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



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



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


NoSavings Minimum

Payments


NoSavings Minimum

Payments

Payday Loans


Minimum Payments

Payday LoansOvertime


Statement? What

Statement?

Payday LoansOvertime


DeclinedCardStatement?

What Statement?

Overtime


DeclinedCard

Borrow from

FamilyStatement?

What Statement?


DeclinedCard

Borrow from

Family

20%+ to

Loans


Borrow from

Family

20%+ to

Loans

Delay Doctor Visits


“What if” Insomnia

20%+ to

Loans

Delay Doctor Visits

First Steps to Debt-proof Living?


Stop the SlideStop the Slide



Spending PlanSpending Plan



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!


Self-Affirmation

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


We’re ALL Spenders

ConvenientConvenient “I don’t have

time to shop around!”


Entitled

EntitledConvenientConvenient

“I deserve this!”


Compensatory

Compensatory

Entitled


“This Is Who I Am!”


HabitualHabitual

Compensatory

Compensatory

Entitled


“Shopping Is Fun!”


Impulse

Impulse

HabitualHabitual

Compensatory

Compensatory

Entitled


Got to Have It NOW!


Impulse

Impulse

HabitualHabitual

Compensatory

Compensatory

Entitled


SalesSales

“But it’s 75% off!


Impulse

Impulse

HabitualHabitual

Compensatory

Compensatory

Entitled


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


Managing Debt


2. Medical Bills


Managing Debt


2. Medical Bills3. Divorce


Managing Debt


2. Medical Bills3. Divorce4. Death of a Spouse


Managing Debt


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


Managing Debt


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


Managing Debt


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


Managing Debt

Major Mentality-Causes of Debt:

Managing Debt

1. Impatient: We Overspend


Managing Debt

1. Impatient: We Overspend2. Overconfident: We Use

Credit Cards Unwisely


Managing Debt


Credit Cards Unwisely3. Negligent: We Don’t

Manage Our Money


Managing Debt


Credit Cards Unwisely3. Negligent: We Don’t

Manage Our Money4. Complacent: We Have No

Emergency Savings


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


Finding “FREE Money”20% unaccounted for


• 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?


$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


$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



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


$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


$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



$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


$481/moPaid off in 3 yrs

$123K+ in Savings


$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


$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



$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


$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



$170K+ in Bonds


$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


$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



$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


$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


$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



$230K+ in 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


$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



$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


$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


$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


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…


1. Importance of Debt




2. Interest Rate (highest first)




2. Interest Rate (highest first)

3. Size of Debt (smallest first)



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


Years to Payoff


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


Debt Repayment Plan


Years to Payoff


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


Years to Payoff


Total Payout

Store $1,500 24.9% $75

Gas $500 19.9% $25


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


Years to Payoff


Total Payout

Store $1,500 24.9% $75

Gas $500 19.9% $25

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


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


Years to Payoff


Total Payout

Visa $5,000 15.9% $125

Gas $500 19.9% $25


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


Years to Payoff


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


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


Quick & Easy=ExpensiveQuick & Easy=Expensive

TITLETITLE

RENTRENTTOTO

OWNOWN

PAYDAYPAYDAY


Other Damaging OptionsOther Damaging Options


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



Scams & Rip-Offs

Collections & Cards

Craig’s List

•Low Low Price

•eBay Motors

•PrePay & Lose $$$




Credit Increase

Scams & Rip-Offs

Credit Increase

Collections & Cards

Craig’s List

Other

•Low Low Price

•eBay Motors

•PrePay & Lose $$$


•Too Good to Be True?

• IT IS!!!



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

Thank You for Being Here!

National HeadquartersNational Headquarters6213 N Cloverdale Rd6213 N Cloverdale Rd

Ste 100Ste 100Boise, ID 83713Boise, ID 83713(877) 688-3328(877) 688-3328

proejct debt-o-nation

Documents

debt impatient

current debt

reason debt

debt major eventcauses

debtproof living debt

debt job loss

debt major mentalitycauses

youre debt free