The Math of Money

Run the numbers before you sign.

The simple math behind 25 money decisions you'll face in your twenties, from a math and finance tutor with more than 1,500 hours of teaching.

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Borrow $ at % for months.

The dealer says
$460/mo
You actually pay
$33,143
Of which interest
$6,143
Cover of The Math of Money by Muhammad Babar

Every chapter answers one question you'll actually face

Read it front to back, or open the chapter you need the week a decision lands on your desk.

1 Your paycheck

  1. 1Is a $60,000 salary really $60,000?
  2. 2Which job offer actually pays more?
  3. 3Should you take the raise or the remote job?
  4. 4How big should your emergency fund be?

2 Debt

  1. 5What does a credit card balance really cost?
  2. 6Avalanche or snowball?
  3. 7Pay off student loans early or invest?
  4. 8Is “buy now, pay later” really free?
  5. 9How much does a bad credit score cost you?

3 Cars

  1. 10Why a $30,000 car can cost $45,000
  2. 11Is 0% financing really cheaper?
  3. 12Lease or buy?
  4. 1348, 60 or 72 months?

4 Housing

  1. 14How much rent can you actually afford?
  2. 15Rent or buy?
  3. 16How much house can you afford?
  4. 1715-year or 30-year mortgage?

5 Investing

  1. 18What does $100 a month become?
  2. 19Why starting at 22 beats starting at 32
  3. 20Is the 401(k) match really free money?
  4. 21What does a 1% fee cost over 30 years?
  5. 22Roth or traditional?

6 Everyday decisions

  1. 23Is the extended warranty worth it?
  2. 24Subscriptions, coffee and the “latte factor”
  3. 25How to build a budget you'll actually keep

The same seven steps in every chapter

No jargon, no trick formulas. If you can work out a 20% tip, you can do everything in this book.

  1. The decisionA real person facing a real choice.
  2. The tempting answerWhat most people do, and why.
  3. Run the numbersThe math, one line at a time.
  4. What changes itThe inputs that flip the answer.
  5. Analysis boxWhat lenders and sellers already know.
  6. Rule of thumbOne sentence to remember on the spot.
  7. Your turnA worksheet and a free calculator.
From Chapter 10

Why a $30,000 car can cost $45,000

Maya, 24, has been at the dealership for three hours. She has drunk two complimentary coffees and eaten a complimentary cookie of uncertain age. She has found the car: $30,000, silver, smells like ambition.

The salesperson leans in with the most important question of the day: “So, what monthly payment works for you?”

He disappears into a back office, which every dealership has and nobody has ever seen. Twenty minutes later: “Good news! I got you to $460.” It's a 72-month loan at 7%. Maya feels like she just won something.

Waterfall chart: $30,000 sticker price plus $2,400 tax and fees, $6,143 loan interest and $6,000 maintenance totals $44,543; minus $10,649 resale value leaves a true cost of $33,894.
One of the book's charts. Over six years, Maya's $30,000 car costs her $44,543, or about $33,900 after she sells it.

25 free calculators, one for every chapter

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    About the author

    Muhammad Babar has taught mathematics, statistics, finance and accounting for more than 1,500 hours and earned hundreds of five-star reviews from his students.

    He wrote The Math of Money for the students who could solve any equation on the whiteboard but had never been shown the math behind a car loan, a credit card or a 401(k). Find more of his work at mzbacademy.com.