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From Confusion to Clarity: Mastering APR and APY

June 19, 2024 This week was another informative one as Je’Lisa and I learned the difference between APR and APY from our financial coach. These are fundamental concepts in finance that affect borrowing and saving. While APR provides a straightforward look at the annual cost of a loan or investment, APY gives a more comprehensive view by including the daily, monthly, and quarterly statistics. Personally, this tip came in handy this weekend when I had the decision of which credit card I wanted to pay off between two. One had a higher balance to pay off and high APR; the other card’s balance and APR were lower. Now, someone from the outside looking in would probably choose to pay the lower balance off because it’s not much of a financial burden to them. I chose to pay the card with the higher balance and APR off because by just paying the minimum balance, I was hurting not helping myself – pretty much potentially making the hole deeper. By understanding these terms, you can make better financial choices, whether you’re taking out a loan, applying for a credit card, or investing your money. We also got a chance to share some tips we’ve learned with family members that encouraged them to follow some of the same practices. In our previous blog, we discussed how eliminating some of those subscriptions that you don’t pay attention to can save money. We’ve shared that information with family members, making them take a look at their subscriptions as well. Every week we learn a new tip to add on the road to our financial goal, and we can’t wait to learn more. Use this blog post to check your credit card statements and strategize which pay-off method would work best for you! Please share! You might also be interested in As we wrap up our Project Money experience, we want to take a moment to reflect on how far we’ve come—emotionally and financially—and share our journey... This past week, our family participated in a door and patio decorating contest hosted by our apartment management company. The grand prize? A $200 gift... Over the past year, my family has been making deliberate choices to save money and focus on our financial goals. One of those decisions recently involved... As we approach the end of our journey with the Project Money program, Cory and I (Je’Lisa) took some time to reflect on how we can apply the financial... Every now and then, life throws a financial curveball—in this case, it was a pleasant surprise. We received a refund from our gap insurance since our car... This week, we faced an unexpected hiccup with our insurance: A doctor charged us for a 2023 appointment because they had outdated information. It was frustrating... Thanksgiving is a time for gratitude, family and of course, a feast. But let’s be honest, hosting a traditional Thanksgiving can come with a hefty price... This weekend, we decided to take a quick overnight trip to Minnesota. It was to record some music and spend time with friends, but we were determined to... This month marked a milestone for our family: It was our first month without a car payment after refinancing our vehicle through Summit Credit Union. With...
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