The simple, fool-proof method for paying off debt
If it seems like you’ve always been in debt and there’s just no way to get out, take heart: There is a solution to becoming debt free.
Can you imagine a life without debt? A life where you’re not paying for yesterday’s expenses, but instead can use everything you earn for today, and possibly put something away for tomorrow, too?
Here’s the good news: It can be done! The method for paying off debt is as simple as it is effective. However, it requires that you follow two steps consistently, and it will not happen overnight. Unfortunately, there is no magic bullet for wiping the slate clean. Stick to it, though, and you’ll be thrilled with the results.
How to get out of debt in two steps
The first step is to stop taking on more debt—no more buying things you don’t have the money for right now.
The second step is designating 20 percent of all income to pay down debt. No more, and no less. This means you’ll be living off 80 percent of your income until everything is paid off.
It would be wonderful if you could put another 5 to 10 percent away in savings so that, should an emergency arise, you’ll have the funds to get you through without having to borrow again.
This idea was presented in George Samuel Clason’s book, “The Richest Man in Babylon,” an excellent and quick read for anyone who might be interested in smart money management.
Becoming debt free: Not all debt is created equal
When developing you plan on how to get out of debt, make sure you differentiate between collateralized debt (home loans, auto loans, etc.) and uncollateralized debt, such as credit cards. Most collateralized debt is fine (provided you’re buying a car or home you can afford) and may be difficult to do without. The other type of debt has no place in your life.
If you’re challenged with uncollateralized debt, come in to discuss our Debt Consolidation Loans. We offer a fixed-rate unsecured personal loan to pay off your high-rate credit card or store card debt from the holidays.
- Borrow any amount up to $20,000 at a fixed rate as low as 6.74 percent APR* for 48 months.
- When you refinance your debt from another financial institution you can receive 1 percent cash back up to a $1,000.
- Easy online application process; visit greatealliance.org/apply and have your loan signed via DocuSign without ever stepping into a branch.
Get help with more than paying off debt
Looking for more professional help? We have partnered with GreenPath Financial Wellness to improve the financial health for all our members. For example, GreenPath doesn’t just help people manage debt. They empower them to reduce stress, stop living paycheck to paycheck, and take control of their financial future.
Their overall goal is to become the financial health partner that consumers turn to through all phases of their lives.
They will provide personalized services and proactive education for people to anticipate their financial needs and prepare accordingly, before a personal finance crisis hits. They will work closely with members who want to make informed financial decisions regarding important life events like marriage, birth of a child, retirement and more.
We at Greater Alliance Federal Credit Union also offer a personal financial tool, Money Management. Forget about logging into multiple accounts to view your finances and spending. Everything you need to know is in one secure location. Money Management connects your GAFCU accounts, along with other accounts such as credit cards, loans, investment savings or checking accounts from another financial institution , so that you see your total financial picture. The tool allows you to set budgets, track your spending and debt load, and set goals. It’ll help make your financial future bright!
Become Financially Fit with Money Management
*APR=Annual Percentage Rate. 6.74% rate refers to individuals who qualify and open a checking account with payroll deduction/direct deposit. At 6.74% on a $7,500 loan with a 48-month term, the monthly payment is $178.71. ALL borrowers must have or open a share (savings) account and are required to maintain a minimum balance of $100 in their personal savings account after their first six months of becoming a member. A full credit check will be required for all borrowers. All advertised rates are subject to individual qualifying factors and subject to change without notice.