debt to dollars © the money professors (tm) 2013 career and technical education summer conference...

Debt to Dollars

2013 Career and Technical Education Summer Conference

Len Rhodes M.B.A. C.P.F.M.

Mark C. Weitzel M.B.A. C.P.F.M.

July 25, 2013

Debt to Dollars

My First Credit Card $1500 Balance, $25 Minimum Payment 18.99% Interest Rate

Debt to Dollars

My First Credit Card $1500 Balance, $25 Minimum Payment 18.99% Interest Rate 16 Years to Pay Off

Debt to Dollars

My First Credit Card $1500 Balance, $25 Minimum Payment 18.99% Interest Rate 16 Years to Pay Off It Gets Worse $25 X 12 X 16 = $4800

Debt to Dollars

My First Credit Card $1500 Balance, $25 Minimum Payment 18.99% Interest Rate 16 Years to Pay Off It Gets Worse(er) $25 X 12 X 16 = $4800 $25 PMT at 9.6% APR for 16 Years =

$11,300

Debt to Dollars

My First Car Loan

$291 PMT

5 Years 12.25% APR

= $13,000

- 25 PMT

MasterCard PMT

$266 PMT

5 Years 13.65% APR

= 11,522

COST $ 1,478

Debt to Dollars

My First Car Loan

$291 PMT

5 Years 12.25% APR

= $13,000

- 25 PMT

MasterCard PMT

$266 PMT

5 Years 13.65% APR

= 11,522

COST $ 1,478

Debt to Dollars

My First Car Loan

$291 PMT

5 Years 12.25% APR

= $13,000

- 25 PMT

MasterCard PMT

$266 PMT

5 Years 13.65% APR

= 11,522

COST $ 1,478

Debt to Dollars

My First Car Loan

$291 PMT

5 Years 12.25% APR

= $13,000

- 25 PMT

MasterCard PMT

$266 PMT

5 Years 13.65% APR

= 11,522

COST $ 1,478

Debt to Dollars

My First Mortgage

$1,200 PMT

30 Years

6.25% APR =$194,895

- 266 PMT

Car PMT

- 75 PMT MasterCard PMT

$ 859 PMT

30 Years

6.75% APR =132,440

COST $62,455

Debt to Dollars

My First Mortgage

$1,200 PMT

30 Years

6.25% APR =$194,895

- 266 PMT

Car PMT

$ 859 PMT

30 Years

6.75% APR =132,440

COST $62,455

Debt to Dollars

My First Mortgage

$1,200 PMT

30 Years

6.25% APR =$194,895

- 266 PMT

Car PMT

$ 859 PMT

30 Years

6.75% APR =132,440

COST $62,455

Debt to Dollars

My First Mortgage

$1,200 PMT

30 Years

6.25% APR =$194,895

- 266 PMT

Car PMT

$ 859 PMT

30 Years

6.75% APR =132,440

COST $62,455

Debt to Dollars

My First Mortgage

$1,200 PMT

30 Years

6.25% APR =$194,895

- 266 PMT

Car PMT

$ 859 PMT

30 Years

6.75% APR =132,440

COST $62,455

Debt Takes Away Our Choices

Why Do We Borrow?

We don’t control our spending

Why Do We Borrow?

Consolidating is NOT paying off.

Why Do We Borrow?

Consolidating is NOT paying off.

Approval Affordability

Why Do We Borrow?

Why Do We Borrow?Reasons for Indebtedness

Keeping up with the Joneses

The use of money to punish.

Need for instant gratification.

The expectation of instant comfort among young couples who overuse the installment plan.

Why Do We Borrow?Reasons for Indebtedness

Lack of communication among family members.

The amount of finance charges is too high.

We are mentally trained to spend.

Overindulgence of children.

Defeating Debt

You are never in too deep to lose hope! You can pay off $10,000 of debt in less

than 2 years with just a part time job!

Defeating Debt

You are never in too deep to lose hope! You can pay off $10,000 of debt in less

than 2 years with just a part time job! Common strategies:

Pick up a part time job (taxes) Sell stuff on eBay or Craig's list Become a smarter consumer Above all else… stop borrowing!

Defeating Debt

Assess your current debts (list or work

in Excel)

Who do you owe?

How much do you owe?

What is the interest rate?

What is your monthly payment?

Defeating Debt

Contact your credit card company(ies)

Ask for rate reduction

Ask to speak to a manager or customer

retention specialist

Move money to a lower rate card

Beware of transfer fees

– Start with the smallest debt (easiest

– Start with the highest interest rate

(financial)

Defeating Debt

There are 3 ways to eliminate debt

Just pay them off naturally (most expensive)XX

Defeating Debt

Pay off your first debt faster

Now you can add the previous payment

to the next debt

Don’t get discouraged…look for the

tipping point

Defeating Debt

What happens when we add extra

money onto the minimum

payment.

• The Tipping Point

The key is to focus on one debt at

Defeating Debt

The 50% Solution

Aggressively pay off debt while

giving yourself a break

After each debt is paid off, enjoy

50% of the extra and use the other

50% towards your Debtor-ADE

Defeating Debt

Control Spending

Envelope System (cash-based)

Create one envelope per category to track

Put monthly amount in at the beginning of the

month (if possible) or with each paycheck

Only pull money out of the envelope for that

category – when its gone, you’re done! Simple!

Debt to Dollars

Go home today and list your debts

Start tracking your total balances each

month on paper

Use at least one of the Debtor-ADE strategies

Raise cash to retire debt

Add to the minimum

Highest interest rate

Lowest Balance

Debt to Dollars

2013 Career and Technical Education Summer Conference

Len Rhodes M.B.A. C.P.F.M.

Mark C. Weitzel M.B.A. C.P.F.M.

July 25, 2013

debt to dollars © the money professors (tm) 2013 career and technical education summer conference...

money professors tm

pmtmastercard pmt

pmtcar pmt

pmt30 years6

spending slide

pmt5 years12

pmt5 years13

credit card

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