how finance works: the hbr guide to thinking smart about the numbers

How much are you saving in your bank account each month? What about the paycheck that’s coming tomorrow? You’ve probably heard the phrase “the numbers don’t lie.” Well, that’s not true. However, the numbers don’t lie about where you’re at in your lives. Remember I told you about shinning shoes or watches that have been trained to tell time down to seconds? Well look closer and you’ll notice there is also a bit of truth to these stories. In fact, it’s possible that at least some of the numbers are wrong. Although individuals are more accurate with their math skills at times, they still tend to make errors when they enter their data when entering accounts, etc.

How does finance work? Is it a science, or does it just happen to be about mousetraps and forking out for all kinds of numbers? If you’ve asked the question over and over, you’re lying. How does money work? In short, it all happens in banks. Banks make money. That’s what banking is all about. Isn’t it? Banking is about paying interest on deposits, leveraged loans, and credit card interest payments. Banks compete against each other by making sure that their customers’ needs are met first and foremost. In order to make things easier for the bank, they offer various services like checking accounts, credit cards, etc.and that’s where your banking service comes in…