation rate of 3%.…
Have you ever heard of the Wall Street Journal Prime Rate? Do you know what it is? Are you affected at all by changes in the prime rate? The prime rate is a very important number for anyone that has certain types of loans. If the prime rate increases, then your rate increases. The same happens if the prime rate decreases. It’s important to understand at least the basics of the prime rate, as well as what can cause it to change.
What is the Prime Rate
The prime rate is a bank lending rate that is used as the index rate for different types of consumer debt.…
OK, the bank didnâ€™t really rob me.Â This is, however, how a lot of people feel these days.Â Have you looked at the rates that banks are offering on certificates of deposits?Â They are almost not even worth the gas it takes to drive to the bank.Â There are really only a few cases where CDâ€™s should be used.
Lets take a look at what CDâ€™s are offering.Â The national average 12-month CD rate is .31% APY.Â Thatâ€™s right, thirty-one hundredths of a percent.Â That equates to $31 for the year with $10,000 invested.Â Here is a quick chart of the national average CD rates.…