Tuesday, August 11, 2009

What is a financial baffle bag?

During my sophomore year in college, I took a personal finance class and was introduced to my first Money magazine. For the past 10 years, I have been subscribing to Money magazine.

It has been like a security blanket to me. I read it from cover-to-cover each month and take it everywhere. I love it because it has helped me grow and become more financially literate. I find the articles to be complete, well researched, and well written.

In the beginning, I would sit in my room and read one article and highlight every word that I didn't understand and put the magazine down. This was out of pure exhaustion because it was like trying to understand a foreign language. At the time, I made a goal for myself that I wanted to be able to read an entire Money magazine and not be so baffled by the financial terminology.

So my friends, this is how the birth of the baffle bag came about. Any word that I would come across that I didn't understand I would look it up. Now, I am able to read Money magazine without feeling so confused.



Lets talk about this Janie Out of Debt baffle bag. I have created this bag to teach you about financial terminology. This can be your go to place when you are stumped by a financial term and you want it explained by a "real" person and not a complicated dictionary definition.

My goal is to help you feel more confident and in control of your money. I am truly pouring my heart and soul into this site because I believe that financial smarts makes the world a better place. I believe that everyone deserves and owes it to themselves to be financially literate. This way you can protect yourself against being taken advantage of financially.


First Baffle Bag Word: Interest Rate

Note: These words will not be in any order. But I will categorize them in alphabetical order in a future post. Also, these are definitions that I have put in my own words. If you would rather see a more complete or technical definition of the word, I will place a link to a reputable source at the end of each post.

An interest rate, is the amount of money you pay for borrowing money that isn't yours. Money that isn't yours, can take many forms like available credit, student loans, car loans, mortgage, etc.

It is normally expressed as a percentage rate over a period of one year. You may have seen the term annual interest rate at your local bank or on television.

The person lending you the money is making a profit because they are charging you to use their money. For instance, when you place your money in a savings account and you earn interest on that money. You are lending the bank your money and they are paying you interest to use your money. See it goes both ways. You just want to try to be the lender more often than the borrower. Make sense....easy enough right?
I hope you enjoy the new Baffle Bag concept.

Definition of Interest Rate from InvestorWords.com


Best wishes,


Janie

No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...