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Get Out of Debt Fast with PowerPay Erica Abbott Jessica Tolbert Robby Olsen.

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Presentation on theme: "Get Out of Debt Fast with PowerPay Erica Abbott Jessica Tolbert Robby Olsen."— Presentation transcript:

1 Get Out of Debt Fast with PowerPay Erica Abbott Jessica Tolbert Robby Olsen

2 Warning Signs of Excess Debt Relying on credit cards for daily purchases Relying on credit cards for daily purchases Using home equity line of credit to extend purchasing power Using home equity line of credit to extend purchasing power Paying minimum on credit card bills Paying minimum on credit card bills Using cash advances to keep afloat Using cash advances to keep afloat Losing sleep over debts Losing sleep over debts 2

3 How to Dig Out Assess your finances Assess your finances Add up debts Add up debts Use PowerPay to develop a plan to repay Use PowerPay to develop a plan to repay Stop borrowing Stop borrowing Use cash or debit card for daily expenses Use cash or debit card for daily expenses Use 1 credit card & pay in full each month Use 1 credit card & pay in full each month Keep 1 card in reserve… in case of theft or fraud Keep 1 card in reserve… in case of theft or fraud Call creditors before they call you Call creditors before they call you 3

4 4 What type of debt do you have? Secured debts Have some type of collateral Have some type of collateral Items could be repossessed or foreclosed Items could be repossessed or foreclosed Example: car, house Example: car, house Unsecured debts No collateral No collateral bill collectors calling bill collectors calling Example: credit card Example: credit card

5 5 How much do you owe? Make a complete list: Creditor name Creditor name Total balance Total balance Monthly payment Monthly payment Interest rate Interest rate Payments in arrears Payments in arrears

6 Check your Credit Report at annualcreditreport.com 6 How to contact Creditors How much debt you owe Be sure to check all three See for more information on credit reportshttp://www.usu.edu/fpw/

7 7 Why am I in debt? Am I living beyond my means? Am I living beyond my means? Job loss, or pay reduction Job loss, or pay reduction Unexpected medical expenses Unexpected medical expenses Insufficient insurance Insufficient insurance No emergency fund No emergency fund

8 8 Examine Your Expenditures & Develop a Spending Plan Is the plan realistic? Is the plan realistic? Can I meet all my monthly obligations? Can I meet all my monthly obligations? How can I reduce spending to put more money towards my debts? How can I reduce spending to put more money towards my debts? How can I increase my income? How can I increase my income? Will I stick to it? Will I stick to it?

9 9 Credit Card Rates Introductory Rate = 0% Typical Rate = 18% or higher $7,000 balance, yearly interest payments ~$1,000

10 10 Reduce Credit Card Rates Call your credit card company Call your credit card company Let them know your current interest rate and your habit of paying on time (if true) Let them know your current interest rate and your habit of paying on time (if true) Tell them other credit card companies are offering lower rates Tell them other credit card companies are offering lower rates Ask if they will lower your current rate Ask if they will lower your current rate

11 11 PowerPay Debt Analysis get out of debt faster Pay less total interest

12 12 Power Pay Debt Analysis Create a List of debts & creditors Create a List of debts & creditors Prioritize debts Prioritize debts Pay at least minimum each month Pay at least minimum each month When a debt is paid, put same $ towards highest priority debt When a debt is paid, put same $ towards highest priority debt Add extra dollars to highest priority debt Add extra dollars to highest priority debt

13 13 A person with a total debt of $30,381 will pay $38,966 over 9 years without PowerPay BUT with PowerPay only pay $34,819 & be debt free in only 3 years The Results…

14 14 Power Pay Saves You… 6 Years $4,146

15 15 Get Back on the Right Track Create a spending plan. Create a spending plan. Stick to it! Stick to it!

16 16 Get Back on the Right Track Use community resources Use community resources USU Family Life Center USU Family Life Center County Extension office County Extension office Financial Planning for Women Financial Planning for Women

17 17 Get Back on the Right Track Establish better credit habits Establish better credit habits Pay bills on time Pay bills on time Dont create more debt Dont create more debt

18 18 Get Back on the Right Track If your monthly obligations are not affordable, reduce spending. If your monthly obligations are not affordable, reduce spending.

19 19 Choices That Could Get You in Trouble Bouncing checks Bouncing checks Postdated checks Postdated checks Payday lenders Payday lenders Rent to own Rent to own Pawn shops Pawn shops For-profit debt counseling For-profit debt counseling Get rich quick schemes Get rich quick schemes

20 20 Remember… Its not the amount you make, its what you do with it that matters.

21 Questions? Experiences to share? Experiences to share? What works for you? What works for you? 21

22 Evening Program Please tell your friends that this program will be repeated this evening Please tell your friends that this program will be repeated this evening 7-8:30 pm (more time for Q&A) 7-8:30 pm (more time for Q&A) USU Family Life Center, 493 N 700 E USU Family Life Center, 493 N 700 E Free, easy parking Free, easy parking 22

23 FPW Website: Website: Blog: Blog: FB: facebook.com/FinancialPlanningforWomen FB: facebook.com/FinancialPlanningforWomen facebook.com/FinancialPlanningforWomen 23

24 Upcoming FPW August 8: Q& A with insurance agents August 8: Q& A with insurance agents Sept. 12: Managing your $ IN retirement Sept. 12: Managing your $ IN retirement Oct. 10: The Psychology of Money Oct. 10: The Psychology of Money Nov. 7 (FIRST Wed.) TBA Nov. 7 (FIRST Wed.) TBA 24

25 Housing & Financial Counseling Center 493 N. 700 E. Logan At the bottom of Old Main Hill Family Life Center 25

26 Budget PlanningDebt ManagementCredit UseLife Stage ResponsibilitiesBankruptcy Intervention Financial Management 26

27 Power Pay Stop borrowing or charging until debts are paid off Stop borrowing or charging until debts are paid off Make power payments. As one debt is paid off, move that payment to another debt rather than spending it on something else. Make power payments. As one debt is paid off, move that payment to another debt rather than spending it on something else. Saves money in interest and pays debts faster. Saves money in interest and pays debts faster. 27

28 Home PurchaseResponsibilities of Home OwnershipMortgage DefaultReverse Mortgage Housing Counseling 28


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