Is it too late for debt elimination?
Are you worried that it is too late for you to put a debt elimination strategy in place? Are you afraid you’ll be working at least part time when retirement age hits and you lose your main source of income?
If you have been battling debt for months, or even years, you may feel like you’ll never get caught up, let alone ahead of your debt. This is normal. Many of us have gone through that while fighting the battle to beat our debt. But there is something you need to know that will give you hope.
You are not alone and you are not the first to feel the way you do. You can get started right away with a plan to overcome your debt and even with the help you need to beat it. What you do need to do is to take action.
How do you get started?
You need to take the small steps that will get you into the position to take control of your debt and beat it. It can seem overwhelming to try to tackle it all at once. So take a different strategy that many use to achieve all types of goals. Take small steps to get you where you need to be.
First, do you know how much debt you really have? No? Take comfort in knowing almost no one else does either without getting an analysis of their debt. You may know how much you owe to each creditor based on looking at your credit card statements, mortgage statement, and others since the balance is on them. That doesn’t take into account the interest you are going to pay out and how long it will take to pay each debt off because of that interest. So what is your first small step on the way to taking control of your debt?
Step number one is to find out how much your debt will cost you.
You may have heard the saying that the first step is always the hardest. Not in this case. Right here on our site, FromDebtToHope.com , you can request a free analysis that will show you how much your debt is going to cost you and how long it is going to take to pay it off based on how you are paying your debts today.
This small step is easy. Tell us you want your free analysis. There is no cost and no obligation. There is a little work involved. You’re going to need to fill in a form with the basic debt information so we can run the analysis. Then you’re going to get it back and move to the next small step.
Step number two – look over the numbers.
Once you know how long it will take to pay off your debt and how much it will cost you, you have some numbers to use to make decisions. Consider the following when you are looking at your debt and trying to decide what you need to do next. Do you have any large expenses coming up over the next few years that will add substantially to your debt? Like tuition, a wedding, big vacation, trading up homes, etc.
How about your retirement? Are you contributing enough to your retirement funds? Take a look at the analysis and you will see how much more you could potentially contribute to your retirement once your debt is paid off. The point is you have a chance to look at some realistic numbers on your debt which will help you to make decisions that will be best for your future and not your creditors future.
Step number three – make a decision.
Make a decision and either get started with one of the options in our analysis or do something else. The point is you need to do something because your debt is working against you every day and it doesn’t take a vacation. If you want to get ahead of it you need to get started with something that will work for you.
Is the Financial Compass right for you?
If you are serious about eliminating your debt then take a look at the analysis we create for you and look at how easy it is to get started and at the results our automated debt elimination program can achieve for you. We give you a plan and then we do the work for you.
There is no cost and no obligation. Fill in the box up at the top right and ask for your free debt elimination analysis. You have nothing to lose and everything to gain.
Filed under credit card debt, debt elimination, financial compass by 
So why do most people fail at eliminating their debt?
In order to figure that out, we should take a look at what you need to do to actually eliminate the debt. And then ask why it doesn’t happen.
So what does it take to eliminate debt?
2 things I can think of right away are 1) stop creating new debt and 2) have a realistic plan to pay off the debt. So let’s take a look at these two for now.
Stop creating new debt.
You need to stop adding new debt.
Sounds good. But it often doesn’t happen until someone is in the position of not having any credit left to use to incur more debt. Americans are called consumers for a reason. We spend. The last several years offered credit that was often too easy to get and use, anywhere and anytime. Add to that credit card minimum payments that were created to take 30 years or more pay off and confusing statements leading to late payments that earned the credit card companies millions in charges and fees. You can see why everyone was offering easy credit. They made a fortune off of it.
Likewise home owners were offered ways to access their equity and spend that too. Look at how many people refinanced their homes and “paid off” their credit cards (they really just moved the debt onto their mortgage) and then eventually used up their credit cards again until they were maxed out or close to it. Or they got a HELOC (home equity line of credit) that was essentially a big credit card tied to your mortgage allowing you to use your available credit (the equity in your home). How many big RV’s, boats, and new cars showed up in your neighborhood during that time?
Habits are a big part of what got them into trouble. Spending is a habit that is hard to kick. But if you want to really get out of debt and maybe even get your retirement on track (most people are way behind on this) you need to make changes. You would be surprised at how much a small change can accomplish over time.
You need to change your spending habits and start using more cash and less credit if you want to get ahead of your debt. That’s easier said than done. You know that and I know that. Think about all of the New Year’s resolutions that have started off well and then petered out in days or weeks.
Changing your financial habits. Easier said than done.
Interest changes everything. Don't think you'll just be paying a little more than your current balances.
If you really want to pay off your debt you have to pay more out each month than you owe. And that is very difficult for most people to do in today’s economy. We’re in some difficult times right now. Many people have lost income, lost significant portions of their retirement funds, and could be worried about their jobs in today’s rising unemployment. So how do you start paying off your debt when you feel like you don’t have any extra money to pay it down with? Fortunately you can start getting ahead with a small amount of extra money, even a dollar makes a difference.
You need a plan that you can and will follow that will accomplish your goals.
Here is what I believe is the single most important aspect of changing your future. You need a plan and the means to follow it. Without a plan to act as a road map to help you eliminate debt, how do you expect to accomplish it? A strategy requires tactics, or actionable steps. Those actionable steps need to be taken if you want to see results.
The first step is to perform an analysis on your debts. You need to know how much debt you really have, and what it costs you every month. You may know how much you owe on your debts, but do you know how much money it will take to pay it off since you are paying interest every month? An example is a 30 mortgage where you can still owe 75% of what you borrowed 15 years into the loan. Credit cards are much worse since you are paying compounded interest unlike the simple interest mortgage.
You also need to determine the most effective way to pay it down and where your money is best spent. Most people tend to make over payments, when they do make them, based on emotional decisions and continue to waste money in their attempts to improve their financial situation. While any overpayment can be a good thing, wouldn’t you want to get the most bang for your buck on every dollar you send out to pay off debt?
You need to be prepared to follow the plan you create month in and month out, year in and year out. It takes time to get ahead of your debt and over come it. And it takes discipline.
So why do so many people fail at eliminating their debt?
They continue to create debt and never develop a plan that they can reasonably follow year in and year out to accomplish their financial goals. Getting out of debt is not as easy as it sounds. If it was, we wouldn’t have the economic problems we read about, hear, and see on tv.
Do you have a solid and realistic plan to eliminate your debt that you will absolutely be able to follow for several years? Not many people do. And when they do have a plan, it’s a matter of time before most people get too busy to keep it going. I’ve had financial planners tell me that most of their clients follow their advice for about 3 months and then fall off the cliff.
How do we improve our chances of success in eliminating debt and getting back on the path
A small change can put your future back on track.
to better cash flow, improved savings, and larger retirement contributions (which takes better cash flow) ?
Use a program that gives you a plan with achievable goals and where the plan is followed for you. That’s what we do. Our program has been helping others just like you for over a decade. Here is what makes our plan so successful.
- We analyze the debt and lay out a plan to eliminate the debt showing you how much you could save, when you could be completely out of debt, and how much more you could accumulate for retirement or other investments.
- We show you how much it will take each month to accomplish these realistic and achievable goals.
- We even do the work for you through our Payment Administration service that pays the debts in the program for you according to our analysis which saves you thousands in interest and years of payments.
- But first we give you your own personalized analysis of your debts for free. No cost, no obligation. We want you to know how much you could save, when you could be debt free, and how different your future could be.
If you would like your own personalized, free analysis, please visit our home page at FromDebtToHope.com to learn more or fill in the form at the top right corner of this page. No cost. No obligation. You have nothing to lose and everything to gain.
Ask for your free Financial Compass analysis today.
Filed under credit card debt, debt elimination, mortgage, Uncategorized by
Choosing to eliminate your mortgage is a goal every home owner has.
But when is the right time?
Consider the following and know that I am not going to tell you what you should be doing or when you want to eliminate that mortgage. Here’s why. And remember, I want to see you eliminate all of your debt. But you need to be smart about how you go about it.
Your mortgage is usually the cheapest debt you have, so if you have more expensive debt like compounded interest rate credit cards it usually makes sense to eliminate that first. Remember, your mortgage is simple interest and a tax deduction for most of you. Also, if you send in extra money on your mortgage, it does not lower you next payment due unless you are using a credit line. For this post, we’re talking about a standard mortgage that is amortized over time like a 30 year mortgage.
Many people have leveraged their mortgage and made an interest only payment so that they could put more money against their other debt, or to contribute to their retirement. Some of these people made a very wise decision in this area. Many people have paid down the balance due on their mortgage and then lost it to foreclosure, leaving them with a huge loss of equity and an inadequate retirement fund. They had the mindset that you have to pay off your mortgage as soon as you can. That isn’t a good rule of thumb anymore and comes from the mindset of our parents and grandparents who went through or knew someone who lost their home in the depression.
You have to be more financially savvy today. We don’t have $30,000 homes or guaranteed pensions like you did decades ago. And as the recent market has shown you can’t depend on where the market will be when you retire. If you go to retire during a downward cycle in the market you could lose a high percentage of the income you expected to have. You really have to look ahead and plan for your future.
If you are in the process of paying down your mortgage you might want to look at your mortgage periodically and figure out if it makes sense to refinance the mortgage to a lower payment while you continue to pay it down. Of course you need to compare the savings to the cost of the new mortgage, if there are any fees and whether or not you can get a no closing cost mortgage. Make sure you have a good certified mortgage planner or financial planner to help you.
You also want to check with your tax man. Far too many people have had a nasty surprise at tax time after losing their biggest tax write off. That’s a good reason right there to show you why you need a good financial consultant or planner.
These are just a few things to think about when deciding to eliminate the mortgage and your strategy to do so. Please get yourself a professional financial planner or consultant. Yes you want to eliminate all of your debt including the mortgage. You especially want to go into retirement debt free with a substantial retirement income to enjoy as long as eliminating the mortgage is your best strategy.
I suggest you use a flexible plan like our Financial Compass that allows you to make changes to meet your strategy which can change from time to time. For instance, we can take part of the payment that was going toward a debt and automatically send it to one of your investment accounts as each debt is paid off. There are a lot of different strategies and our program is designed to be flexible and to work with them.
While you are thinking about your financial strategies, go to FromDebtToHope.com and get your free debt elimination analysis to see how much you could save and when you could be completely debt free in a flexible program that works with your strategies.
Your friends at fromdebttohope.com
Filed under credit card debt, debt elimination, financial compass, mortgage, refinance mortgage by
The Credit Card Crunch is not only here but growing.
According to a recent article in Reuters, nearly 500 Billion dollars in available credit card lines was reduced in the 4th quarter of 2008. And that’s just the start. Estimates are another 2 Trillion will be reduced this year with a potential 2-3 Trillion in 2010.
We’ve seen a number of clients that have had unused cards canceled and available balances reduced over the last several months. This is going to affect many people very harshly, including small business owners that use credit to balance out their cash flow and keep their business alive in tough economic times like these.
There’s a lot of talk about how reduced credit card use could hurt the economy as consumers spend less since they won’t have access to easy credit. I can understand that.
Finding the positive.
My feeling is that if you help people get out from under the credit card debt as well as their other debts they will get to the point where they are able to buy what they need with cash, and spending will continue to help boost the economy and at the same time our people won’t be so burdened by debt. When you are able to eliminate your debt and get on track to contributing to the retirement you need you’ll more easily be able to spend cash on your needs which helps the economy without incurring additional debt.
Preferred debt has it’s place. It allows us to get into a home, allows businesses to rise and grow, and is useful and necessary in many ways. But personal debt has gotten out of control and is ruining lives and futures. That needs to be addressed and is one of the reasons our program has been successful for over a decade.
Why do so many people use their credit cards for purchases?
Could it have something to do with much of their cash going towards the credit card payments leaving them less cash to work with? Many are thinking they’ll catch up at some point with the credit card and be back to not needing it. But it just doesn’t happen for most people.
Our experience is that many people carry balances over for months, or even years. And while that goes on they aren’t putting away nearly enough to build the retirement they’ll need. Sound familiar?
There is going to be a lot of pain that comes with an increasingly tight credit crunch. But it could help us all get on track to get out of debt as easy credit disappears and changes need to be made to keep us all afloat. Eliminating your debt could benefit you and your family for generations.
Your credit score may not be safe.
30-35% of your credit score is based on revolving credit such as credit card debt. So think about this. If you’re overall available credit is $10,000 and you have used $3000 you are using 30% of your revolving credit. Now what happens if you have your available credit reduced and you have a total of $5,000? Well you just went to 60% of your revolving credit and you look like a higher risk now and your score can take a heavy hit. This can happen to you almost overnight as the credit card companies reduce available credit.
So as if you didn’t already have enough reason to want to rid yourself of your debt, now you may take some big hits to your credit to boot as your credit is reduced.
What do you do?
Our program has been helping people for over a decade to get completely out from under debt with a flexible plan where the work is done for you. We can show you how it can help you by providing you with a free analysis with no cost and no obligation to you.
We can prepare a free personalized analysis that shows how much you could save and when you could be completely debt free. Learn more about our program and how you can get back onto the financial path to a life without debt and with a retirement you want and deserve.
Fill in the form at the top right of the page to get your free Financial Compass analysis or visit our main page to learn more about eliminating all of your debt wisely and safely.
Filed under credit, credit card debt, debt elimination, financial compass by
I was recently asked about the difference between our debt elimination program, the Financial Compass, and using a debt settlement program or a cash out refi.
We’ll first compare our program to settlement and then to the old standby method of paying down debt involving a cash out refinance for a homeowner.
Consumer programs that consolidate debt are usually a debt settlement business, and are advertising heavily on tv and radio. While they can offer a short term benefit and erase some debt, they can also damage your credit for years and could actually cost you far more in the long run than you saved in the short term. The creditors report the settlements to the credit bureaus and your credit score can drop further dramatically. And this is usually after your score has already gone down due to late payments leading up to the need for a change if you were in the position of not being able to keep up with your debt payments.
Those programs generally only deal with unsecured debt and are targeting a consumer with at least $10,000 in credit card debt. Our debt elimination program, the Financial Compass Plan, can address any kind of monthly debt that can be paid off, including your mortgage, and doesn’t harm your credit.
Now let’s say the client gets back on their feet after going through debt settlement or credit counseling and needs to use credit to buy a refrigerator , a car, or get a refinance or new mortgage. If they can qualify, they are going to get much higher rates due to their credit scores and the extra interest they pay on everything over the next several years could easily cost them more than they originally saved.
Especially in the case of a mortgage, where the higher rate could cost them tens of thousands in additional interest paid. While debt settlement or consolidation have a place, it is usually for someone who is approaching the last steps before bankruptcy. These type of programs are really for someone who is already underwater, or has negative cash flow and no hope of changing their immediate circumstances, thereby needing a solution today, and not having any other options. In some cases the straight bankruptcy is more beneficial than going through debt settlement and then bankruptcy anyways if you can’t avoid it.
The problem with debt settlement is this type of service is being aggressively marketed towards the average consumer on the radio, tv, and the internet, and many people don’t understand the true cost of these programs. Nor do they generally need them. Someone who is still cash flow even or positive has options that can turn their entire financial future around for the better. Someone who has already gone through debt settlement or consolidation may not have needed to and usually still has a significant amount of debt to pay off and possibly a mortgage too which our program can address. The Financial Compass can help protect what’s left of their credit and help them to rebuild it while putting them on the right path financially.
Now let’s look at the typical cash out refi as was done the majority of the time over the last several years in the mortgage industry who have not had additional programs like ours in the past to work with. The substandard mortgage company in the past would use as much of the client’s equity as they could to “pay off” as much of the client’s debt as possible, and would do this every time the client comes back in after having built up their debt again and again. They were not able to, and did not, give their client a lasting solution.
When asked, I’ve had a number of them tell me they told the client to take the monthly savings and pay it against their mortgage. That almost never happens in practice and the mortgage is usually the last place you want to put extra money when you have other debt incurred. But many of the untrained or inexperienced mortgage people gave poor advice which has led to many of the problems homeowners that went through a cash out refi have experienced. ( one more reason you should look for a certified mortgage planner when examining making a change in your mortgage.)
Each time a client goes through a cash out refi, the client’s equity decreases. If they continue to go through this process 2 or more times, as many have, they could eventually find that there isn’t enough equity left to help them again and they are in deep trouble and possibly on the verge of losing their home. We’ve seen this happen to many people over the last year and it looks like many more will suffer the same fate over the next couple of years as property prices continue to fall or stay at a low level.
What got the person into trouble after the cash out refi? They got used to the new mortgage payment and spending the extra cash freed up and then went on to use their newly freed up credit cards. We are called consumers for a reason.
There is another way to use a cash out that benefits everyone. When you do a cash out refi, you “pay off” some higher cost debt (usually credit card) which really transfers the debt to the lower cost mortgage debt. You used home equity to transfer that debt, but you did not pay off the debt. What we suggest is that you use as little equity as possible to pay down the debt and obtain an improvement in cash flow which can be used as the margin (overage payment) in our program. We’ll address all of the remaining debts in our program after which you can use the cash flow freed up by eliminating the debts to pay down the mortgage or dramatically improve your retirement contributions.
When you “pay off” all of the debt in the refi the old way, the consumer gets used to the new lower monthly payment and spends the money instead of using it to improve their retirement or investing it. Plus they have just sucked a portion of their equity out of the home that could take years to rebuild. And you may be left with a loan to value (LTV) ratio that doesn’t allow you the ability to do another refi if you need one or could benefit from an improved rate change in the near future with a rate & term. You may be able to get a little payment relief on top of all this while still retaining a lot, or most, of your equity by doing things differently with your future in mind.
Using our method, you retain as much of your equity as you can which allows you to more easily qualify for another mortgage transaction if you have an emergency and gives you options you don’t have the old way. It also allows you to get used to a payment that will not only eliminate all of your debt, but allows you to more easily go on to build your retirement or other investments. Within the monthly payout (overall debt payment) in our program we’ll continuously free up more cash as we pay off each debt building up the monthly cash flow and using it to truly pay off the debts. That cash flow we free up can then be used by you to beef up your retirement after or even while we are paying off the remaining debts.
It’s very important to factor into your strategy that less than 10% of your fellow Americans are building a retirement fund that will let them retire comfortably and provide for them. It’s not enough to just go into retirement debt free, you need a lasting income too. Now also realize that in our program we will be helping you to protect and build your credit, and we’ll be improving your debt to income (dti) ratio which helps you to more easily qualify for future mortgage transactions when you need them or when it makes sense for additional savings.
So if you plan a cash out refi with your mortgage professional (look for a certified mortgage planner) talk to us about incorporating our plan and ask your mortgage planner to contact us so we can work with them to ensure that you retain as much equity as possible, actually pay off your debts, and are able to build your retirement. You also end up with more options in the future, and our program could help to protect and build your credit.
Keep in mind that you don’t need a new loan or a line of credit to get into our program. You can simply get a free analysis from us to find out how much you could save and when you could be completely out of debt. And if you want to get into our program after that, if is simple to do so.
Please send any questions you may have about our program to me at
nodebt @ fromdebttohope.com
Filed under credit, credit card debt, debt elimination, financial compass, refinance mortgage by
