The MAT 218 Blog Of Various Related Events and Shenanigans

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How I was able to afford my dream home!

PSYCH! Lol what is saving?

But really, what IS savings?

Hey VSause, Michael here. Where are your Finances™?

Despite all the memes and buffoonery surrounding millennial home ownership, it is genuinely possible to do so with some solid financial practices. There are two major steps you should know about: the initial saving, and the mortgage (because we can’t all be Dave Ramsay buy everything with cash). Typically, you’ll want to start investing in a fund for your house and let the money grow over time until you can buy the property outright or afford a down payment. This is often achieved through something called a “sinking fund”, named because you “sink” money into it until it has reached maturity. Using some simple calculations (or this handy dandy calculator by Omni: https://www.omnicalculator.com/finance/sinking-fund), you can determine how much money you need to put in based on your banks APY (Annual Percentage Yield), or what percent of your current balance will be added in interest), the compounding periods (how often they send you interest money), and of course, how much you need. 

But Michael, I hear you ask, How could I POSSIBLY earn enough to buy a house? Shouldn’t I just go into debt like a responsible adult?

If you can reasonably afford it, sure! What do I mean by “reasonably”? For example: two newlywed friends of mine recently bought a house, rather than renting one from someone else. Buying comes with a fairly reasonable monthly cost, plus you’ve got the security of (essentially) owning your own house rather than living in someone else’s. In the renting scenario, they would owe the renter a monthly fee for using their property, whereas they now owe the bank for the money borrowed for the purchase, promising the house as a security. (Securities are items of value promised if the loan defaults.) They mortgaged the house instead of renting when they realized the monthly mortgage payment was actually CHEAPER than the monthly rent cost! Doing the math (or more accurately, paying one of us business majors to do the math for them) saved them hundreds of dollars, in addition to the fact that they now own a pretty nice asset, and learned a lot about the housing market just by sitting down with an investor friend! So the next time your dad surreptitiously leaves moving boxes in your room, remember that you genuinely can afford to buy a house to live in with your roommates with a little investment help!

As always, comment below if you have any questions!

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Week 2 of the Business Math Blog!

Charts are fun! They give people a way to see what information you have, and gives them a physical context to the data you’re showing them. There are three types of charts I’ll go over today, pie, bar, and plot. The one you’ll most commonly see is a pie chart. This is a good way to see relative percentages in a field, plus there’s some pretty colors too. Here’s an example of an ok but not fantastic pie chart:  

This gives you some relative idea of what people like, but there’s no serious data displayed here. 

This one is great! You can clearly see what the biggest sales are, the legend is labeled in full color and with the units the data represents, and the pie chart itself has distinct colors and slices so you can tell what’s where at a glance. Most of the data isn’t on the pie chart itself, but oftentimes you don’t want it there. 

This one has solid data, but it’s less appealing. As mentioned, all of the data is on the chart, and between that and the rainbow effect that blends the slices together, it’s harder to follow this chart with your eyes. Add to that the small font, and your eyes begin to swim like it’s your fourth meeting before lunch. 

The next type of chart I’ll talk about is bar charts:

Bar charts typically show individual values stacked on each other in neat piles, but they can also be used to compare percentage values over time. 

This is an example of a bar chart not at its full potential. Sideways words really only work with a max of fifteen characters in a single line, and already it’s hard to decipher what this chart’s about. This is my blog, and I’m having trouble deciphering it. They’ve used commas instead of periods, which is only semi common for non-americans, the y-axis isn’t labeled at all, and no trend can be determined from this, making the data collected almost useless. 

This chart is a perfect example of how percentage bar graphs should look! Percentages show data as part of a whole, and this clearly shows you how much each product contributes to the whole. The sections are labeled, the legend is clear and distinctly colored, and despite the art style being that of Windows ‘95, it’s overall aesthetically pleasing. Note that in this graph, they don’t include Saturday and Sunday, which one can infer means they don’t open. Instead of including the empty space (like the last one did), they don’t show the blank days. Does this skew the data? Nope! If there’s no sales, there’s no data to be skewed, so it’s all good!

Finally, plots and trendlines!

Plots are great for showing data changing over time, letting your eyes follow the ups and downs of the data as it goes throughout the years. Including multiple pieces of data (such as both sexes as the above chart does) lets people see the comparative value change as time goes on. The addition of the average rate makes it even easier to see the trend of the data as it moves. Speaking of “trends”...

Trendlines are a great addition to graphs, as they give a numerical idea of how the data is progressing. Even though the GDP line is going up and down, the trendline gives you a nice idea of how the economy progresses and where it’ll continue on to. For this reason, many trendline charts continue on after the data is completed to give people an idea of future data. 

Here is a nicely done (and mildly alarming, given current events) trendline, this time with tolerances. Tolerances are a good way to declare to the reader, “hey, there’s some variation in this accuracy, but we know that it will follow this general line ±5%.” That way, you can show where the data is headed without getting thrown for a loop whenever there’s outlying pieces of data.

And that’s all the charts for today! As always, if you have any questions, comment and tag me!

[mat218blog]

Hello! This is the first post of many for my MAT 218 course up at Lancaster Bible College, and while I doubt anyone except my professor will read these, I’ll be writing this as an applicable review of some personal finance tools for whoever happens across this. Personal finance (or to use a more interesting word, microeconomics) is essentially all the monetary decisions you make over your lifetime. Given that, there are definitely good choices in addition to all of the bad ones you can do. Some are very obvious to most, like going several hundred thousand dollars in debt for an unreliable, high-tax, low mileage sports car, but some are less obvious, such as blowing $5-$10 a day on coffee, which can cripple your cash on hand. 

Today’s topic is going to be checking accounts: how they work, how much they can pay out (Spoiler, very little), and how much they can cost (Spoiler, quite a lot). Checking accounts are where most of us use our money from. They have cards or checks that are tied to that specific account, and when you want to use the money within, you swipe a card or write a check to tell the bank where to send your money. 

All checking accounts typically have 5 major factors: A minimum deposit amount, monthly service charges, interest rates, overdraft fees, and ATM charges. Some banks waive any number of these to encourage business, and many add their own ruleset for the above or their own criteria. It’s important to know what each bank wants from you (Hint: it’s your money) so that you can spend as little as possible while gaining as much as possible from their use of your money. 

Minimum deposits are fairly straightforward, it’s the amount you put in to start an account. My personal banking system, USAA, has a $25 dollar minimum for starting an account. This is just so it’s worthwhile to the bank to separate and log that money. Interest rates are tied to this, as it’s the amount the bank is willing to pay you for the use of your money. Banks move your money around to invest, spend, and trade with other banks, and surprisingly don’t have every dollar they claim to hold in the bank, a process called fractional reserve banking.

Overdraft fees are incurred when you spend more than you have in your account. These charges are for the bank having to shuffle money around to cover your debt from money not inside your account. ATM charges are service fees for the ATM itself, and can be annoying when you have to pay money to access your own money!

So which bank is right for you, based on these factors? The answer is complex, much like banks are, but the simple answer is you want to do research to determine what banks say for each of these factors. Some will hide vindictive service fees or overdraft costs in the finer print, while distracting you with phrases like “No Fees!” or “No Minimum Deposit”, or even giving you “points” for spending money. A good rule of thumb is to always ask the question, “How do they fund the benefits they give me, and is that just coming out of my account?”

Look for ways to maximize gains (high interest rates, good benefits) and minimize fees (monthly fees and ATM fees are particularly killer) in a way that works best for you! No bank or customer is the same, so what works best for your friends or for me will work differently for you, so make sure to do your own research! If you have any questions, comment below and tag me! 

Happy Banking!