Welcome to the season of goblins, ghouls, and skeletons. This is the month we go out of our way to experience fright in all of its forms. And so in true October fashion, today we confront one of the scariest things in all the land: financial illiteracy. We’ve uncovered some of the sneakiest, spookiest, most startling financial facts around, and we’re serving them up cold.
A free pizza could cost you a fortune.
When you become a teenager, a sneaky presence is often lurking in the shadows: a credit card company. They entice you with signup bonuses as small as free pizzas and baseball caps, or as large as airline tickets and cash rewards. But the truth should make you shiver.
Retail credit cards can have interest rates of as much as 29% (or more). Pay the minimum balance on a typical $2000 balance, and you’ll need ten years to pay it back, at a cost of more than four grand. Talk about an expensive cap!
That sweater could rob you of riches.
Think a visit to the mall is an innocent errand? Think again. As a teen, you likely have fewer expenses than you ever will. And thanks to compound interest, your age means you have more time to grow your dough than any adult could dream of. So what’s the rub? By passing on needless spending (like that sweater), you could amass quite the nest egg in your golden years. How much? Just $25 of weekly deposits invested at 7% could net you $137K by the time you reach retirement age. Use this free compound interest calculator to see your spending’s startling consequences.
Marketers are after you.
They know what you’re looking for, they know what’s in your wallet, and often, they know where you live. Who are they? Marketers, of course. And as The Truth Campaign reveals, they aren’t always honest.https://www.youtube.com/embed/yz1_onRdeY0?wmode=opaque&enablejsapi=1
Your paycheck is hiding something.
Getting your first paycheck can be a truly jaw-dropping experience. There you were, closing the ice cream shop every night, earning $10 an hour for 2 weeks straight. Then came your paycheck. All those minus signs! And that balance! Welcome to the world of deductions. Ready to face the truth? Check out this clip from our episodes Understanding Your Paycheck: