Let's say you have $45,000 in total debt. You only have $5,500 in income, and your total monthly debt expenses are $500 and other monthly expenses total $4,900. That leaves you $100 each month that you can choose to spend however you'd like!
How long would it take you to pay off that $45,000? Well, some basic math would tell you that it would take 90 months to pay off the $45,000 ($45,000 / $500). That's 7.5 years, and keep in mind, I didn't even take interest into consideration.
What if I told you that you could do it in 4 years? Sound to good to be true? That's what I thought until I saw how it was possible. But, that's exactly the truth, and through the Worth Account, I'm paying off $45,000 in just 4 years! Well, I've been given a raise and had some nice tax returns that has sped up that payoff date, but when I first heard about the Worth Account, I thought it was too good to be true until I learned how it worked and saw it in action within my own life. I've paid off a car, multiple credit cards, loans, and continue to use it, and will until I'm debt free!
When I had $45,000 in debt when I first came across the program, I was left with two choices. Continue to do what I'm doing and pay off my debts in over 7 years, or do something different. The alternative option happened to be 4 years, and I'm glad I chose the alternative choice, because I would most likely still be on that 7 year plan or longer.
So, are you keeping on top of your New Year's resolution to get out of debt? What if you received a large tax return (thank you kids)? What would you do with it if you have debt? Would you go out and purchase something that would potentially get you into more debt, or would you go purchase something that you've been wanting for a long time, or would you put it towards one of your debts?
Well, if you look at the action plan below for my financial situation, what would you do? As you can tell, the program is prompting me to transfer $6,802.05 to my MBA loan. This is all based on my income, expenses, balance of my loans, interest rates, time to pay off debts, etc. Because I know I have 1.7 years to pay off all my debt based on following the program, I plan on following this recommendation. Can I choose to put my money towards a new entertainment center, tools, etc? Sure, but I have a goal, and that goal is to be debt free, and if I were to spend my money on something else, then the time it would take to pay off my debt would obviously increase, and if I kept doing that each time I earned extra money, or a bonus, etc, I would never end up paying off my debt. I can't wait to be financially free and this program will help me get there. It's nice to have a plan of action, and to have a program tell me, down to the penny, how much I should put towards debt to get out of debt in the most mathematically way possible.
Watch the following videos to learn how you can get out of debt too and finally become financially free!
I never fully listened to my grandfather's advice. I remember he told me once that he has never paid late fees or interest on a credit card. He always paid off the money he used because he considered borrowing a blessing. He grew up in the Great Depression, born in 1921. His jobs growing up paid meager wages, and he learned to save and only spend for things he needed.
Never did he own anything fancy.
He gave away what he didn't consider a family necessity.
Family and taking care of family needs were his top priorities.
He donated what he could to those who were less fortunate.
He fully understood, "because I have been given much I too must give".
He didn't take advantage of anyone, nor was he ever dishonest in his dealings with his fellow men.
His financial decisions serve as a great reminder to me to budget wisely, save for necessities, and ensure that I provide for my family and it's well-being.
I've done an ok job of managing finances and following his advice, but there is so much more to improve on. He was smart enough to avoid debt and live resourcefully. I'm sure he never would have needed a service such as Speedy Debt Repo but today, money is managed differently, millions of people are in debt, and great examples
So, now that 2014 is behind you, what goals do you have in mind? Are any of those goals financially focused? Here are four financially-focused goals for 2015 if you don't have any already in mind.
1. Educate Yourself About Personal Finance
From 401K plans at work, to managing a budget, or determining how much money to put towards savings or children's education funds, make it a goal to educate yourself more about personal finance. How do taxes play into your financial situation? What should you do when you get a year-end bonus check? How can you improve your credit score? Learn how to pay off your debt as quickly as possible.
Whatever it is, start now so you're not another year behind!
2. Increase Your Net Worth
What is net worth? It's the total of your assets minus your liabilities. Assets are the things you own and can include your retirement plans, stocks you own, Health Savings Account (HSA), checking and savings accounts, etc. Liabilities are all your debts such as loans, credit card balances, mortgage balances, etc. Whatever is left over is your net worth, so if it's in the negative, which for many US households is the case, than make it a priority to increase your net worth.
Track how much is going towards paying off your debt and how much is going (not going) towards increasing your assets. Maybe put another percentage worth of your income into your 401K plan, maybe go out to fast food or dinner 1 less time. Every little bit helps.
3. Create a Plan to get out of debt
Check out my previous blog post on creating a plan to get out of debt. Create a spreadsheet, use Excel or Google sheets to create a financial plan, or a robust program such as the Worth Account to help you do it all.
4. Increase Your Income
Have you asked for a raise? Have you tried negotiating your income? Have you had a performance review at work last year and didn't get the raise you felt you deserved? Maybe try working on negotiating skills to help you negotiate a better raise next time that performance review comes around. Although your employer may not have the funds to give the raise you request, most will respect the fact that you are inquiring about a raise. Look into taking on additional responsibilities so that you'll become more noticed at work to become a potential candidate for a promotion. Any increase in income will help your financial situation. One great book that has helped me with salary negotiation Negotiating Your Salary: How to Make $1000 a Minute. This book goes into great detail on how you can negotiate your salary to help increase your income, and I highly recommend the read.
These four examples will hopefully give you a start on accomplishing some new financial goals for 2015
So, as year 2015 gets closer, it's time for me to choose a new Health Insurance Plan or stick with the one I have. I'm fortunate enough to work for an employer who provides really great coverage, regardless of which plan I choose, but I'm still left with deciding which plan will fit my situation the best.
One plan has a small deductible and copays but the monthly cost is higher. The other plan incorporates a company-sponsored HSA with contributions by my employe, has a lower monthly fee, but has a high deductible and all doctor visits must be paid in full until the deductible is met.
So, I'm left with a difficult financial situation that could have an effect on my other debts if I don't analyze my options.
What would you choose?
You have a family of 7 (5 children, 2 adults).
When going over your family budget, it's important to take into consideration all the costs and family situation to determine what plan will most likely cost you more out-of-pocket within the calendar year. Creating a budget based on solid health insurance planning will help you avoid unnecessary debt, or having to put expenses on a credit card.
What's awesome about the program Speedy Debt Repo provides is you can actually plug in both scenarios into your action plan and determine which solution will end up costing you more not only short term, but long term.
If you're interested in how I analyzed the two plans and which solution I arrived at, feel free to contact me, I'd be happy to help you out if you face a similar situation.
Shane D. Sorensen, MBA
Hi. Thanks for checking out my blog! I decided to blog my experience with the Money Max Account while offering other helpful, financial advice. I hope what I share proves useful.