Is a Debt Consolidation loan the answer? Plus, tips to staying out of debt

Friday, February 2nd

Is a Debt Consolidation loan the answer to getting you on the path to financial freedom?
It can be, BUT not all Debt Consolidation companies are the same we'll let you know what to watch out for. 

Plus, we'll give you a few tips you can implement today to help you get out of debt and stay out of debt.

Thanks to our friends at Family First Credit Union for supporting the $even Figure$ podcast!  
When it comes to financial education, earning and learning go hand-and-hand, and Family First is here to help you and the Greater Rochester community with both! 

https://home.familyfirstny.com

00:16:08

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Welcome to seven figures in all the information may you'd need to dominate your finances because when you aren't in control it feels. Good not having to stress but how are you get paid at expelled I see any letters thank you so much for being here thank you for taking the time to listen to the podcast. Ice on an article lot MarketWatch CEMIG credit card debt reached a new high end of June 2017. And delinquencies on credit card balances are expected to rise this year despite an improving economy. Today households that do have credit card debt and it's well over 151000 dollars according to her wallet. OK you don't need any more statistics I know you get it. If you're living it then you 100%. Understand how tough it is how tough it is to get out of debt. Because it piles on quake in whatever their reason was that you got here. It does it matter at this point you might change things you might turn things around so what are your options. Is it a debt consolidation mound we cash in his weekly Jody are free gas and gene sweet loan officers at family first credit union. Thank you so much for taking time to help us get out of debt because we are having I think you are right hand. I think wanna focus on two main things. Debt consolidation. In what we continue to DA to stay out of dat so let's first tackle that consolidation loans by new we know that we should even entertain this idea. I think most people obtain a debt consolidation loan when they either have too many bills they're paying and they're not liking to a the ratings tax or going online and in pain. Many bills some people see their interest rates are very high and the credit cards most people pay Tony or point 9% or even greater. So they see that and then they thank I gotta get rid events they just feel they don't have enough cash flow to cover their everyday expenses. Does everybody qualify for a debt consolidation loaner had the dollar. Not everyone will qualify and fortunately com. It comes down to affordability and credit score we will do a debt consolidation. For someone in the low six hundreds five height five hundreds. If it puts them into a batters. It's it's really a case by case. You know look at the big picture. If the debt consolidation loan is good for them financially. Meaning it'll lower their monthly. Output. You know the payment from a loan would be less than what they're paying at all those minimums in the credit cards. It's kind of like a no brainer you know it's gonna put him into a better spot and get them a little bit more net disposable income each. What bills can you clump together you could give credit card she could do some you know installment loans they're some finance companies out there right now that are. Pretty popular where the wind really high payments and high interest rates that people take on. Spur of the moment I need desk quit. Cash sort of thing that we can rolling to a technicality should vote. When you hear Jack consolidations you it's it's such feel like it's an overused term. Because now there's people and companies who are claiming to help you get out of debt but it's. That's not really cheer benefit do your research and you know see if there's any negative comments about those companies has. They do charge fees. So you have to look at you know how much is it gonna cost is this really at a benefit by paying this fee along with you know my monthly payment. And some of these companies which have gotten themselves in trouble. They tell you not to make any payments had any of your credit cards send us the money and then they pull the money together. And then they they negotiate with the credit card company make a settlement you know if you have like say a 2000 dollar balance can we settle for her 12100. And then they pulled together 12100 dollars. And then paid paid yet. Creditor off but meanwhile your other cards or loans could be going delinquent. Snow. Com there's a few companies that got in trouble and were shut down because of that really commits too good to be true gas these. Probably if it sounds too good to Beecher rather ask definitely. I mean other fees there's going to be fees attached to a debt consolidation loan even through your institution now and a not I'm not just an interest. Okay and then interest rates mean the goal is to lower the interest rates I have all these credit cards with 24 point whatever crazy percent. Our interest they would be probably half of that I can critics who are even lower yeah Harry even lower yes. How long did it take longer to pay off then and. Yeah and nine times out of ten it's gonna take you shorter to pay enough because it's can be fixed term. Up to sixty months apart on which is five years you know so someone and who is just paying minimum tax credit card check would take them ten to fifteen years to pay out that immigrants not using. But if they're continually lose ground up was it I'm never gonna tell whereas. Switching net debt and sued the debt consolidation loan and there's a finite and two. You know five years and the debts got. One thing that we do request of those that we do Idec and Ford is that they do not take any additional back out there let me have. Which kinda helps them to create better hand it. During the course of that. It's an adjustment it's a behavior adjustment more than it is a mathematical equation gets you out of debt you have to rework the way you feel about money the way you view money and it's how you spend yeah. So let's run through that top things that we can do today to change your behavior. And avoid. Future debt look at their daily habits as this can say tricks they're spending distract the spending are you buying coffee in the morning are you buying launched. I mean those are the two. Biggest I think abusers when I look at statements. You know whether it's their checking account and Poconos and account statement there where they use their debit card. Or their credit card statement credit card statements or find that the groceries. Were purchased with a credit card. That's fine if you're trying to earn points on your credit card. But pay it off designs you pay it off gas is gas you know I. I compared to week we often at the first of the air around this time on T clutter our closets I can donate as much as we can. We need to deep clutter our finances as well cracked. Because sometimes you're paying for something a subscription to something you forgot you even have. You never use. That is huge and it when I'm working with people that will go down we'll say. And he is that's what is that you know and it allowed nine times out of ten they can't tell me. And I need this phone number here you need colony needs to stop its home gym membership the ass okay not using a gym membership. Another one as apps on the phone yes it on the nineteenth. Via you know they're addicted to their gaming apps and so they're always you find. When 1990 or 99 any cannot get out like a hundred dollars man's mind. You justify because they start off a small little amounts what's with the dollar 99 gas that's not what about auto bill pay. I would recommend that if they have a good. My jet. I got an and that there had grant turner you know of their finance it's pretty bad. I'm auto paint things this guy and her writing you can if you're definitely gonna have money in medic counter acts yeah. Otherwise she'll incur fees yeah. I lake when my members will go right to the website of the bill that they're paying to pay that way and then they have a little bit more control of my biggest thing is sun about to know where your money goes each week if you're paid weekly or biweekly. We then a month timeframe. You know make make a list of all those bills that you pay. And make sure that they're paying and then you can half. It is an ITE. This but it is so important and it's very important to know where your money goes in to make sure that that rent gets paid and again. Short term and long term if you say you need a new bad. That's a short term then you know financial. If or if you wanna take a vacation. In three years surely take Finley to Disney World. And that's a long term five years you want to retire yeah you know that's another good long term cool that you need to prepare for. I think got a big line. Bed and cool. Is really a don't you feel yeah you know I really want and doing you gotta agree to let you married her with somebody another tool that I like together of people that I work with as a financial counselor as an accountability partner. You know spouse more appear right if you find that you're just not quite make an aunt and you haven't got a handle on things. And maybe you don't wanna commend so that credit union tour of the financial contract Jimmy near a little embarrassed I'm somebody who. You can hand and honest conversation women. You don't become an accountability partner went and help each other. Mendes spouses should always be. Eight. One shouldn't die in one not know what the hack scorn on with a much better how the bills or pay and it should be. I join after her camp where that cup well you know with the spouses. I'm still making those decisions together and how to spend the money and where those then you know what it's paid each week. Is also part of their accountability what you can do it but at least everybody has in the now on the same page yeah acts. If your determined. It to make those financial changes within your life you're gonna. You're gonna get those good habits established to rare. If you next title little that you're going to be able to kick yourself on the button to yourself yeah yeah yeah now because you're like I've already done that I know wanna do this again and so. And that's where an accountability partner Jewish house while CDO. No we're not gonna do that you know. One final thing that I would add to this is set money aside now in your Roth IRA in your Carling OK in your HSA and it. Yes aren't on that yes absolutely the littlest amount. I noticed people are you know we'll get emails and feedback from listeners and sometimes they think you need big sums of money to pour into your 40 and how you or. You surprised at that little eyes at how low will grow over years every time they get array is they should do 1% more gas. There you go down easy Il government sat. 1% raise in your 401K every tech you know a 1% increase every ten. You get a Reyes in the government's anti money though my receipt if they're young and they Hanna high deductible health plan. They should be next thing out yet HS day and re air. And it'll just build up and build up and build up a friend Aaron and then they can put it into. A money market within their HSA. You know or even if there are no prevention and yeah because it rolls over to their money attack it's it's a good. Great accept you need to finally for supplementing your Social Security don't just count on that crack your. Aren't any personal. Financial stumbles that you guys have faced that we can learn from. I have personally. My husband has lost his job. A few years ago and still has not worked so on the sole breadwinner. And I've really had to watch on how we spend the money in in by today had to change everything. So. Those are my my stumble so might I spending. You know as we discussed earlier you don't buy the morning coffee. I wasn't a one spire but I wouldn't be enjoyed by. I don't go out to dinner I don't go to the movies so UH is you have like the bat in your desk at back yes. My husband actually lost his job. Mean Charlie twenty years ago the factory closed re elect sell arms he was actually on unemployment back and they would send you school so he opted to go to school law so he was on unemployment for two years. Where we had to adjust our spending has our belt and on we sit down and we crunch some numbers when he got time for him to be rehired and we knew. Where he had to be you know income why is fresh today keep. Making our monthly bills sell and I knew we had a young daughter at the time so it was you know tightening our belts and you know my mom and dad paid. Everything is yet now he's. Oh yeah and then we gave my mom and dad yeah I'm sure you know is so large interest they did not cop. I guess they encourage you and you cash and if you're careful when you know you do the math then yes figure well. This where you need to be you know yes and we about it and want followed played ball ahead. I face yeah little bumps in the route that you can make it through now what does he and Justin before we and that's exciting things happening at Stanley first upcoming exciting things. While we're opening are reopening our Henrietta branched out in new remodel and panel. The camping on February 10. I don't mean big grand reopening and I thank you have both been working with Stanley first forever yes I've been there it'll be in May 34 years. So I seen a lot of growth a lot of changes around throughout the year and a lot of new members some shower yes number and it's probably. Compared to Jeanne I've been there very short time ten year is that I'm very excited we're coming up on 151000. Members now. So yeah so we're excited about them we get Carney. And I love and then I love men we'll pay you so much does CNN February 10 done and the grand reopening and Henry at a family first credit union guys are always great supporters of financial education in the podcast so I appreciate you guys. And pay you so much for how Vanessa get out of debt dancer well. Oh you're welcome thanks for having us. Now we columns to the Mike and my dad and ever since I was a little girl he would have clean concise advice about finances. It's Father Knows Best my dad did as adults have a great weekend dominate your finances. We all enjoy a good restaurant meal. And who doesn't want to avoid. And necessary work to prepare your home cooked meal fit in recent years Americans actually started spending more in bars and restaurants. Been meted out buying groceries. That trend seems to correlate with the lower savings rate. So if you're looking for an opportunity to build an emergency fund. He cut back on dining out test for her more meals at home.
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