http://ilantoledano.com/| Americans are drowning in debt, however, there are several moves they can take to set their financial house in order. View Ilan Toledano’s presentation to help you in your time of need.
2. Debt Crisis
Total consumer debt – that includes mortgages, car loans,
credit cards, etc. – stands at about $11.4 trillion. The Great
Recession forced many Americans to go deeper in debt to save
their homes, keep their cars, and put their children through
school. Although the economy is technically in recovery, few but
the wealthiest are seeing any upside to their financial situation.
Good debt management practices can help many consumers
pay down debt and get their head above water. By making a
few prudent moves, consumers can reduce their debt load, find
more flexibility in their monthly budgets, and improve their credit
scores.
3. Tip #1
The more you kick into your monthly debt
payments, the less interest you will pay, and
the quicker you will discharge the debt. Start
inching up how much you pay on your debt
each month by eliminating unnecessary
expenses and applying them to your financial
obligations.
Pay More Than The
Minimum
4. Tip #2
If you have a low interest credit card with
enough available credit to take on the
amount you have on a higher interest
card, consider transferring the balance.
Also inquire into consolidating student
loans or consolidating high interest debt
into one lower interest loan from a bank
or a credit union.
Consolidate Debts
5. Tip #3
Taking out a home equity loan may make
your debt more manageable and reduce
your interest rate. In many cases, you
can reduce an 18 percent interest rate to
7 or 8 percent with a home equity loan.
You can also deduct the interest from
your income at tax time.
Tap Your Home
Equity
6. Tip #4
It may sound counter to all good financial
advice, but if you can wipe out your debt
with your savings, it may be the right
long-term move. If your debt continues to
accumulate interest, it’s going to cost you
a lot. If you’re young and you can make a
substantial dent or pay the whole debt off,
cashing out and rebuilding later may be
the smart move.
Cash Out Your
Savings
7. Tip #5
The federal government will allow you to
borrow up to half of your 401K retirement
savings or $50,000. The upside is that
when you repay the loan, you’ll be repaying
yourself. You even get to keep the interest.
The downside: the loan must be repaid in
five years to avoid penalties and you’ll be
taxed on the interest later in life.
Borrow From Your
401K
8. Tip #6
If your life insurance policy has cash
value, you can borrow against that to
repay your debt. The interest rates are
low and you can take your time
repaying the loan. The downside is
that if you die before repaying the
loan, the balance is subtracted from
the payout to your heirs.
Borrow Against Your
Life Insurance
9. Tip #7
This should be a last resort, as it
will impact your credit score and
may also impact your job
prospects, but for consumers with
insurmountable debt, bankruptcy
may be the answer. Under a
Chapter 7 bankruptcy, all your
debts will be cleared. Under a
Chapter 13, you’ll have to repay
some of them over three to five
years before the rest are cleared.
Bankruptcy
10. About Ilan Toledano
Ilan Toledano is a respected engineer, having worked for the
Israeli aerospace industry. You can learn more about him at
www.ilantoledano.com
