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Welcome to Thom & Associates Financial Planners Inc.
- We believe in respect and treating our clients like we would good friends.
- We believe in teamwork, like a family, where each of us offers strengths that benefit our clients and company alike.
- We also believe that:
CLIENTS COME FIRST! And we are dedicated to earning your trust and respect.
We encourage your thoughts and questions.
As credit card debt increases it can throw your life out of balance as stress levels increase. What can you do about it?
If you’re struggling with credit card debt, it makes sense that you want to pay it off quickly. The faster it is paid off, the better your credit…..the faster you can focus on saving money…..the sooner you can enjoy one less stressor.
However, paying it down fast may not be your primary goal. You may, instead, look to pay it down as cheaply as possible.
The cheapest way to pay off your credit card debt isn’t the same for everyone.
It depends on your debt balance, the interest rates you are being charged and your current assets. Let’s take a look at a few possibilities.
Use Your Savings
If you have a savings account, take a look at the amount of interest you’re earning on that money. Now take a look at the amount of interest you’re paying on your debt. If you’re paying more than you’re earning, consider cashing out your savings to pay off your debt. Wipe away your debt and then you can once again focus on building your savings. Without the monthly credit card interest payments, you may be able to rebuild your savings quite quickly.
Can you qualify for a debt consolidation loan? If so, at what interest rate? Compare the interest rate of a loan compared with the interest rate you’re paying on your credit card debt. Most often you’re paying credit card companies much more than you’d be paying for a personal bank loan. That being said, make sure once you’ve paid off your credit card debt that those cards get cut up or used sparingly. If you run up a balance on them again, you will be repaying the bank loan and high interest credit card debt again.
Home equity loans can be an option depending on the market, how much equity you have in your home and interest rates. Like a debt consolidation loan, you’re in danger of running up your credit cards again and paying on two loans simultaneously.
Home refinancing is also an option however, there are usually penalties associated if your mortgage is not up for renewal. At next mortgage renewal time consider a home equity line of credit, they can help with high interest debt and growth investment savings.
Borrowing from Friends or Family – for many this is just not an option.
The More Drastic
In all cases, if you have too much credit card debt you need to consider cutting back on your expenses and pay more than the minimum balance on your cards each month. This is often the most effective and cheapest way to pay off the credit card balance although usually the hardest for most people.
“Just paying it off” takes sacrifice from you and your family. Bringing in more income or reducing expenses by getting a second job, doing freelance work, selling your car or valuables, or moving into a cheaper home are some of the hardest decisions to make.
Just remember, the faster you pay off your credit card debt, the less interest you pay and the less stress you will feel. Reducing debt frees up money to save or spend on the special things in life. We can help, give us a call.
One thing that everyone can agree on is the value of financial security. In an uncertain economy, it is important to do all that you can to help solidify your financial future. This begins with goal-setting strategies towards that end.
Why Set Goals?
Just like with any other area of your life, goals give you a focus for your efforts. Without them, it is hard to plan for anything. In financial situations, lack of goals can lead to short-sightedness and inadequate funds for important things like college, retirement and vacations.
Now you know why we need to set goals, what are the goals you have in your life? Think just today’s or next month’s but in the long term; what do you want your money to do for you?
Financial Goal Setting
* Write it down – With the details just in your mind, they can be forgotten or ignored. Use a pencil so that you can change and modify them as needed. List them in no particular order but just get them down so you can move on to the next step.
* Make your goals specific – If you wrote something like “I want to buy a new car,” it is too vague. Create a strategy and set a timeline to be more specific. “I would like to save $3,000 towards a new car by December.” Now, we have a timeline and a specific money goal.
* Break down your goals – The above goal can even be broken into a smaller more manageable goals. If you are having trouble making ends meet today, saving $3,000 might as well be like saving a million. But, if you set short, medium and long-term goals to reach this ultimate financial goal, it is not so overwhelming and more manageable. So, here goes: “I want to save $500 every two months. I also want to meet a goal of $1,500 by mid-year. At the end of the year, I estimate that I will have saved $3,000 towards my new sportscar.” As an example.
* Read and research – Now that you have financial goals, find out more… Talking to a financial advisor can help you learn the right way to implement your goals with maximum gains and minimum effort. Financial advisors like Thom & Associates offer free consultations. Money magazines are also a good source of information.
* Evaluate and re-evaluate your goals – Every few months review your goals. Have they changed? Are you still on track to meet them by your deadlines? If not, what can you do going forward to meet them? You can readjust the timeline, add more cash, or change your expectations to account for changes in the economy and your life.
Work smarter not harder to achieve your financial dreams. With a little strategy you can enjoy a life full of endless possibilities. Thom & Associates can help, give us a call at 250-861-RRSP (7777).
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