proejct debt-o-nation

© 04/12/23 National Financial Education Centerat Debt Reduction Services

www.NationalFinancialEducationCenter.org

ProjectProject

Household Household Finances for Debt-Finances for Debt-

Proof LivingProof Living

DEBT-o-nation

Why We’re the Experts

Nationwide, non-profitNationwide, non-profit

Why We’re the Experts

Nationwide, non-profitNationwide, non-profit

Headquartered in Boise,Idaho since 1996Headquartered in Boise,Idaho since 1996

Why We’re the Experts

Nationwide, non-profitNationwide, non-profit

Headquartered in Boise,Idaho since 1996Headquartered in Boise,Idaho since 1996

Financial educatorsFinancial educators

Outline of Session

Managing Money (the “B” Word)Managing Money (the “B” Word)

Understanding DebtUnderstanding Debt

Dealing with Current DebtDealing with Current Debt

Avoiding & MinimizingFuture Debt

Avoiding & MinimizingFuture Debt

Signs of Financial Trouble

NoSavings

Signs of Financial Trouble

NoSavings Minimum

Payments

Signs of Financial Trouble

NoSavings Minimum

Payments

Payday Loans

Signs of Financial Trouble

Minimum Payments

Payday LoansOvertime

Signs of Financial Trouble

Statement? What

Statement?

Payday LoansOvertime

Signs of Financial Trouble

DeclinedCardStatement?

What Statement?

Overtime

Signs of Financial Trouble

DeclinedCard

Borrow from

FamilyStatement?

What Statement?

Signs of Financial Trouble

DeclinedCard

Borrow from

Family

20%+ to

Loans

Signs of Financial Trouble

Borrow from

Family

20%+ to

Loans

Delay Doctor Visits

Signs of Financial Trouble

“What if” Insomnia

20%+ to

Loans

Delay Doctor Visits

First Steps to Debt-proof Living?

First Steps to Debt-proof Living?

Stop the SlideStop the Slide

First Steps to Debt-proof Living?

Stop the SlideStop the Slide

Spending PlanSpending Plan

First Steps to Debt-proof Living?

Stop the SlideStop the Slide

Spending PlanSpending Plan

Spending HabitsSpending Habits

Self-Affirmation

Please Repeat After Me:Please Repeat After Me:

Self-Affirmation

I Live by a Budget!I Live by a Budget!

Please Repeat After Me:Please Repeat After Me:

Self-Affirmation

I Live by a I Live by a Budget!Budget!

Please Repeat After Me:Please Repeat After Me:

Self-Affirmation

I Live by a I Live by a Budget!Budget!

Please Repeat After Me:Please Repeat After Me:

We’re ALL Spenders

ConvenientConvenient “I don’t have

time to shop around!”

We’re ALL Spenders

Entitled

EntitledConvenientConvenient

“I deserve this!”

We’re ALL Spenders

Compensatory

Compensatory

Entitled

EntitledConvenientConvenient

“This Is Who I Am!”

We’re ALL Spenders

HabitualHabitual

Compensatory

Compensatory

Entitled

EntitledConvenientConvenient

“Shopping Is Fun!”

We’re ALL Spenders

Impulse

Impulse

HabitualHabitual

Compensatory

Compensatory

Entitled

EntitledConvenientConvenient

Got to Have It NOW!

We’re ALL Spenders

Impulse

Impulse

HabitualHabitual

Compensatory

Compensatory

Entitled

EntitledConvenientConvenient

SalesSales

“But it’s 75% off!

We’re ALL Spenders

Impulse

Impulse

HabitualHabitual

Compensatory

Compensatory

Entitled

EntitledConvenientConvenient

DISCIPLINED

DISCIPLINED

SalesSales

I’m in control of my money

Managing Debt

Regardless of the reason…

……Debt Happens!Debt Happens!

Managing Debt

Major Event-Causes of Debt:

Managing Debt

1. Job Loss or Income Reduction

Major Event-Causes of Debt:

Managing Debt

1. Job Loss or Income Reduction

2. Medical Bills

Major Event-Causes of Debt:

Managing Debt

1. Job Loss or Income Reduction

2. Medical Bills3. Divorce

Major Event-Causes of Debt:

Managing Debt

1. Job Loss or Income Reduction

2. Medical Bills3. Divorce4. Death of a Spouse

Major Event-Causes of Debt:

Managing Debt

1. Job Loss or Income Reduction

2. Medical Bills3. Divorce4. Death of a Spouse5. Car Repair

Major Event-Causes of Debt:

Managing Debt

1. Job Loss or Income Reduction

2. Medical Bills3. Divorce4. Death of a Spouse5. Car Repair6. Law suit

Major Event-Causes of Debt:

Managing Debt

1. Job Loss or Income Reduction

2. Medical Bills3. Divorce4. Death of a Spouse5. Car Repair6. Law suit7. Gambling/Addiction

Major Event-Causes of Debt:

Managing Debt

Major Mentality-Causes of Debt:

Managing Debt

1. Impatient: We Overspend

Major Mentality-Causes of Debt:

Managing Debt

1. Impatient: We Overspend2. Overconfident: We Use

Credit Cards Unwisely

Major Mentality-Causes of Debt:

Managing Debt

1. Impatient: We Overspend2. Overconfident: We Use

Credit Cards Unwisely3. Negligent: We Don’t

Manage Our Money

Major Mentality-Causes of Debt:

Managing Debt

1. Impatient: We Overspend2. Overconfident: We Use

Credit Cards Unwisely3. Negligent: We Don’t

Manage Our Money4. Complacent: We Have No

Emergency Savings

Major Mentality-Causes of Debt:

Managing Debt

Married? Work on $$$ Together!

Don’t argue!Agree on Common

Goals!

Managing Debt

Prioritize your DebtsHome & Auto Repossession &

ForeclosureWork in “good faith”Contact HUD counselor

Managing Debt

Contact Your Creditors BEFORE they send you to collections.•Modified Payment Plan.

Self Help Is Sometimes Best

• Change credit cards due dates to coincide with paydays

• Use online banking

service and pay bills online.

Self Help Is Sometimes Best

Consider major Consider major changes changes

BEFORE they BEFORE they are forced are forced upon you.upon you.

Tips for Attacking the Debt

More $ You Send•Sooner You Pay Off•Less You Pay

Tips for Attacking the Debt

Finding “FREE Money”20% unaccounted for

Tips for Attacking the Debt

• 10% of controllable expenses. Possibly $50-$100.

• Send off EVERY month!• “Snowball” into otherpayments until you’reDEBT FREE!!!

PowerCashPowerCashEarly Payoff and/or Big SavingsEarly Payoff and/or Big Savings

For a credit card balance of $15,000 at 14% here’s the difference:

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

What Difference Can $50 Make?

For a credit card balance of $15,000 at 14% here’s the difference:

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

What Difference Can $50 Make?

20 Years & $10,000 in Interest!!!

For a credit card balance of $15,000 at 14% here’s the difference:

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

What Difference Can $50 Make?

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$481/moPaid off in 3 yrs

$123K+ in Savings

For a credit card balance of $15,000 at 14% here’s the difference:

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

What Difference Can $50 Make?

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$481/moPaid off in 3 yrs

$170K+ in Bonds

For a credit card balance of $15,000 at 14% here’s the difference:

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

What Difference Can $50 Make?

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$481/moPaid off in 3 yrs

$230K+ in Stocks

For a credit card balance of $15,000 at 14% here’s the difference:

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

What Difference Can $50 Make?

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

$15,000

$30,000

$75,000

$120,000

$165,000

$210,000

$255,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Minimum PowerCash & SavingsPowerCash & Bonds PowerCash & Stocks

Over 17 Years…

Over 17 Years…

You CONTRIBUTE $98K

You CONTRIBUTE $98K

Your Money GENERATES

Your Money GENERATES

$25,000-$135,000+ Additional !!!

$25,000-$135,000+ Additional !!!

Different Repayment Methods for Different Individuals, by…

Tips for Attacking the Debt

1. Importance of Debt

Different Repayment Methods for Different Individuals, by…

Tips for Attacking the Debt

1. Importance of Debt

2. Interest Rate (highest first)

Different Repayment Methods for Different Individuals, by…

Tips for Attacking the Debt

1. Importance of Debt

2. Interest Rate (highest first)

3. Size of Debt (smallest first)

Different Repayment Methods for Different Individuals, by…

Tips for Attacking the Debt

Debt Repayment Plan

Creditor Current Balance APR

Years to Payoff

Minimum Monthly Payment

Total Payout

1. Enter information2. Prioritize: Property, APR, or Balance

Gas $500 19.9% 3¼ yrs $25 $670

Visa $5,000 15.9% 19¾ yrs $125 $10,220

Store $1,500 24.9% 6¾ yrs $75 $2,440

Car $15,000 9.9% 5 yrs $318 $19,080

TOTALS $22,000 19¾ yrs $543 $32,410

1. Enter information2. Prioritize: PropertyProperty, APR, or Balance

Debt Repayment Plan

Creditor Current Balance APR

Years to Payoff

Minimum Monthly Payment

Total Payout

         Gas $500 19.9% 3¼ yrs $25 $670

Car $15,000 9.9% 5 yrs $318 $19,080

Store $1,500 24.9% 6¾ yrs $75 $2,440

Visa $5,000 15.9% 19¾ yrs $125 $10,220

TOTALS $22,000 19¾ yrs $543 $32,485

Advantage:Advantage: ProtectionProtection

1. Enter information2. Prioritize: PropertyProperty, APR, or Balance

Debt Repayment Plan

Creditor Current Balance APR

Years to Payoff

Minimum Monthly Payment

Total Payout

         Gas $500 19.9% 3¼ yrs $25 $670

Car $15,000 9.9% 5 yrs $318 $19,080

Store $1,500 24.9% 6¾ yrs $75 $2,440

Visa $5,000 15.9% 19¾ yrs $125 $10,220

TOTALS $22,000 19¾ yrs $543 $32,485

Creditor Current Balance APR

Years to Payoff

Minimum Monthly Payment

Total Payout

Store $1,500 24.9% $75

Gas $500 19.9% $25

1. Enter information2. Prioritize: PropertyProperty, APR, or Balance

Debt Repayment Plan

Visa $5,000 15.9% $125

Car $15,000 9.9% $318

+$50 +$50 PowerCashPowerCash

1.1 Yr

1¼ Yr

2.6 Yrs

3.8 Yrs

$125

Creditor Current Balance APR

Years to Payoff

Minimum Monthly Payment

Total Payout

Store $1,500 24.9% $75

Gas $500 19.9% $25

Advantage:Advantage: Save Time & $$$Save Time & $$$

1. Enter information2. Prioritize: PropertyProperty, APR, or Balance

Debt Repayment Plan

Visa $5,000 15.9% $125

Car $15,000 9.9% $318

You’ll Spend This Much Less:$5,070

1.1 Yr

1¼ Yr

2.6 Yrs

3.8 Yrs

$125

Creditor Current Balance APR

Years to Payoff

Minimum Monthly Payment

Total Payout

         Visa $5,000 15.9% $125

Gas $500 19.9% $25

1. Enter information2. Prioritize: PropertyProperty, APR, or Balance

Debt Repayment Plan

Store $1,500 24.9% $75

Car $15,000 9.9% $318

+$50 +$50 PowerCashPowerCash

½ Yr

1¼ Yr

2.6 Yrs

3.8 Yrs

$75

Creditor Current Balance APR

Years to Payoff

Minimum Monthly Payment

Total Payout

         Visa $5,000 15.9% $125

Gas $500 19.9% $25

Advantage:Advantage: See It Sooner - Stick to ItSee It Sooner - Stick to It

1. Enter information2. Prioritize: PropertyProperty, APR, or Balance

Debt Repayment Plan

Store $1,500 24.9% $75

Car $15,000 9.9% $318

$5,046 LESS than Minimums & Just $24 MORE than APR

½ Yr

1¼ Yr

2.6 Yrs

3.8 Yrs

$75

What if I need “outside” help?

Several options: Look for…

•Reputation•Established (not “fly by night”)•Better Business Bureau history•Audited and accredited•Written contracts & agreements•Discloses all fees

Isn’t Credit Counseling Damaging?

Disclaimer: I am a credit counselor

Isn’t Credit Counseling Damaging?

Disclaimer: I am a credit counselor

Clearing Up Misconceptions:• Repay debt “$-4-$”• DON’T Settle Amounts• NOT a Chapter 13 Bankruptcy• TEMPORARY Credit Notation • Prohibits credit cards for NOW• No direct FICO impact

Financial Danger Zone

Quick & Easy=ExpensiveQuick & Easy=Expensive

Financial Danger Zone

Quick & Easy=ExpensiveQuick & Easy=Expensive

TITLETITLE

RENTRENTTOTO

OWNOWN

PAYDAYPAYDAY

Financial Danger Zone

Other Damaging OptionsOther Damaging Options

Financial Danger Zone

Other Damaging OptionsOther Damaging Options

BANK-BANK-RUPTCYRUPTCY

IGNORING IGNORING DEBTDEBT

DEBT DEBT SETTLE-SETTLE-

MENTMENT

Scams & Rip-Offs

Credit Increase

•Calls•Asks for Card # or Soc Sec

•Ask for Card’s Security #

Scams & Rip-Offs

Collections & Cards

•Shift Debt to Credit Card

Credit Increase

•Calls•Asks for Card # or Soc Sec

•Ask for Card’s Security #

Scams & Rip-Offs

Collections & Cards

Craig’s List

•Low Low Price

•eBay Motors

•PrePay & Lose $$$

•Shift Debt to Credit Card

•Calls•Asks for Card # or Soc Sec

•Ask for Card’s Security #

Credit Increase

Scams & Rip-Offs

Credit Increase

Collections & Cards

Craig’s List

Other

•Low Low Price

•eBay Motors

•PrePay & Lose $$$

•Shift Debt to Credit Card

•Too Good to Be True?

• IT IS!!!

•Calls•Asks for Card # or Soc Sec

•Ask for Card’s Security #

Staying Out of Debt

•Budget, budget, budget, budget, budget, budget, budget, budget, budget, budget …

Staying Out of Debt

•Spend LESS and Earn MORE

Staying Out of Debt

•Save for a rainy day

Staying Out of Debt

•Trusted outside help

© 04/12/23 National Financial Education Centerat Debt Reduction Services

www.NationalFinancialEducationCenter.org

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