Steve Repak

The four letter word (Debt!)

It is extremely hard to accumulate wealth if you have credit card debt!  Every day, people are getting further and further into debt.  If you do not carry a balance on your credit cards then you are at least on the right track, but if you are one of the many who do carry a balance you need to change your habits now before it’s too late.

In my younger days I accumulated over $32,000 of credit card debt while serving in the US Army.  I didn’t accumulate it overnight but it was something that kept adding year after year.  Hopefully most of you who are reading this do not have the amount of debt I had, but trust me; it can easily sneak up on you if you don’t make changes now!

Let’s say you wanted a big screen TV.  The TV is on sale and the price of it is $1,000.  If you happen to be someone who might not have the best credit, your card might charge you 18% APR. 

Consider the following. If you just pay the minimum payment, it will take you 19 years to pay it off.  After those 19 years, you not only paid back the $1,000, you also paid $1,931 worth of interest.  That $1,000 TV you bought 19 years ago really cost you $2,193!

There are not any secrets to get out of credit card debt.  It only takes 2 steps. 

Step #1   Quit Charging… you can’t get out of debt if you continue to add more debt.

Step #2   Don’t just make the minimum payment… if you make only the minimum payment, it will take you a very long time to pay it off and you don’t even want to know how much interest you paid.

I have always believed that you have to set goals, make a plan to reach those goals, and finally put it all in writing.  No shortcuts and no easy ways out.  It will take some work but it will be worth it at the end.

If you your goal is to get out of credit card debt, I would strongly encourage you to go to:  www.powerpay.org   

This site was developed by Utah State University.  It won’t cost you a dime except for your time.  You don’t have to pay a debt consolidation services or a credit counselor.  This is something you can do on your own. 

You can put together a plan that you can follow and track to finally pay off all of your credit cards!  Your first step is to do it now.  Every day you wait, you go further and further into debt.

You have been given the knowledge.  Now it is up to you to apply it!

“The Why”

Why does it take a financial crisis for people to start thinking differently about money?  Something I have found through my years of helping others manage their finances is that it doesn’t matter how much people have or how little they have, there is one thing in common.  They both worry about money.   I work with two groups of people; the people who have more and the others.  Both of these groups have the same aspirations and same worries.  Everything is relevant when it comes to life or money.  People who have more, don’t realize how much they have and the people that have less don’t realize that they have more than people that are even less fortunate.  It seems that everyone compares their lives to people who appear to have a little bit more.

To get back on track, I had my eyes opened wide when I took on a consulting job as a contractor for a company that provides financial counseling services for the Department of Defense (DOD).  For the last 10 years or so, my primary job has been working with the people who have more, which I still do, but for the last eighteen months consulting for the DOD, I have been working with people who work so hard and sacrifice so much, yet they have trouble managing their finances.  I enlisted in the military straight out of high school and remember how hard it was for me and the financial troubles I got myself into.  The financial trouble I got into wasn’t because I did not earn a decent living; it was because nobody ever taught me a few simple rules regarding finances.

Rule # 1    When you subtract your bills from your income, you better have money left over.

Rule #2     You need to take the extra money that you have left over and either save it or invest it.

Rule #3     If you don’t follow rules #1 and #2, you will end up with financial problems.

My goal is to provide relevant information that can be applied immediately.  I cannot force people to change their behaviors but I can provide the knowledge and the steps necessary to get a financial house in order.