PowerPay
Your Way
out of
Debt
1
Marsha A. Goetting
®
Ph.D., CFP , CFCS
•Professor & Extension
Family Economics Specialist
•Department of Agricultural
Economics & Economics
2
Marsha Goetting’s
Version of…………..
3
Using Response
Clicker
• Is already
ON
• Don’t press these
buttons
– Menu
– Enter
– Go to
– Clear
4
Test Your Clicker
Press 3/C
o 1/A
o 2/B
o 3/C
o 4/D
Not Accepting
Answers
5
Screen shows your
answer
o 1/A
o 2/B
o 3/C
o 4/D
Your Answer
1/A
6
Which of your debts has
the highest balance?
1.
2.
3.
4.
5.
Credit Card
Car Loan
Student Loan
Store Credit
Other
0%
Credit
Card
0%
0%
Car Loan
Student
Loan
0%
Store
Credit
0% 7
8
Other
Countdown
Must respond before
end of time
1.
2.
Yes
No
68
Countdown
What is your most important
financial goal right now?
1. Pay off loans,
overdue bills or
other debts
2. Save money for
retirement
3. Save money for
emergencies
4. Save for children’s
education
25%
25%
25%
25%
89
Pay off
loans,...
Save money
for...
Save money
for...
Save for
Countdown
child...
What if I entered wrong
answer? Last response
counts
o 1/A
o 2/B
o 3/C
o 4/D
Your Answer
4D
10
Which of your debts has
the highest interest rate?
1.
2.
3.
4.
5.
Credit Card
Car Loan
Student Loan
Store Credit
Other
0%
Credit
Card
0%
0%
Car Loan
Student
Loan
0%
Store
Credit
0%11
8
Other
Countdown
Yes No Questions
• Do not use
these keys:
•“Yes” or
• “No”
12
Yes or No Questions
• Use
•1, if yes
•2, if no
13
Do your sometimes feel
overwhelmed at the amount
that you owe creditors?
1. Yes
2. No
0%
Yes
0%
No
814
Countdown
What % of consumers have
debt other than a mortgage?
1.
2.
3.
4.
5.
6.
91%
88%
82%
71%
68%
40%
0%
91%
0%
0%
0%
0%
88%
82%
71%
68%
8
0%15
Countdown
40%
Using Clicker
• You are anonymous
• No one knows your
answers
• So click away when
asked questions!!!!!!
16
Credit
Financial Concept
Paying only
the minimum
amount on credit
cards costs a lot
17
What’s the average credit
card balance owed by
American households?
1.
2.
3.
4.
$23,100
$15,956
$8,250
$5,500
0%
$23,100
0%
0%
$15,956
$8,250
0%
818
Countdown
$5,500
Credit Card
Balance…
$15,956
19
What is the average APR on
credit card with a balance?
1.
2.
3.
4.
5.
21.5%
18.9%
16.0%
12.8%
10.2%
20%
20%
20%
20%
20%
820
21.5%
18.9%
16.0%
12.8%
Countdown
10.2%
Average credit
card interest rate
12.8%
21
What percent of credit card
holders say they hardly ever
pay the balance in full?
1.
2.
3.
4.
75%
58%
35%
15%
0%
75%
0%
0%
58%
35%
0%
822
Countdown
15%
Hardly ever pay
in full
58%
23
How many credit cards
does average American
household hold?
20%
20%
20%
20%
3
8
10
15
824
22
1. 22
2. 15
3. 10
4. 8
5. 3
20%
Countdown
Credit Cards the
average household
“holds”
3.5
25
PowerPay
26
PowerPay Debt
Types
•
•
•
•
Credit Cards
Appliance Loans
Remodeling Loans
Car Loans
27
Debt Payments
• First debt:
• Second debt:
• Third debt:
• Total Monthly
Payment:
$150
$50
$75
$275
28
How PowerPay
Works?
• As soon as one debt
is paid off, that
monthly payment is
applied to the next
debt.
29
First
Debt
•When debt 1 ($150) is
paid off, add that
payment to next debt.
30
First Debt Paid Off
• First debt paid off:
0
• Second debt ($50):
 $150 + $50 = $200
• Third debt:
$75
• Monthly
Payment
$275
31
Second
Debt
•When debt 2 ($50 +
$150) is paid off, add
that payment to next
debt.
32
Second Debt
Paid Off
• 1st & 2nd debt paid off:
0
• Third debt ($75):
$275
($150 + $50 + $75)
• Monthly
Payment
$275
33
PowerPay
•Continue combined
payments until all
debts are paid off.
34
Benefit$ of
PowerPay
•Reduces time to
pay on debts
•$ave$ interest
35
PowerPay Debt
“Rules”
• No new debt be incurred
• Total dollar amount
towards debt reduction
remains the same
36
PowerPay Web site
(Utah State University-Extension)
https://powerpay.org
37
Welcome
38
User Login
• If new member, click [New? Sign
up now]
39
Screen
that
Appears
Enter New User Information,
Click Submit
40
41
Folder Tabs
•
•
•
•
•
•
PowerPay
Spending Plan
PowerSave
Calculators
Education Center
About PowerPay
42
43
PowerPay Options
1.
2.
3.
4.
5.
Payment Calendar
Consolidate
Emergency Fund
Loan Qualifier
Snapshot Projection
44
45
Create Creditor(s)
List
•
•
•
•
Creditor Name
Balance
Payment
% Rate
46
Creditor Information:
Creditor
Name
Chase Auto
Mastercard
Security Bank
Lowes
Balance Payment
%
Rate
7200
264.95
8
11567
3350
1250
195.00
75.00
100.00
16
3.8
9
Save Creditor Information
Press after
each entry
47
Example: Payoff Time
Creditor Name
Chase Auto
Mastercard
Security Bank
Lowes
Payoff Time
2 years 7 months
January 2012
9 years 11 months
May 2019
4 years 1 month
July 2013
1 year 2 months
August 2010
48
Creditor Information
49
Highest Interest First
50
Repayment
Method Drop Down Menu
•
•
•
•
•
Without Power Payments
Highest Interest First
Lowest Balance First
Shortest Term First
Calculated as Entered
51
Which loan “should” be
paid off first?
1.Lowest Balance
2.Shortest Term
3.Highest interest rate
52
Advantages of Paying
Shortest/Term Lowest Balance
First
1.
2.
3.
4.
Reduce from 10 – 7
You feel “better”
Get rid of “Uncle George”
Other ideas?
53
Advantages of Paying Highest
Interest First
1. Pay less interest
2. Pay off quicker
3. Other ideas?
54
Select Highest Interest
First, Then Click Calculate
55
Without Power Payments
(Highest Interest First)
Creditor Name # of payments
Total Paid
Int. Paid
Chase Auto
31
$7970.04
$770.04
Mastercard
119
$23039.93 $11472.92
Security Bank
49
$3617.69
$267.69
Lowes
14
$1317.51
$67.51
Payoff Time
Total Paid
Total Interest
9 years 11 months
May 2010
$35,945.17
56
$12,578.17
With Power Payments
(Highest Interest First)
Creditor Name # of payments
Total Paid
Int. Paid
Chase Auto
31
$7970.04
$770.04
Mastercard
47
$16725.36 $5158.36
Security Bank
47
$3617.34
$267.34
Lowes
14
$1317.51
$67.51
Payoff Time
Total Paid
Total Interest
3 years 11 months
May 2013
$29,630.25
57
$6,263.25
Bottom Line benefits
(Highest Interest First)
• Time to Pay off Reduced
by:
–
6 years
• Amount Saved in Interest:
–
$6,314.92
58
Payment Calendar Example
Scroll
Down
59
Detailed
Calendar
•Provides a month
by month look at
your debt
elimination plan.
60
Click Payment Calendar
61
Scroll down to see Detailed Calendar
Last pmt
$82.49
62
Lowes
$100.00
To Master
Card
$264.95
63
Total Creditor Payback
64
Want to know
•Remaining
Balance
•Interest
•Principal
65
Show Balance, Interest,
Amount towards Principal
Click on
tiny box
66
For each creditor
67
Payment
Calendar
Questions?
68
Extra Payment
Option
69
Extra
Payment
•Any additional
money paid toward
debts above the
minimum amounts
70
Click Extra Payments
Tab
71
Extra Payment
•
•
•
•
Amount
Start month
Start year
Frequency
72
Extra Payment
Frequency
•
•
•
•
•
One-time only
Annually
Semi-annually
Quarterly
Monthly
73
Example: Extra
Payment
Amount Start
Month
$50
$500
Start
Year
Frequency
August 2010
Feb. 2011
Save Payment Information
Monthly
Annually
Press after
each entry
74
Drop Down Menus
75
Click Payment Calendar
76
Select Highest Interest First
77
Without Power Payments
Highest Interest First
Creditor Name # of payments
Total Paid
Int. Paid
Chase Auto
31
$7970.04
$770.04
Mastercard
119
$23039.93 $11472.92
Security Bank
49
$3617.69
$267.69
Lowes
14
$1317.51
$67.51
Payoff Time
Total Paid
Total Interest
9 years 11 months
May 2010
$35,945.17
78
$12,578.17
With Power Payments
Highest Interest First
Creditor Name # of payments
Total Paid
Int. Paid
Chase Auto
31
$7970.04
$770.04
Mastercard
42
$16090.40 $4523.14
Security Bank
42
$3612.36
$262.36
Lowes
14
$1317.51
$67.51
Payoff Time
Total Paid
Total Interest
3 years 6 months
December 2012
$28990.05
79
$5623.05
PowerPay Benefits
$50 per month $500 annually
•Time Reduction
– 6 years 5 months
•Amount Saved
–$6,955.12
80
81
Detailed Calendar with Extra Payment
$50 extra
82
$500 extra
Consolidation
Option
83
Select Consolidate
84
Creditors to Consolidate
• Check creditors to
consolidate
• Enter fees and
penalties amount
Calculate Amount to Be Consolidated
85
86
PowerPay Web site
(Utah State University-Extension)
https://powerpay.org
87
My opinion of PowerPay is:
1. Worth Trying
2. Too
complicated
3. Won’t use as I
don’t have
debt
4. Other
0%
Worth Trying
0%
Too
complicat...
0%
Won’t use as
I...
0%
888
Other
Countdown
Your
Opinion
Please
89
What is your reaction to using
the response clickers?:
1. Worth Trying
2. Too
complicated
3. Won’t use as I
don’t have
debt
4. Other
0%
Worth
Trying
0%
Too
complicated
0%
Won’t use as
I don’t have
debt
0%
90
8
Other
Countdown
What is your reaction to using
the response clickers?
1. Very
Impressed
2. Sort of Useful
3. So-So
4. Not too
impressed
5. Didn’t like
using them
7
Countdown
91
Rank the knowledge you gained
from the PowerPay program
1. Didn’t learn
anything new
2. Gained a little
3. Neutral
4. Gained some
5. Gained a lot
7
Countdown
92
Rank the level of motivation that the
PowerPay program provided for you to
take actions towards increasing your
minimum credit payment.
1. No motivation
2. A little
motivation
3. Neutral
4. Some
motivation
5. Lots of
motivation
7
Countdown
93
Best wishes
as you
explore
Power Pay
Marsha
94