Downsizing Debt

Downsizing Debt

The average household has $15,762 of credit card debt, according to the 2015 American Household Credit Card Debt Study. If you have student loans, the average is $48,172. If you carry car loans, the average is $27,141. In total, the average American household has $130,922 of debt and $2,630 is the average interest on credit card debt. That’s a really nice vacation or college savings! Another startling and disturbing fact is that consumers consistently and vastly underestimate how much they owe. In fact, actual debt on average is 155% greater than consumers reported.

Now there are lots of reasons debt has increased so much over the last few years and it isn’t just “irresponsible spending”. Cost of living has outpaced growth in salaries. The problem is that because of the ease of using credit and debit cards, we aren’t as connected with our cash flow as when you had to balance a checkbook monthly.

That’s the problem…now to the solutions.

Taking on the “Breaking Debt Challenge” is part of this month’s action class. Debt restructuring and planning is one of the keys to getting what you really want from your money. By simply learning about it and attacking the issue smartly, you can save thousands of dollars. Here are the steps for our breaking debt challenge:

  • Complete the Debt Discussion Worksheet with your partner or budget buddy
  • Attend or review the breaking debt session (live July 9th at 11:00 a.m. MT/ 12 p.m. ET!). Go to your online classroom for the link.
  • Get your annual free credit report at http://www.annualcreditreport.com/, review it, and put it in the cloud. Mint or Credit Karma can give you your credit score.
  • Complete the consumer debt page (and student loans if you have them) in your playbook.
  • Notify your coach when it’s complete and ask for a debt restructure.
  • Review the results.
  • Make a plan and identify your debt free dates. Enter these as a goal in your playbook to track.
  • Contact your coach for additional help, strategies, or clarity on the results.

You can find all the material and recorded classes in your online classroom.

You can also attend our monthly  Coaching Hours to talk through these or any other issues on July 20th from 5 p.m.-6:30 p.m. MT / 7 p.m. – 8:30 p.m. ET.

What’s next?  If you’re a club member, ask your coach for access to our financial planning software, so you can begin to plan ahead for your debt free date and view different scenarios for getting there faster! If you’re not a club member, but are interested in learning more about our services, follow this link to schedule your complimentary call today and find out if we are good fit!

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