Debt Elimination Planning
Eliminating Debt: Creating Choices
It is a crime that in this country, the richest country in the world, we graduate from our secondary schools without even a “crash course” in how to handle debt. Even more ridiculous is that we are allowed to graduate from college without a mandatory financial course. Here are the results as of May 2015:
U.S. household consumer debt Profile
• Average credit card debt is $15,609
• Average student loan debt is $32,956
In total, American consumers owe:
• $884.8 billion in credit card debt
• $1.18 trillion in student loans
• An increase of 7.5% from last year
Debt is a funny thing. It affords us new opportunities, maybe a college education or a new home, but it can also rob us. Consider that the average credit card interest rate is in the mid-to-high teens, and for numbers people that equates to about 16%. Consider also that the average wage increase per year is less than 2%. Simple math tells us that it will take years to pay off a debt with a 16% interest rate. Now, think deeper: every year you spend working to pay off debt from the past means you have less money to spend now. It’s not just money that’s being sucked away, its years of your life.
Can we characterize this situation as anything other than financial slavery?
The saddest and most pointed example of this was a couple in their mid-thirties with two beautiful children and well-paying jobs, who had requested financial planning. Their goal wasn’t a beach home. It was to provide for their children’s educations. Everything about their finances seemed reasonable until we started the credit card discussion. We began our discussion with me addressing their credit card debt and the average interest rate they were paying on that debt. They owed $50,000 at an average rate of 18% interest. My jaw hit the floor. The point is that it would take $1,469 per month for the duration of four years to pay off their credit card debt. That’s a mortgage payment!
Wrapped up in credit card debt was their children’s future – their college education.
The college Class of 2015 just graduated. I saw a meme once that said, “Congratulations, you have just gone through the easiest years of your life.” With student debt climbing drastically, that statement could not be any more accurate. The class of 2015 graduated with somewhere around $35,000 in debt on average according to Mark Kantrowitz, the publisher of Edvisors.com. He’s kind of the guy to know when college costs and financial aid is being discussed, as Mark provides analyses to parents and students. With this recent increase, 2015 graduates have about $2,000 more in student debt than their 2014 peers.
Most Americans have been caught in the debt-trap at least once in their lives. Maybe you haven’t racked up $50,000 worth of credit card or $35,000 of student loan debt, but the interest payments alone may still be eating into this year’s vacation budget. If this sounds familiar, then a solid debt management plan can set you free – for good. Pay off debt a tiny bit at a time by starting the ball at the top of a hill. As time passes and you pay off more debt, the snowball grows in size and momentum until it’s so big that it crushes any remaining debt – well you get the idea.
This is a problem that is actually ageless:
We see retiree Social Security income being garnished due to student loan debt!
The My iFinPlan Debt Payoff Planner
What can it do for me?
Your My FInPlan Debt Payoff Planner allows you to enter up to twenty separate debts. It analyzes your current situation and recommends specific strategies to pay down your debt quickly and painlessly. My FinPlan helps you engage with your plan to start a debt snowball, to learn to expect what the power of a personalized financial plan does for you, and allows you to evolve into the new you. My FinPlan even helps you to begin to change your financial habits and gives you the tools that you need to help you with your next financial decision.
Written in plain English, your plan answers critical but common everyday questions such as:
• How long will it take to pay off my debts as they are today?
• Should I pay down my debt or invest the money instead?
• Which debts should I pay off first?
Are you concerned that you may input the incorrect information?
No worries my friend!
- We won’t simply crank out a report if it doesn’t meet real-world circumstances. We’ll review your submission and include a complimentary “sanity check” before we issue your report to you – at no additional cost.
- You also have 20 minutes FREE with a professional planner to go over your plan to ensure that you have a good understanding of your plan and to gain clarification to any questions that you may have.