By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
A refresher course in basic finances
Save money
Placeholder Image
Until you get in the habit, putting aside savings is never easy. But the sooner you start, the sooner you’ll start seeing results. As you’ll see below, when it comes to savings, time is your best friend:
The power of compounding. When you reinvest interest earned on savings accounts or other investment vehicles, the interest grows (compounds) the account’s value much faster than if you withdrew it. For example, a one-time $10,000 investment earning 6 percent a year would grow to $17,908 in 10 years if you reinvest the interest; after 20 years it would be worth $32,071 and $57,435 after 30 years.
Regular investments. You needn’t start with such a large initial investment to reap big rewards. Say you’re 21, start with a zero balance, save $100 a month, earn 6 percent annual interest and reinvest the interest. After 10 years you’d have $16,470; $46,435 after 20 years and $100,954 after 30 years. If you retire at age 66 your account would be worth over $276,978 — all for a $100-a-month investment.
Timing is important, however. Postponing savings by only two years would reduce your balance in 20 years to $38,929 — more than $7,500 less. Wait five years to begin and your balance drops to $29,277 in 20 years.
Tax-deferred savings. Another way to accelerate earnings is to take advantage of tax savings offered by retirement savings programs like 401(k) plans and IRAs. With a 401(k), you can contribute up to $16,500 a year (or $22,000 for those 50 and older) on a pre-tax basis. This lowers your taxable income — and therefore your taxes — and allows your account to grow tax-free until you withdraw the money at retirement.
Regular IRAs offer similar pre-tax advantages; or, you can contribute to a Roth IRA using after-tax dollars and your earnings will be completely tax-free at retirement. The annual IRA contribution limit is $5,000 ($6,000 for 50 and older).
Practical Money Skills for Life, Visa Inc.’s free personal financial management program, features a guide to 401(k) plans at www.practicalmoneyskills.com/benefits. To learn more about IRAs, visit www.irs.gov.
Risk. The riskier an investment, the greater your potential gains — or losses. For example, savings accounts offer lower interest rates in exchange for minimal or no risk, whereas stocks potentially can earn double-digit investment rates over long periods of time, but at much higher risk.
Inflation. Inflation measures the rate at which goods and services increase in cost over time. If an investment earns 2 percent interest but the inflation rate is 3 percent, the result is a 1 percent loss. That’s why many financial experts often recommend people with at least five to 10 years until retirement keep a portion of their savings in higher-risk investments like stocks and bonds; otherwise, it’s hard to stay ahead of inflation.
Keep in mind that no matter how much interest your investments earn, if you carry forward credit card or loan balances (aside from tax-deductible mortgage interest), you’ll be eating into whatever profits you might make. For tips on managing credit cards and debt, visit Practical Money Skills for Life’s Credit and Debt site (www.practicalmoneyskills.com/credit).

Alderman directs Visa’s financial education programs. Sign up for his free monthly e-Newsletter at www.practicalmoneyskills.com/newsletter.
Sign up for our e-newsletters
Visit with children a real eye-opener
Placeholder Image

One of my favorite activities as a state senator is when I get to speak to students at our local schools. This year, I spoke to third-grade students at May Howard Elementary and Marshpoint Elementary in Chatham County and Button Gwinnett Elementary in Liberty County.
The students from each of the schools had been studying civics and were familiar with the three branches of government — executive, judicial and legislative. I explained my role as a senator in the legislative process and told the children how the citizen legislature in the state of Georgia works.
Presenting each of the schools with a Georgia state flag, I explained the three principles for which the state flag stands — wisdom, justice and moderation — and had them recite the pledge to the flag with me. 
The students at all three schools were bright, respectful and well-disciplined — a tribute to their families and especially to their teachers, who had prepared the students for my visit with ideas for great questions.
The students in Ms. Hutchinson’s class at Marshpoint Elementary were impressive in singing the preamble to the Constitution during my visit. What a great way to learn such an important part of our nation’s history — another wonderful example of the great job our teachers are doing.
I was delighted last week to receive thank-you letters from some of the students. Here are excerpts from a few of their letters:
 
Dear Mr. Carter,
Thank you for taking the time out of your busy schedule to come speak to us. I learned so much! I learned that there are two kinds of Pledge of Allegiances. That is pretty cool.
Do you travel all over the world do you? I really like that you taught me more about the three branches of government.
— Megan
 
Dear Sen. Carter,
Thank you for telling us about your job and your favorite thing about your job. I liked the Georgia state flag. I still have more questions. Do you have to work on Saturday and Sunday? Are you the only one who makes the laws?
Yours truly,
Ryleigh 


Dear Sen. Buddy Carter,
Thank you for coming and letting us have a little bit of your time. I want you to know that I learned something new. The Georgia pledge! Justice, wisdom and modesty! Thanks again!
— Liam
 
Dear Sen. Buddy Carter,
Thank you for coming and helping us learn more about the government and some of your job. Thank you for giving us a Georgia flag. It was fun when you came. Thank you for giving us some questions so we could answer them.
P.S. Did you ride in a limousine? I was going to ask you a question but then I forgot. But now I remember. How many rooms are there where you work? You can send me a note if you can.
Your friend,
Erin
 
I’m uncertain whether the students learned as much from me during my visit as I learned from them. One thing that I was reminded of was the honesty that comes from the innocence of childhood. I wasn’t quite sure how to interpret some of the questions, such as the one asked in this letter:
 
Dear Sen. Carter,
I loved your speech. Thanks for coming to our school. I think my favorite part was when we held the flag. It was so fun! I have a question: How many people voted for you?
Sincerely,
Shelly
 
I also was more than a little concerned about a recurring question in the thank-you notes that was posed to me during one of my visits by a beautiful, brown-eyed girl who, with a very serious look on her face, asked “Did you ever get re-elected be-fore?”


What a great group of young people! My faith and hope in our future has been reassured. What an amazing job our families and teachers are doing on a daily basis to support and encourage our next generation. Thank you for your dedication to teaching our leaders of tomor-row.

Sen. Buddy Carter can be reached at Coverdell Legislative Office Building (C.L.O.B.) Room 301-A, Atlanta, GA, 30334. His Capitol office number is 404-656-5109

Latest Obituaries