High Credit Card Rates Ruin Personal Finances and Getting to $1 Million in Savings?

2 Frightening Financial Facts

It’s easy to get scared with a lot of things. But, nothing is more frightening than knowing some real facts about many people’s finances. Here are some of them:

15 and 25 percent

Credit cards are very convenient. But, they can be very deadly at the same time. They can attack your financial future without you noticing it. On the average, most cards charge an interest rate of 15%. But, for those with bad credit, the interest is as high as 25%. This means that if your borrow $5,000 at 15% interest, paying this amount in minimum will take you 145 months to pay it in full. At this rate, your total interest payment will amount to $3,000. In order to avoid this, try your best to pay off your credit card balances as soon as possible.

Below $1,000

The 2011 Retirement Confidence Survey shows that 67% of Americans have not saved at least $50,000 for retirement. The worst part, 29% of these people has not even spared at least $1000! If you have already allocated $50,000 for your retirement at present, you may feel that it is already enough. However, it actually isn’t. According to the retirement calculator of Bloomberg, if you are 45 years old and you want to spare $1 million for your retirement, you have to save around $17,000 every year until you reach 65 years old.

But, most people will even agree that a million dollars worth of savings is not sufficient. If you want to secure your retirement, it would be wise for you to act as soon as possible. Save more than what you usually keep. Invest properly. Take full advantage of retirement accounts like IRAs and 401Ks most especially if your employer gives matching funds. Think of working more years and cutting lifestyle costs. Also, consider working on a part time basis even if you are already retired.

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