Get Out
of Debt Fast with
PowerPay
Erica Abbott
Jessica Tolbert
Robby Olsen
Warning Signs of Excess Debt





Relying on credit cards for daily
purchases
Using home equity line of credit to
extend purchasing power
Paying minimum on credit card bills
Using cash advances to keep afloat
Losing sleep over debts
2
How to Dig Out

Assess your finances



Add up debts
Use PowerPay to develop a plan to repay
Stop borrowing


Use cash or debit card for daily expenses
Use 1 credit card & pay in full each month


Keep 1 card in reserve… in case of theft or fraud
Call creditors before they call you
3
What type of debt do you have?
Secured debts



Have some type of collateral
Items could be repossessed
or foreclosed
Example: car, house
Unsecured debts



No collateral
bill collectors calling
Example: credit card
4
How much do you owe?
Make a complete list:
 Creditor
name
 Total balance
 Monthly payment
 Interest rate
 Payments in arrears
5
Check your Credit Report at
annualcreditreport.com
• How to contact Creditors
• How much debt you owe
• Be sure to check all three
• See http://www.usu.edu/fpw/ for more
information on credit reports
6
Why am I in debt?
Am I living beyond my means?
 Job loss, or pay reduction
 Unexpected medical expenses
 Insufficient insurance
 No emergency fund

7
Examine Your Expenditures &
Develop a Spending Plan
Is the plan realistic?
 Can I meet all my monthly
obligations?
 How can I reduce spending to put
more money towards my debts?
 How can I increase my income?
 Will I stick to it?

8
Credit Card Rates
Introductory Rate = 0%
Typical Rate = 18% or
higher
$7,000 balance, yearly
interest payments
~$1,000
9
Reduce Credit Card Rates




Call your credit card company
Let them know your current interest rate
and your habit of paying on time (if true)
Tell them other credit card companies are
offering lower rates
Ask if they will lower your current rate
10
PowerPay
Debt Analysis
get out of debt faster
Pay less total interest
11
Power Pay Debt Analysis
Create a List of debts & creditors
 Prioritize debts
 Pay at least minimum each month
 When a debt is paid, put same $
towards highest priority debt
 Add extra dollars to highest priority
debt

12
The Results…
A person with a
total debt of
$30,381 will pay
$38,966 over 9
years without
PowerPay
BUT with PowerPay
only pay $34,819 &
be debt free in only
3 years
13
Power Pay Saves You…
6 Years
$4,146
14
Get Back on the Right Track
Create a spending plan.
 Stick to it!

15
Get Back on the Right Track

Use community resources
 USU Family Life Center
 County Extension office
 Financial Planning for Women
16
Get Back on the Right Track



Establish better credit habits
Pay bills on time
Don’t create more debt
17
Get Back on the Right Track

If your monthly obligations are not
affordable, reduce spending.
18
Choices That Could Get
You in Trouble







Bouncing checks
Postdated checks
Payday lenders
Rent to own
Pawn shops
For-profit debt counseling
Get rich quick schemes
19
Remember…
It’s not the amount you
make, it’s what you do
with it that matters.
20
Questions?
 Experiences
to share?
 What works for you?
21
Evening Program




Please tell your friends that this program
will be repeated this evening
7-8:30 pm (more time for Q&A)
USU Family Life Center, 493 N 700 E
Free, easy parking
22
FPW



Website: www.usu.edu/fpw
Blog: http://fpwusu.blogspot.com/
FB:
facebook.com/FinancialPlanningforWomen
23
Upcoming FPW




August 8: Q& A with insurance agents
Sept. 12: Managing your $ IN retirement
Oct. 10: The Psychology of Money
Nov. 7 (FIRST Wed.) TBA
24
Family Life
Center
Housing & Financial
Counseling Center
493 N. 700 E. Logan
At the bottom of Old Main Hill
435-797-7224
25
Financial Management
• Budget Planning
• Debt Management
• Credit Use
• Life Stage Responsibilities
• Bankruptcy Intervention
26
Power Pay

www.powerpay.org



Stop borrowing or charging until debts are
paid off
Make power payments. As one debt is paid
off, move that payment to another debt
rather than spending it on something else.
Saves money in interest and pays debts
faster.
27
Housing Counseling
• Home Purchase
• Responsibilities of Home Ownership
• Mortgage Default
• Reverse Mortgage
28