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How to Pay Off Your Debt

Lesson 1 of 8

Class Introduction

 

How to Pay Off Your Debt

Lesson 1 of 8

Class Introduction

 

Lesson Info

Class Introduction

We are going to cover all things debt today, starting with consumer debt. And what do I mean by consumer debt? Well, for the most part, we're talking about credit cards. Generally, when we do refer to consumer debt, we are talking about things that you use, like credit cards, to purchase your things, as opposed to student loans, which we are going to tackle in the next segment. And how we're actually going to cover this today is starting out with why you need to stop feeling shame and actually face your numbers. That is step one. You cannot make any sort of action plan without knowing the exact number of how much debt you're in and how to start to get all of that information together in order to formulate the attack plan. Then I'm going to overview two very common strategies that people use to get out of debt. And these are also strategies you can apply to other things, like student loans, as well. And you might know them. They go by the names of debt snowball and debt avalanche, if yo...

u've ever heard those terms before, we are going to dig into exactly how they work and which one may or may not be best for you. Of course, this all ties back to your psychology of money and how you emotionally relate. Then we're going to talk about a couple other unique methods and attack strategies to get debt free. It's stuff you could couple with the debt snowball or debt avalanche, or maybe it's just what you wanna use on your own. And then where to turn if you're still in a bind. Because for some of us, we outline these options, we try them, we attack them for a little bit, and it's just not working, or we're in a financial situation where we don't even have access to these options. So, what are some other options for you, if that is your situation. And finally, I really wanna also talk about what you want to avoid at all costs. What are the products out there that are predatory that are really just trying to take you for a ride and how you can be avoiding them. So, we're kicking off this morning with this idea of why I want you to stop feeling shame. Now, I'll be honest, for some people that's actually a motivator. They need the shame to kick start them into getting out of debt. But the reason I say stop feeling the shame, is because sometimes if we're feeling like that, we do the ostrich head in the sand move and then we're not willing to actually face our numbers. So I want to start by actually sharing this number. In 2017, the Federal Reserve found that the average American household had $6,375 of credit card debt. Just credit card debt. Now, I don't want to you to be using this as an excuse, though, to say, oh, well I'm below average, so I'm okay, my credit card debt is fine. And I also don't want you to be feeling like, whoof, that's a lot less than I have, I really need to, well, you do need to get it together, that's the goal of what we're doing today, but I'm not using this number to shame anyone, but just to point out that it really is normal in this country to have credit card debt. Now, that's not a state of normal that I want any of us to be in, but I want you to understand that when we talk about this idea of why you need to stop feeling shame and hopefully break the taboo a little bit. Start being open and honest with each other and talking about this situation. Because it becomes a lot easier for us to then face our numbers, if we're willing to be open and honest and we can talk to one another and have accountability buddies when we're going through this process. And you can't actually face your numbers and create an attack plan without all the information in front of you. So this is what you need to know. I would like you to sit down and take the time, either, if you're watching this later, and you can pause, do it right now, if you're watching in real time with me at the moment, you can start to think about it, maybe while I'm talking, log in to your various accounts and find out: who you owe, so the name of the person that owns your debt, whether it's a particular bank, a particular lender; the principal balance, now what that means is the outstanding amount that you owe, so maybe it's that $6,375, like the average American household on credit cards; then I also want you to write down your minimum monthly payment. So, at bare minimum, how much do you have to pay every month on your credit card. Perhaps you owe $3,000, and they say you need to be paying at least $120 a month on that $3,000. And, finally, I want you to write down the interest rates that you're paying on your card. And if you're confused about where any of this information is, you can download your most recent credit card statement and you can find it all on there. So there's a PDF option if you login online, no matter your credit card company, to download that. All that information's going to be right there. And with interest rates, sometimes you'll see it called APR, that's the other term that you can look up.

Class Description

One of the worst parts of carrying debt is the shame it induces. Too many people feel embarrassment and guilt about their debt, as if they’ve failed in some profound way. But the facts are that the average American adult has $4,717 in credit card debt, and more than 44 million Americans hold nearly $1.5 trillion in student debt, so there’s no reason to feel burdened by this unfair stigma.

Instead, you need to focus on taking proactive measures to deal with your debt or prevent it from ever accruing. Erin Lowry will explain some of the complex aspects of credit card and student loan debt, help you get rid of that overwhelming fear that you’ll never conquer your debt, and show you how to create a plan of action to attack your debt head on.

In this class, you’ll learn how to:

  • Design a strategy that either pays off your debt gradually or quickly.
  • Use balance transfers to avoid high interest rates.
  • Find loans that will help, not hurt, your bottom line.
  • Understand the differences between federal and private student loans.
  • Figure out if you’re eligible for student loan forgiveness.
  • Get help from charities or loved ones if you’re really in trouble.

Reviews

Jay Valencia
 

Erin covers a lot of ground and she delivers it all with an approachable vocabulary. This is a series of classes well worth watching.