Monday, March 26, 2012
FINANCIAL SPRING CLEANING
12:36 PM | 
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pensionfinancialservices |
Pension Parameters Financial Services, Inc. always salutes helpful pieces related directly or indirectly to retirement needs, and few would argue that debt—what burden it represents for you now and how it may impact you in the future—figures in that equation. We saw some great suggestions about making headway on personal debt in the Money Matters Newsletter on Military.com. Service veterans (active or inactive) and non-veterans alike can develop useful debt-combating strategies.
“Every year many of us spring clean our homes, hauling the junk out of our closets and only keeping things we really need. It's a good time to reflect on the things we own, what works well for us and what we want to keep,” says the article.
1. Take stock: Write down your current accounts, interest rates, balances, and monthly payments. If you can, find your balances from the previous month and note if you're increasing or decreasing your debt and by how much.
2. Do a stress test: Look at your debt payments relative to your monthly take-home pay. If you're paying over 36% to debt payments (include car leases and rent in the debt payments) you're probably over the amount that's healthy for you. A DTI calculator like Debtscore can help you perform these calculations.
3. Run debt-free scenarios: The secret with debt is that it's usually possible to pay off credit card debts in as few as 3-4 years by just continuing to pay what we do today and not charging more. And if we take that money we used to pay to credit cards and put it to the mortgage, we can pay that off in 10-15 years. Sometimes you can save over $50K in interest.
4. Lower your APRs: How are the APRs on your credit cards? If there's a big difference across your cards, this may indicate that some of your cards have rates that are too high. You may be able to negotiate lower rates with your lenders or you may want to look at new cards. With mortgage rates at historic lows, you should look at refinancing options.
5. Create a debt plan: Even if you don't want to create a detailed plan, set a goal for getting out of debt.
“Debt is part of your overall financial picture,” says Kevin McCormack, President, Pension Parameters Financial Services. “Anyone talking about retirement plans should be including debt as part of his or her overall financial picture.”
For more information on Pension Parameters, contact: Pension Parameters Financial Services, Inc.
28 West 44th Street
New York, NY 10036
Phone: (212) 675-9360 Fax: (212) 675-9363
New York, NY 10036
Phone: (212) 675-9360 Fax: (212) 675-9363
675 Line Road
Aberdeen, NJ 07747
Phone: (732) 583 -1313 Fax: (732) 583-6991
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