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Get Out of Debt Fast with PowerPay. Erica Abbott Jessica Tolbert Robby Olsen. Warning Signs of Excess Debt. Relying on credit cards for daily purchases Using home equity line of credit to extend purchasing power Paying minimum on credit card bills Using cash advances to keep afloat - PowerPoint PPT Presentation
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Warning Signs of Excess Debt
Relying on credit cards for daily purchases
Using home equity line of credit to extend purchasing power
Paying minimum on credit card bills Using cash advances to keep afloat Losing sleep over debts
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How to Dig Out Assess your finances
Add up debts Use PowerPay to develop a plan to
repay Stop borrowing
Use cash or debit card for daily expenses
Use 1 credit card & pay in full each month
Keep 1 card in reserve… in case of theft or fraud
Call creditors before they call you 3
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What type of debt do you have?
Secured debts Have some type of
collateral Items could be
repossessed or foreclosed Example: car, house
Unsecured debts
No collateral bill collectors calling Example: credit card
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How much do you owe?
Make a complete list:Creditor name
Total balanceMonthly payment Interest ratePayments in arrears
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Check your Credit Report at annualcreditreport.com
• How to contact Creditors• How much debt you owe
• Be sure to check all three• See http://www.usu.edu/fpw/ for more
information on credit reports
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Why am I in debt?
Am I living beyond my means? Job loss, or pay reduction Unexpected medical expenses Insufficient insurance No emergency fund
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Examine Your Expenditures & Develop a Spending Plan
Is the plan realistic? Can I meet all my monthly
obligations? How can I reduce spending to
put more money towards my debts?
How can I increase my income? Will I stick to it?
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Credit Card Rates
Introductory Rate = 0%Typical Rate = 18% or
higher $7,000 balance, yearly
interest payments ~$1,000
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Reduce Credit Card Rates
Call your credit card company 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
Ask if they will lower your current rate
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Power Pay Debt Analysis
Create a List of debts & creditors Prioritize debts Pay at least minimum each
month When a debt is paid, put same $
towards highest priority debt Add extra dollars to highest
priority debt
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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…
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Get Back on the Right Track
Use community resources USU Family Life Center County Extension office Financial Planning for Women
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Get Back on the Right Track
Establish better credit habits Pay bills on time Don’t create more debt
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Choices That Could Get You in Trouble
Bouncing checks Postdated checks Payday lenders Rent to own Pawn shops For-profit debt counseling Get rich quick schemes
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Evening Program
Please tell your friends that this program will be repeated this evening
7-8:30 pm (more time for Q&A) USU Family Life Center, 493 N 700 E Free, easy parking
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FPW
Website: www.usu.edu/fpw Blog: http://fpwusu.blogspot.com/ FB: facebook.com/
FinancialPlanningforWomen
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Upcoming FPW August 8: Q& A with insurance
agents Sept. 12: Managing your $ IN
retirement Oct. 10: The Psychology of Money Nov. 7 (FIRST Wed.) TBA
Housing & Financial Counseling Center
493 N. 700 E. LoganAt the bottom of Old Main Hill
435-797-7224
Family Life Center
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• Budget Planning
• Debt Management
• Credit Use
• Life Stage Responsibilities
• Bankruptcy Intervention
Financial Management
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Power Pay
www.powerpay.org 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.
Saves money in interest and pays debts faster.
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