Articles

Clear personal finance articles that explain each calculation and help you make better decisions with your money.

• APR vs. interest rate, what is the difference?The interest rate sets your payment. The APR adds certain fees so you can compare offers. Here is what each one means and when to use it.
• Emergency fund, how much to save and where to keep itAn emergency fund covers surprises without new debt. How to work out what you need, where to keep it and how to build it step by step.
• Fixed or adjustable-rate mortgage, how to chooseHow fixed and adjustable-rate mortgages differ, and how to check with real numbers whether you could handle a higher payment.
• How compound interest works, and why time matters mostCompound interest means your interest earns interest of its own. Here is how it works, with real numbers, and what actually makes it grow.
• How loan amortization worksWhy your early mortgage payments go mostly to interest, how the split changes over time and what extra payments can do.
• How inflation affects your savingsInflation reduces what your money can buy even when your balance stays the same. What real return means and how to factor it into your plans.
• Pay off debt or invest? A simple way to decideCompare the interest on your debt with the return you can reasonably expect. A clear way to decide where each spare dollar should go.
• The rule of 72, a quick way to see when money doublesDivide 72 by your annual return to estimate how many years it takes your money to double. How it works, when it is accurate and when it is not.
• Why it pays to start saving for retirement earlyStarting ten years sooner can double your final savings with the same monthly amount. The numbers, and what to do if you are starting late.
• What CAGR tells you and what it hidesCAGR sums up an investment's growth in one annual percentage. What it is for, why it is not a simple average and what it leaves out.