EVAN's Corner

January 2020

Live Well
Below your means

Hi Everyone,

As many of you know I bake sourdough bread. Recently I’ve been having trouble with the dough rising properly. I had a feeling it had something to do with the levain. You make the leavin using flour, water and some starter. Last weekend I let the levain mature for a full 24 hours. Then I put some flour, water, salt and levain together and after eight or so hours I got two beautiful loaves ready for proofing. This is one of them sitting in the proofing bowl prior to putting in a plastic bag for proofing in the refrigerator overnight. The next morning two incredible loaves of bread came out of the oven.

This adventure with levain and bread sure reminded me of personal finance. Getting your financial house in order and keeping it that way all takes time. Sometimes lots of time. Ever heard of the magical power of compounding? That’s what happens with money when it’s put into something like a certificate of deposit. Every day your money is in that certificate it earns you interest and then, at the end of every month you’re paid that interest. Lots of our members just have us add the interest to the principal of the certificate of deposit. That’s where the magic of compounding comes in. The interest you earned is now earning you more interest. It’s magical but just like levain it takes time for a certificate of deposit to mature and earn as much interest as it can for you. Now for some bad news. If you have debt guess what? You’re paying interest on the debt instead of it paying you. So do a couple things this year. Start reducing your debt. Not next week or next month or next year. Start right now. Every dollar of debt you pay down is one more dollar that’s not costing you interest. And one more thing to start doing right away. Start a savings program. Does your work place have a retirement plan that you can contribute to? If they do look into it because it might be a tax advantaged plan meaning you get tax savings from contributing to it. The key is to start saving right now so that the magic can begin for you.

I have a dear friend who also bakes sourdough bread. She one time said that once you start baking sourdough bread your life will never be the same. I couldn’t agree with her more. But you know what? Once you start paying down debt and saving, your life will never be the same either. Start today and give us a call because we’d love to show you how to get some magic in your life.

Till Next Time,
Evan Clark, President and CEO
p: 202.808.3633;   e: eclark@docfcu.org

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