Enjoy Family Game Night and Save

Entertainment is not cheap these days. The price of movie tickets has risen steadily for several years. With the increased popularity of even more expensive 3-D movies, going to the theatre can cost an average of $8.06 per ticket. As teens, we may be willing to pay for a single movie ticket every week or two. However, this becomes an expensive habit once we become adults and go to the movies with a family in tow. Going out to eat can also create a significant dent in your bank account. One family meal at a sit-down restaurant can easily cost $50 or more. Dinner, movies, and other weekend activities like shopping at the mall may seem like the family-time mainstays; however, there is a more budget-friendly alternative.

Family game nights have been growing in popularity since the beginning of the economic downturn. By staying home with your family and friends, you can avoid the rising costs of outside entertainment. Board and card games are a much better investment than movie tickets or an evening shopping at the mall because you can get repeated use out of a single game. Game nights can help you save money and develop a money-smart habit that will last a lifetime.

Instead of going out this weekend, stay in and try these activities for a fun family game night at home:

·         Play a favorite game or learn a new one. You can look up new board and card games online. Try selecting several different games to give you variety during your game night.

·         Invent your own game! Design a board or cards, and write the rules. Creating the game can be a fun activity in itself.

·         Learn to make an at-home version of your favorite take-out food (pizza, stir-fry, barbeque, etc.). Recipes and instructional videos can be found on the Internet. You may like your version more than costly restaurant food!

·         Watch a favorite DVD as a family, or find something new from a DVD rental service.

·         Do crafts together. Many crafts projects, such as origami, are free or almost free. You can also check out crafting books from your local library.

Give these suggestions a try. If family game night becomes a weekly tradition, the savings will add up impressively.

Reference:

Cieply, M. (2011, July 31). Charging a premium for movies, at a cost. New York Times. Retrieved from http://www.nytimes.com/2011/08/01/business/media/as-ticket-prices-rise-theater-audiences-shrink.html?pagewanted=all&_r=0.

 

Video Post: "APR vs. APY"

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Quick Thought: Annual percentage rate (APR) and annual percentage yield (APY) can be difficult concepts at first. This video is helpful for visual learners, or those who need a little review.



Reference:
Investopedia. (n.d.). APR vs. APY. [Video file]. Retrieved from  http://www.investopedia.com/video/play/apr-vs-apy/#axzz2iv3wkjko

APR vs. APY: What You Need to Know

In order to be an effective consumer, you need to be familiar with terms related to borrowing and saving. Two such terms are annual percentage rate (APR) and annual percentage yield (APY), which you will see any time you open a bank account or get a loan. Although these terms sound very much alike, not knowing the difference between the two can be very expensive.

Both APR and APY refer to the amount of interest paid on a principal amount of money. This is either the interest you pay on top of a loan that you take out or the interest that someone pays you in return for your investment. The essential difference between APR and APY is compounding interest. Compounding interest is when interest is paid for the principal amount of money and the accumulated interest. When interest is compounded, the amount of money you have can grow very quickly if the interest is being paid to you. If you are paying interest, then the compounding means that you will have more to pay. APY accounts for compounding interest, but APR does not.

If you take out a loan or make an investment that will compound interest, you should calculate the APY. To do so, use the following formula:

APY = (1+ Periodic Interest Rate)^{number of periods in a year} - 1

If you see a bank or credit card application advertising its current APR, it means they are quoting you the rate that does not account for compounding interest (this is sometimes known as simple interest). APR is simply the percentage of interest to be paid on a loan or investment annually. APR tends to be a lower percentage amount than APY. To calculate APR, use the following formula:

APR= Periodic Rate x Number of Periods in a Year

Financial institutions sometimes promote one rate rather than another in order to persuade consumers that their rate is better than their competitors’ rates. For example, credit card companies often promote their APR because it is lower than the APY, which makes it seem like customers will pay less interest. Investment firms, on the other hand, prefer to advertise their APY, which shows that customers' investments will earn more interest. To avoid being fooled by a financial institution using a more attractive rate, consumers should pay close attention to whether they quoted APR or APY. Those borrowing money or using credit cards should focus on the APY because it will prepare you for the higher interest payment. When saving or investing money, however, you need to see the APR because it prepares you for a more conservative return.

READERS, what do you think?

Do you think many people confuse APR and APY? Why or why not?

Reference:

Investopedia US. (2010, February 7). APR and APY: Why your bank hopes you can't tell the difference. Retrieved from http://www.investopedia.com/articles/basics/04/102904.asp#axzz2JEgjDq4l.

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