Presentation Transcript

1. PowerPay Your Way out of Debt

2. Marsha A. GoettingPh.D., CFP®, CFCS

   Professor & Extension Family Economics Specialist Department of Agricultural Economics & Economics 2 2

3. CreditFinancial Concept

   Paying only the minimum amount on credit cards costs a lot

4. What’s the average credit card balance owed by American households?

5. Credit Card Balance… $15,956

6. What’s the average APR on a credit card with a balance?

   6 6
7. Average credit card interest rate 12.8%

8. What percentage of credit card holders say they hardly pay the balance in full?

9. Hardly ever pay in full 58%

10. How many credit cards does average American household hold?

11. Credit Cards the average household “holds” 3.5
12. PowerPay 12
13. PowerPay Debt Types Credit Cards Appliance Loans Remodeling Loans Car Loans 13
14. Debt Payments First debt: $150 Second debt: $50 Third debt: $75 Total Monthly Payment: $275
15. How PowerPay Works? As soon as one debt is paid off, that monthly payment is applied to the next debt.
16. First Debt When debt 1 ($150) is paid off, add that payment to next debt.
17. First Debt Paid Off First debt paid off: 0 Second debt ($50): $150 + $50 = $200 Third debt: $75 Monthly Payment $275
18. Second Debt When debt 2 ($50 + $150) is paid off, add that payment to next debt. 18
19. Second Debt Paid Off 1st & 2nd debt paid off: 0 Third debt ($75): $275 ($150 + $50 + $75) Monthly Payment $275
20. PowerPay Continue combined payments until ALL debts are paid off. 20
21. Benefit$ of PowerPay Reduces time to pay on debts $ave$ interest 21
22. PowerPay Debt “Rules” No new debt be incurred Total dollar amount towards debt reduction remains the same
23. PowerPay Web site(Utah State University-Extension) https://powerpay.org 23
24. Welcome 24
25. User Login Screen Example If new member, click [New? Sign up now] 25
26. Screen that Appears Enter New User Information,Click Submit Screen Example 26
27. Power Pay Options Screen Example
28. Folder Tabs PowerPay Spending Plan PowerSave Calculators Education Center About PowerPay 28
29. Screen Example
30. PowerPay Options Payment Calendar Consolidate Emergency Fund Loan Qualifier Snapshot Projection
31. Screen Example
32. Create Creditor(s) List Creditor Name Balance Payment % Rate
33. Creditor Information: Save Creditor Information Press after each entry 33
34. Example: Payoff Time
35. Creditor Information Screen Example
36. Highest Interest First Screen Example 36
37. Repayment Method Drop Down Menu Without Power Payments Highest Interest First Lowest Balance First Shortest Term First Calculated as Entered
38. Which loan “should” be paid off first? Lowest Balance Shortest Term Highest interest rate
39. Advantages of Paying Shortest/Term Lowest Balance First Reduce from 10 – 7 You feel “better” Get rid of “Uncle George” Other ideas?
40. Advantages of Paying Highest Interest First Pay less interest Pay off quicker Other ideas?
41. Select Highest Interest First, Then Click Calculate Screen Example 41
42. Without Power Payments(Highest Interest First) 42
43. With Power Payments(Highest Interest First) 43
44. Bottom Line benefits (Highest Interest First) Time to Pay off Reduced by: 6 years Amount Saved in Interest: $6,314.92
45. Payment Calendar Example Scroll Down
46. Detailed Calendar Provides a month by month look at your debt elimination plan.
47. Click Payment Calendar Screen Example
48. Scroll down to see Detailed Calendar Last pmt $82.49
49. Lowes $100.00 To Master Card $264.95
50. Total Creditor Payback
51. Want to know Remaining Balance Interest Principal
52. Show Balance, Interest, Amount towards Principal Click on tiny box
53. For each creditor
54. PaymentCalendarQuestions?
55. Extra PaymentOption
56. Extra Payment Any additional money paid toward debts above the minimum amounts
57. Click Extra Payments Tab
58. Extra Payment Amount Start month Start year Frequency
59. Extra Payment Frequency One-time only Annually Semi-annually Quarterly Monthly
60. Example: Extra Payment Save Payment Information Press after each entry
61. Drop Down Menus Screen Example
62. Click Payment Calendar
63. Select Highest Interest First
64. Without Power PaymentsHighest Interest First 64
65. WithPower PaymentsHighest Interest First 65
66. PowerPay Benefits$50 per month $500 annually Time Reduction 6 years 5 months Amount Saved $6,955.12
67. Screen Example
68. Detailed Calendar with Extra Payment $50 extra $500 extra
69. ConsolidationOption
70. Select Consolidate Screen Example
71. Creditors to Consolidate Check creditors to consolidate Enter fees and penalties amount Calculate Amount to Be Consolidated 71
72. Screen Example
73. PowerPay Web site(Utah State University-Extension) https://powerpay.org

74. Best wishes as you explore Power Pay

    Marsha Marsha