DECLARE YOUR INDEPENDENCE OVER DEBT IN JULY
While our 2011
Independence weekend holiday (and summer, in general) means families getting
together for barbeques and parties, it also is an ideal time for families to
come together to discuss their credit and debt in the second half of the year.
Independence Day holiday marks the halfway point in the year, it is the perfect
time for individuals and families to decide want they want to accomplish financially
in the second half of 2011,” said Jane McNamara, president and CEO of GreenPath
some ways that people can take control of their debt and credit and set them on
the independent path to financial freedom in 2011.
Your Future - A
financial plan is a tool that helps reduce spending. It's a guide for spending
and saving based on a plan drawn up ahead of time. By developing a plan, you
will have more financial freedom and ability to get through financial
emergencies and to prepare for retirement.
Available Income - Determine
your total income by taking wages, pensions, public assistance, and investments
minus deductions like all taxes, social security, and health insurance
premiums. The total amount of money left after subtracting deductions from your
total income equals your available income. This will determine how much money
you really have.
Your Spending - Compare
recent and past spending patterns. This will remove the guesswork from
financial planning. Identify your past spending patterns by reviewing cancelled
checks, receipts, charge statements, and other useful records of expenses for
the past two to three months. Expense categories need to be identified as
"fixed" or "flexible." Fixed expenses occur at specific
times and rarely change. Flexible expenses fluctuate from month to month and
may possibly be altered to balance the plan.
Your Debts - Debts
that take first priority are the ones directly related to your ability to
survive, such as mortgages or other secured loans like auto loans. If you
default on these kinds of loans, you can face foreclosure or repossession. If,
for example, your car is repossessed, it may affect your ability to work and
adversely affect your income.
recommends prioritizing payments into three categories: high priority (housing,
child support, utilities, car loans); medium priority (personal secured loans,
student loans, home improvement loans); and low priority (loans for household
goods, credit cards, doctor’s bills).
Financial Goals - Before
you can create a plan for spending and saving, financial goals must be
established. Goals reflect values and provide direction for planning.
Establishing goals will help to balance needs and wants.
Both short-term and
long-term goals are important. Short-term
goals are things you would like in the next few weeks or next month. Long-term goals, on the other hand,
require long-range planning and are not obtained for at least a year or more.
Goals change continuously over a lifetime; as goals are reached, new ones
should be established.
a Budget - A
budget forces you to get your spending under control, to “live below your means,”
which is exactly what you’ll need to do to start eliminating your debt. The key
is to be realistic: You’ll need to make some sacrifices. Making little
adjustments to your lifestyle can add up to big savings. Be sure to give
yourself a bit of breathing room in your budget for unexpected expenses.
Cash for New Purchases - Unless
you pay off the entire balance every month, you are probably paying interest on
new purchases from the date of the purchase. If you stop using your credit
cards altogether, you will be able to reduce your debt more quickly. Because of
compounded daily interest, it is far better to use cash for the things you need
and adjust your budget to accommodate those expenses than to use credit cards
and then struggle to send large payments.
the Plan - The
plan will require periodic evaluations. Do not be surprised if in the
beginning, actual expenses are quite different from estimated expenses. Your
plan will become more realistic as you continue the process. A review should be
conducted and changes made every two to three months. If there is a change in
your finances such as divorce, death, children beginning or finishing school,
or parental care, the plan should be revised.
Your Family - Discuss
with those people within your household the things that are important to them.
Everyone in your house has a different priority and this will dictate how they
feel about money. Values influence your purchasing decisions. For example, one
person may prefer to spend money on entertainment, while another would rather
buy clothes. Understanding different priorities will allow you to deal
effectively with conflicts.
DEBT SOLUTIONS ANNOUNCES 2011 CLIENTS OF THE YEAR
GreenPath Debt Solutions recently announced its 2011
GreenPath Debt Solutions Clients of the Year.
Jerry and Sue Bailey of Jackson,
off more than $92,000 in credit card debt in a little over five and a half
years, through GreenPath’s debt management program. During the plan, they
endured physical setbacks, took on additional work to help with their plan and
made family sacrifices. Watch a five-minute video: Meet the Baileys.
Dawn and David VanDyke of
overcame obstacles, including family illness, in paying off more than $48,000
in debt in a little over four and half years through GreenPath’s debt
management program. Watch a five-minute video: Meet the VanDykes.
moved to Michigan some 20 years ago as a widower, when he met Sue, a single mom
ten years. They married and brought together a literal “Brady Bunch” family of
six kids. Jerry recalls coming home from their honeymoon and seeing six noses
pressed up against the living room window, awaiting their arrival.
said that, at the height of their credit history, they had 17 credit cards in
rotation. “It was so easy to get a credit card with a high limit at the time,”
he said. Debt started to pile up across the cards. Sue realized, in hindsight,
that something might be wrong when Jerry asked her to put their two daughters’
wedding receptions on credit. “That should have been a clue,” she said.
went by and Jerry found himself at his local credit union, looking for
financial assistance to get his debt under control. After discussing different
options, including bankruptcy, it was suggested that the Bailey’s reach out to
GreenPath for assistance. “We felt that bankruptcy was not an option, as it was
our Christian duty to pay back our debts,” Jerry said.
plan put in place
they met their counselor, a five-year plan was established. The couple recalls
that the first few years of the plan were difficult, as the decision was made
to take on more work to pay back their debts. Jerry got a second job at a local
hospital and put off fixing a second family car, to stay on track. Part way
through their debt management plan, Sue required extensive foot surgery and was
unable to work, which caused their income to drop severely, even with Jerry
working a second job. “We went to our GreenPath counselor, who worked with our
creditors in getting our payments adjusted for a few months, while Sue healed
and got back to work,” Jerry recalled. “That extra bit of help from GreenPath
really made the difference.”
about five years, the Baileys received the phone call that their debt
management plan was completed and they paid off more than $92,000 in debt. “I
was floored to get that call,” said Jerry. “I had to ask them to repeat that we
were truly done.”
summed up their GreenPath experience by saying “GreenPath saved our lives
financially, and gave our lives back to us.”
David and Dawn were first married, they lived in a small converted schoolhouse
in Niles, Michigan. After they welcomed their son, Jacob, now 9, they moved
into a larger house in Buchanan, Michigan, where their financial problems
owning a new, larger house, we ran up credit card bills quickly,” recalled
Dawn. “Originally, I convinced myself that this was the American way, getting a
bigger house and using more credit, but I soon realized things were getting out
of hand. The collection calls started and we were juggling month to month as to
who we were going to pay.”
reached out to the GreenPath office in South Bend, Indiana, a short drive over
the Michigan border. “We brought a mountain of paperwork to our first meeting,”
David explained. “We felt embarrassed not being able to pay off our debt, but
when we saw a huge plastic water jug filled with cut up credit cards, we
realized we weren’t alone.” But once their debt was added up to more than
$48,000, they knew something had to be done. The VanDykes signed up for a
GreenPath debt management program.
after their first appointment with GreenPath, their son, Jacob, suffered a
seizure and was diagnosed with epilepsy. “From that day forward he was in the
hospital 13 times in six months,” Dawn said. Furthermore, in order to care for
Jacob, Dawn and David made the decision that she would resign from her job for
six months. Despite the setback, the couple continued their debt management
remembers that the first year on the debt management program showed slow, but
steady, progress. They made the monthly payment their priority payment. Each year, on the anniversary of their first
visit to GreenPath, they would meet with their counselor to monitor their
progress. “It was great to see the total
drop,” said David. “Once we got under $10,000, we really felt that we were
going to make it.”
Walker, GreenPath’s South Bend group manager, recalled that there were times
when the VanDykes came up with extra money and would make the 25-minute drive
to present the money in person to pay down their debt even quicker. “They were
very serious about keeping up with payments and put any extra money they could
towards paying off their debt,” said Walker.
Back – Asking For Help Is the First Step
July, the VanDykes made the final payment on their debt management plan. They
drove to GreenPath’s office in Mishawaka, Indiana, to watch their debt numbers
be zeroed out. “We did a big cheer on that day,” Dawn said.
couple stresses how important it is for people in debt to be honest with
themselves and not be afraid to ask for help. “GreenPath helped us with paying
all our bills each month, it took a lot of pressure off us,” David explained.
“Today, being debt free, we feel we can pay off anything.”
couple is working on other debts. Today, they take what was their monthly
GreenPath payment and have paid off David’s truck. “Now we are going to work on
paying down our home equity and then we’ll tackle school bills next,” said
Dawn, with a smile.
ARTICLE: 100-YEAR-OLD SHARES
FINANCIAL ADVICE AND 1913 BANKBOOK
Associated Press story featured an Ohio woman, who recently turned 100 years
old, taking customer loyalty to the extreme. She's still using a bank savings
account that's been around since the year before World War I.
Gregg recently mentioned to a friend that her account is the same one her
father opened for her in January 1913, when she wasn't even a year-and-a-half
still has the little blue passbook from when the account was opened with an
initial deposit of $6.11. Her father, a farmer who grew corn, wheat and hay,
was a Savings Bank customer and wanted his only daughter to learn thrift.
shared financial wisdom for the ages when she remarked, "That's what he
always taught us: to stay out of debt and save our money and not buy anything
until we had the money to pay for it.”
lessons are the same ones shared everyday by GreenPath counselors and clients.
is proud to announce an all-new way to learn about your finances. We have
created GreenPath University, a comprehensive educational website that includes
over 250 personal finance articles, educational videos, interactive
calculators, fun games, interactive e-courses, and useful worksheets.
online educational website was created to provide you with high-quality,
friendly, and free financial information.
Every article was written by GreenPath financial counselors, and the
site contains our best advice and links to resources. Come learn more about credit scoring,
budgeting, buying a car, refinancing, and much more! Log on to www.greenpath.com/university.
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