facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause
Military Finance 101: Controlling Your Debt Thumbnail

Military Finance 101: Controlling Your Debt

Managing Your Finances

today's Blog Post Was Written by Financial Coach Tonia Peasley


What is something 80% of Americans have but don’t want?

Nope, not a trick question…it’s debt.  Did you know that 80% of Americans have some type of debt they owe?  Broken down, if you owe someone for property, services, etc., you are one of the 262,560,000 Americans who have debt.  Total consumer debt in the U.S. is at $14.1 trillion, with Americans carrying an average personal debt of $90,4601. Now, I’m all for being part of something, but I think we all want to do our best to “social distance” from being part of this group. 

Debt doesn’t have to be something that consumes you.  As a Financial Coach, helping people conquer debt is one of the hardest tasks I encounter. Why is that you ask? Building up debt often comes from habits, and habits that are not good for you are hard to break.  Paying off debt isn’t a “one size fits all” kind of approach.  Sure, you’ve heard all about the approaches of “pay off the largest debt first” or “pay off the highest percentage rate so you can save more money in the long run”.  We can absolutely explore those routes, but there is more to paying off debt than a simple formula.

When I coach individuals, I pay attention to their individual needs.  If I suggest one way and it really doesn’t work well for that situation and the individual, we won’t make much progress.  My goal as a Financial Coach is to find the tools and resources that work specifically for each person’s situation and then play off that success.  

 Let’s say you have $1,000 in medical debt, $1,800 in credit card debt, and a $20,000 in a car loan.  Let’s leave interest rates out of the equation and get down to business of making a dent in the debt owed.  Conquering that small medical debt serves two purposes; medical debts are important to catch up on as you never know when your luck is going to run out and a fall might send you to the ER.  Although you won’t be turned away for service, no one wants to get behind on medical bills.  The second idea here is, throw as much money at the smallest debt as possible, pay it off, and experience that feeling of accomplishment.

 You are now motivated to keep paying off the other debts.

Now, you will only have two payments instead of three. Therefore, more money can be paid toward the second one and a faster payoff will happen of debt #2.

 Let’s talk about Who has debt. Take a look at this table, it might surprise you:

Average American debt by age2

Age group                                                                                                                    

Average debt

18–23 (Generation Z)                                                                                                

$9,593

24–39 (Millennials)                                                                                                    

$78,396

40–55 (Generation X)                                                                                                

$135,841

56–74 (Baby Boomers)                                                                                              

$96,984

75 and above (Silent Generation)                                                                          

$40,925

 

Interesting enough, debt is something that affects most of us at one point or another in the process of life.  The key is conquering debt and the urges to take on more debt. Building debt will definitely do one thing for you, it will affect decisions down the road or limit your abilities to really accomplish the goals you might have.  An accountability partner goes a long way in helping you stay on track toward reaching your Financial Goals.  Invest in yourself and give me a call, I’d love to help.

 1 https://www.bankrate.com/finance/debt/average-american-debt/

2 Source: Experian 2019 Consumer Debt Study




Disclaimer
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by C.L. Sheldon & Company, LLC ), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. C.L. Sheldon & Company, LLC does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to C.L. Sheldon & Company, LLC website or incorporated herein, and C.L. Sheldon & Company, LLC takes no responsibility therefore. All such information is provided solely for convenience, educational, and informational purposes only and all users thereof should be guided accordingly. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from C.L. Sheldon & Company, LLC . To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. C.L. Sheldon & Company, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the C.L. Sheldon & Company, LLC ’s current written disclosure statement discussing our advisory services and fees is available for review upon request. DISCLAIMER OF TAX ADVICE: Any discussion contained herein cannot be considered to be tax advice. Actual tax advice would require a detailed and careful analysis of the facts and applicable law, which we expect would be time consuming and costly. We have not made and have not been asked to make that type of analysis in connection with any advice given in this blog post. As a result, we are required to advise you that any Federal tax advice rendered in this blog is not intended or written to be used and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS. In the event you would like us to perform the type of analysis that is necessary for us to provide an opinion, that does not require the above disclaimer, as always, please feel free to contact us.