12/05/05 Financial Calculator

...The CNN/Money website has a debt calculator on it. Don't know if it is there all the time, but here's the link.
...I plugged some numbers in just to see how it worked. It was eye opening when it came to credit card debt in particular. I used an $8500 balance and 18% interest rate and adjusted the minimum payments to see how the numbers worked out.
...At $150 a month payments it would take 67 years and 9 months to pay off the debt, and the total interest paid would be over $38,000.
...At $200 a month it would take 27 years and 1 month to pay it off, and the total interest would be over $13,000.
...Anything below $140 a month or lower the calculator kicked out an error message saying the amount had to be higher because the debt would never be paid off.
...If you want to know what you have to do to be out of debt within a certain amount of time, the calculator handles that, too. For example, I asked what payments would be needed to pay off the debt in 5 years. That would require payments of $212.65 and total interest paid would drop to $4200+, quite a difference. Note that increasing the monthly payment from $200 to $213 drops the total interest paid by over $8000.
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...Questions: How much money have you earned over the course of your life? After counting up all your assets, how much of it do you have now? What happened to the rest of it? Do you know? These are important questions if you ever want to get a handle on your finances and take conrol of your financial life back from the bankers.
...More questions: How much money have you earned in the past month? How much of that do you have now? Where did the rest go? Do you know? Many debt consultants advise keeping track of every expenditure you make, even a pack of gum from the vending machine, for a month so you can accurately track where your money is going. It can be an eye opening experience.