Time value of money

This weekend at class we reviewed the elements of Finance. If you teach your kids one thing about money, make sure this is it. If you don't know what it is teach yourself! You will be better prepared next time you get a loan or are faced with an investing decision. How money grows is a relatively simple concept but few people seem to really grasp how it can impact their lives if it is properly maneged and understood. Money today is worth more than money in the future and it must be grown in some way. There are always five variables (present value, interest rate, payment, periods, and future value) in the TVM formula and with a little practice you can create scenarios with a financial calculator, a spreadsheet or on websites using the online calculators. People make bad financial decisions because they don't understand these concepts. Don't be one of them!