Doing noting about your debt is burning up your retirement savings $ – literally
Here is a very SCARY FACT:
If you are only making the minimum payments on your credit cards and lines of credit right now, it could take you more than a lifetime to get out of debt!
Minimum payments are essentially ‘interest only’ payments. This means that by making the minimum payments, the ‘principal’ (amount owing) of the loan stays the same; it does not get reduced over time. Your Creditors win by getting you to pay interest forever (this is how they make money) and you are stuck in debt forever*. Well, not forever, but a VERY long time. Look at your credit card statement to see the section that says “Time to Pay” – it will shock you)
If this is you, and you have been making only the minimum payments for a while, then perhaps it’s time to consider a debt plan to deal with this problem once and for all!
The Cost of Doing Nothing:
Not quite ready to deal with the debt? At least take a moment to calculate the cost of doing nothing:
Here is how: Take your current Minimum Payments on all of your unsecured debt (unsecured debt means debt not including car loans, mortgages and home equity lines of credit as they are connected to an asset) and multiply it by 60. That is the cost of carrying your debts for 5 years.
Example: Debt Load -$45,000 (Credit Cards and Lines of credit etc), Minimum payments on all debts $900/month. Calculate $900 x 60months = $54,000.00
This means it will cost you $54,000.00 to pay your minimums for 5 years while you “put off” making a decision on dealing with your debt.
Now that is a high cost of doing nothing! Worse than this, is the fact that the person still owes the $45,000!
Calculate $45,000 + $54,000 = $99,000.00
This is the real total cost of doing nothing over 5 years and then paying off your debts. Think about the impact on personal net worth and future retirement!
Alternatively, if this same person came to see us for help, we could likely help them get them out of debt for a grand total of only $14,000! Their debts would be reduced from $45,000 (principal) down to only $14,000 with ZERO % interest. Compare that to the total cost of doing nothing.
Calculate $99,000.00 – $14,000 and we have essentially helped save this person over $85,000.00!
Take a moment to calculate your own cost of doing nothing by following the example above. If you know what you’re dealing with, then it makes it easier to make decisions about how to deal with it.We would love to help you with your debt so you can move on. Get debt free now!
Give us a call, we would love to help.
Living Debt Free Feels Amazing!