1. Debt to Dollars © The Money Professors (TM) www.TheMoneyProfessors.com 2013 Career and Technical Education Summer Conference Len Rhodes M.B.A. C.P.F.M. Mark C. Weitzel M.B.A. C.P.F.M. July 25, 2013

2. Debt to Dollars  My First Credit Card  $1500 Balance, $25 Minimum Payment  18.99% Interest Rate © The Money Professors (TM) www.TheMoneyProfessors.com

3. Debt to Dollars  My First Credit Card  $1500 Balance, $25 Minimum Payment  18.99% Interest Rate  16 Years to Pay Off © The Money Professors (TM) www.TheMoneyProfessors.com

4. Debt to Dollars  My First Credit Card  $1500 Balance, $25 Minimum Payment  18.99% Interest Rate  16 Years to Pay Off  It Gets Worse  $25 X 12 X 16 = $4800 © The Money Professors (TM) www.TheMoneyProfessors.com

5. Debt to Dollars  My First Credit Card  $1500 Balance, $25 Minimum Payment  18.99% Interest Rate  16 Years to Pay Off  It Gets Worse(er)  $25 X 12 X 16 = $4800  $25 PMT at 9.6% APR for 16 Years = $11,300 © The Money Professors (TM) www.TheMoneyProfessors.com

6. Debt to Dollars  My First Car Loan $291 PMT5 Years12.25% APR=$13,000 - 25 PMTMasterCard PMT $266 PMT5 Years13.65% APR=11,522 COST$ 1,478 © The Money Professors (TM) www.TheMoneyProfessors.com

7. Debt to Dollars  My First Car Loan $291 PMT5 Years12.25% APR=$13,000 - 25 PMTMasterCard PMT $266 PMT5 Years13.65% APR=11,522 COST$ 1,478 © The Money Professors (TM) www.TheMoneyProfessors.com

8. Debt to Dollars  My First Car Loan $291 PMT5 Years12.25% APR=$13,000 - 25 PMTMasterCard PMT $266 PMT5 Years13.65% APR=11,522 COST$ 1,478 © The Money Professors (TM) www.TheMoneyProfessors.com

9. Debt to Dollars  My First Car Loan $291 PMT5 Years12.25% APR=$13,000 - 25 PMTMasterCard PMT $266 PMT5 Years13.65% APR=11,522 COST$ 1,478 © The Money Professors (TM) www.TheMoneyProfessors.com

10. Debt to Dollars  My First Mortgage $1,200 PMT30 Years6.25% APR=$194,895 - 266 PMTCar PMT - 75 PMTMasterCard PMT $ 859 PMT30 Years6.75% APR=132,440 COST$62,455 © The Money Professors (TM) www.TheMoneyProfessors.com

11. Debt to Dollars  My First Mortgage $1,200 PMT30 Years6.25% APR=$194,895 - 266 PMTCar PMT - 75 PMTMasterCard PMT $ 859 PMT30 Years6.75% APR=132,440 COST$62,455 © The Money Professors (TM) www.TheMoneyProfessors.com

12. Debt to Dollars  My First Mortgage $1,200 PMT30 Years6.25% APR=$194,895 - 266 PMTCar PMT - 75 PMTMasterCard PMT $ 859 PMT30 Years6.75% APR=132,440 COST$62,455 © The Money Professors (TM) www.TheMoneyProfessors.com

13. Debt to Dollars  My First Mortgage $1,200 PMT30 Years6.25% APR=$194,895 - 266 PMTCar PMT - 75 PMTMasterCard PMT $ 859 PMT30 Years6.75% APR=132,440 COST$62,455 © The Money Professors (TM) www.TheMoneyProfessors.com

14. Debt to Dollars  My First Mortgage $1,200 PMT30 Years6.25% APR=$194,895 - 266 PMTCar PMT - 75 PMTMasterCard PMT $ 859 PMT30 Years6.75% APR=132,440 COST$62,455 © The Money Professors (TM) www.TheMoneyProfessors.com

15. Debt Takes Away Our Choices © The Money Professors (TM) www.TheMoneyProfessors.com

16. Why Do We Borrow? © The Money Professors (TM) www.TheMoneyProfessors.com

17. Why Do We Borrow? © The Money Professors (TM) www.TheMoneyProfessors.com We don’t control our spending

18. Why Do We Borrow? © The Money Professors (TM) www.TheMoneyProfessors.com Consolidating is NOT paying off.

19. Why Do We Borrow? © The Money Professors (TM) www.TheMoneyProfessors.com Consolidating is NOT paying off. DEBT

20. Approval Affordability © The Money Professors (TM) www.TheMoneyProfessors.com Why Do We Borrow?

21. Why Do We Borrow? Reasons for Indebtedness  Keeping up with the Joneses  The use of money to punish.  Need for instant gratification.  The expectation of instant comfort among young couples who overuse the installment plan.

22. Why Do We Borrow? Reasons for Indebtedness  Lack of communication among family members.  The amount of finance charges is too high.  We are mentally trained to spend.  Overindulgence of children.

24. Defeating Debt  You are never in too deep to lose hope!  You can pay off $10,000 of debt in less than 2 years with just a part time job! © The Money Professors (TM) www.TheMoneyProfessors.com

25. Defeating Debt  You are never in too deep to lose hope!  You can pay off $10,000 of debt in less than 2 years with just a part time job!  Common strategies:  Pick up a part time job (taxes)  Sell stuff on eBay or Craig's list  Become a smarter consumer  Above all else… stop borrowing! © The Money Professors (TM) www.TheMoneyProfessors.com

26. Defeating Debt © The Money Professors (TM) www.TheMoneyProfessors.com

27. Defeating Debt  Assess your current debts (list or work in Excel)  Who do you owe?  How much do you owe?  What is the interest rate?  What is your monthly payment? © The Money Professors (TM) www.TheMoneyProfessors.com

28. Defeating Debt  Contact your credit card company(ies)  Ask for rate reduction  Ask to speak to a manager or customer retention specialist  Move money to a lower rate card  Beware of transfer fees © The Money Professors (TM) www.TheMoneyProfessors.com

29. – Start with the smallest debt (easiest way) – Start with the highest interest rate (financial) Defeating Debt  There are 3 ways to eliminate debt  Just pay them off naturally (most expensive) © The Money Professors (TM) www.TheMoneyProfessors.com

30. Defeating Debt  Pay off your first debt faster  Now you can add the previous payment to the next debt  Don’t get discouraged…look for the tipping point © The Money Professors (TM) www.TheMoneyProfessors.com

31. Defeating Debt What happens when we add extra money onto the minimum payment. The Tipping Point The key is to focus on one debt at a time like a laser. © The Money Professors (TM) www.TheMoneyProfessors.com

32. Defeating Debt The 50% Solution Aggressively pay off debt while giving yourself a break After each debt is paid off, enjoy 50% of the extra and use the other 50% towards your Debtor-ADE © The Money Professors (TM) www.TheMoneyProfessors.com

33. Defeating Debt Control Spending  Envelope System (cash-based)  Create one envelope per category to track  Put monthly amount in at the beginning of the month (if possible) or with each paycheck  Only pull money out of the envelope for that category – when its gone, you’re done! Simple! © The Money Professors (TM) www.TheMoneyProfessors.com

34. Debt to Dollars Go home today and list your debts Start tracking your total balances each month on paper Use at least one of the Debtor-ADE strategies Raise cash to retire debt Add to the minimum Highest interest rate Lowest Balance 50% solution © The Money Professors (TM) www.TheMoneyProfessors.com

35. Debt to Dollars © The Money Professors (TM) www.TheMoneyProfessors.com 2013 Career and Technical Education Summer Conference Len Rhodes M.B.A. C.P.F.M. Mark C. Weitzel M.B.A. C.P.F.M. July 25, 2013