CD Partner: Money Smart Week, Six smart ways to spend $1,000

If you are like many people who receive an income-tax refund check, before you know it – the money’s gone. Unfortunately this year there is no additional lump sum stimulus rebate check to follow the normal IRS refund.

If you are like many people who receive an income-tax refund check, before you know it – the money’s gone. Unfortunately this year there is no additional lump sum stimulus rebate check to follow the normal IRS refund. * So let’s make good use of what we have. Check out the following way $1,000 can turn into much more for you! 1.    Prepare for your “golden years” (retirement). One thousand dollars won’t go far in retirement, but it will go further if you give it time to grow. What happens if you’re 30 years old and you put $1,000 into an IRA (individual retirement account) and don’t touch it until retirement in 35 years? Given the advantage of time and compounding, your $1,000 would grow to $11,506 by age 65 if you earned a hypothetical 7 percent annually, compounded monthly. (Now imagine if you kept contributing annually!)** 2.    Pay down credit card debt. At interest rates of 14 percent and above, knocking $1,000 off a credit card balance can save you lots in interest payments each year. 3.    Invest for college. A child’s college education will cost much more, but you can get started with $1,000. The (Tavis) Smiley Group and Nationwide Insurance commissioned a survey of African-Americans and their financial planning patterns. The study found on saving for college, nearly half of all survey participants with children under 21 said they are very or extremely worried about being able to afford a college education for their children, while only about one in 20 of all survey participants say they actually have a college savings plan. Only three percent say saving for education is the most important goal. ** * 4.    Buy a life insurance policy. Life insurance provides basic financial protection for your family. If you are not insured, talk to a financial professional to learn where to start. 5.    Buy disability income insurance. Consider buying insurance to protect a portion of your income, which might be your biggest asset.  6.    Get more education. Take a college course that you can apply to your job or business – it might be tax deductible and could lead to a pay increase. Dr. Penn is author of the “Pink Corner Office” – Women Achieving Power In The Workplace, and Chairman/Managing Director of MFS WealthCare, a wealth management firm.  She can be reached at her podcast: www.letstalkfinancial.com and email: info@mfswealthcare.com. ______ Copyright 2009 Special to the NNPA from the Louisiana Weekly, Let’s Talk Financial. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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