According to a study recently conducted by Ohio State University, consumers are not paying off debt as quickly as they once were. In fact, some younger Americans often pile on so much debt between credit cards, student loans and other financing that they won’t be able to pay it off until they’re 70 or older! That’s a long time!

credit-card-debt

Of course, there’s nothing wrong with loans and credit cards. In fact, there are many benefits to using them when building a strong credit history. But it’s important that you pay them back in a timely manner in order to keep your credit in good standing and to save some money.

Your best investment is to pay off high-interest debt. Since the average loan has a higher interest rate than the average savings or investment account, this will allow you to save more money in the long run. By paying off your highest interest-rate debt first (usually credit cards), you’ll be able to take an entire bill off your monthly list and have more money to contribute to other loans or savings. Just think of how much better your paycheck will look with one less bill to take out of it!

Use EECU’s “Paying Off Loans” Worksheet to keep a list of your loans’ interest rates and begin working more aggressive debt repayment into your monthly budget. When you’re 70 and your loans are long gone, you’ll be glad you did!

Click here to read Part 1

Be aware of potential for fraud and scams.

Unfortunately there are criminals out there who prey on individuals suffering financial hardships. Here are some tips to help you avoid becoming a victim.

  • Mortgage relief – only work with your lender to set up mortgage relief.
  • Debt Relief Scams – many of these services charge high up-front fees, and chances are you can negotiate payment options with your creditors on your own.
  • Lottery Checks – if it looks too good to be true, it probably is.
  • Job Hunting Scams – Work from Home Scams that ask you to pay money up front
  • Advance Loan Fees – Don’t pay upfront fees to get a loan

What can EECU do for me?

We are committed to the financial well-being of each and every member. In addition to working with your creditors, you may need to look at your options for modifying an existing loan or securing a new loan at a lower rate to consolidate your debt. Here are a few of the ways we may be able to help: Continue reading

Click here to read Part 2

Standing ready to help you and your family through financial difficulty.

Many families and individuals in our community have found themselves faced with financial hardships due to loss of employment, reduction in income, or other financial challenges. In an effort to provide some assistance, we’ve put together information and resources for our members to help navigate financial difficulties.

Getting started – create a budget

When working to get a handle on your household finances, the first place to start it to look at your household earnings and expenses. If you don’t already have a budget in place, it’s a good idea to take steps to create a household budget.

Step 1: Identify household and other income sources.

Step 2: Make a list of all fixed, variable, and future expenses. Don’t forget to include health insurance. Then subtract these expenses from your total, monthly household income. (NOTE: you may want to do some investigating to understand COBRA and see if there are options that would allow you to spend less per month for roughly the same coverage).

Step 3: It’s wise to establish an emergency savings account for the unexpected expenses- even if you can only contribute a small amount monthly. Treat this like a monthly household expense.

Step 4: If you subtract numbers from Step 2 and 3 from your total monthly income you’ll arrive at your total disposable household income. Continue reading