## Saturday, August 02, 2008

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### I'm not good at math so I don't save money

Are you serious? I like how people categorize "math" with finances. Like being able to calculate what the cost of something is on sale or how to just calculate savings if they put their money somewhere.

Is it because most people equate math with algorithms and proofs? Fine, if that is the case. But everyone should be able to know how to save money. Isn't that the point. Most people are NOT in sales so their income is set. You trade time for money if your hourly and if your salary you better hope you don't work more than 40hrs a week or your hourly rate conversion just dropped.

So story goes like this:
We got a customer who is using First Choice Power at \$0.23 cents/kw on a month to month plan. Been doing this for awhile now. Normal consumption in the summer is 2000kw.

So simple math tells us that this person should be paying before taxes is:
\$0.23 X 2000 = \$460 per month.

I guess that isn't so bad if that is the rate you can only pay. BUT.

I have a 6 month rate that is \$0.134/kw and a 1 yr at \$0.144/kw.

I tell everyone to lock it as long as you can as you will never know if the market prices will go up or down.

The savings this person would have had are as followed per month
• 1 year plan (\$0.23-\$0.144) x 2000 kw = \$172 SAVED per month for 12 months at that usage
• 6 months plan (\$0.23-\$0.134) X 2000 kw = \$192 SAVED per month for 6 months at that usage
Now of course the usage will drop in the winter but you get my point. For at least the summer months this person was OVER PAYING by \$172-\$192 PER MONTH.
Okay. Some people got money coming out of the wazoo so this isn't a concern. But for the working class this is huge. For something you will get regardless and it's delivered the same.

It has been said that most bankruptcies could be avoided if another \$250 of income was generated per month. Instead of generating it you're almost there just by saving!

So ask yourself. Why does our school system not have a class to teach people about how to manage their money? Why do so many people carry a credit card debt? How come you hear so many college students carry debt on the cards from just stuff they buy? No education. We go to school to learn a trade yet most people never really understand how money works. Sad Sad times.

Plus, I saw on David Letterman last night that physical education class are being phased out. So now we are going to become a nation of overweight students who have no clue that paying the minimum due on the credit card isn't smart.