By Lauren Chaplin, AFC® Candidate, FINRA Military Spouse Fellow
When it comes to personal finances, everyone has a favorite tool or system. Whether it be traditional pen and paper, Excel spreadsheet or an app on one’s phone, having some sort of visual to help see goals and the ‘light at the end of the tunnel’ can really motivate individuals to get their finances in gear.
Getting out of debt is often a top priority for many people. Powerpay.org is a secure site that offers those who want to get out of debt the “tools to develop a personalized, self-directed debt elimination plan.”
Powerpay.org does not link to the user’s individual accounts, which is something I personally prefer. Rather, it requires the user to enter only necessary information about his or her debt.
To use this site (after developing a profile):
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The user must know all their debts, their payoff amount, the interest charged, and what their minimum payments are (something every monthly statement will report).
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Under the PowerPay tab, the user will enter this information into the table.
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Once everything is entered, the total amount paid to the debts, how much interest is paid in total and the payoff time is shown. As an example for my family and our debts (I’ll spare you the specifics), our payoff time is five years seven months (if making just minimum payments) and a total of about $1,900.00 in interest paid to our creditors.
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Next, the user will want to click on is the Payment Calendar. This is where the Power Payments are applied. The power of Power Payments is that “… as soon as one debt is paid off, apply the monthly payment from that debt to the next debt.” The user decides what order the Power Payments are applied: highest interest first, lowest balance first, shortest term first, or how they were entered by the user.
Each suggestion/scenario will show you how much time and money you save if you apply Power Payments. In my example, using lowest balance first, my family will save four years off of our loan payments AND about $1,221.00 in interest payments!
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A detailed calendar is also given to the users to show how the repayment plan would work if they are able to stick with it.
The site has other great resources, such as a Spending Plan tab to help budget monthly expenses to possibly find more money to go towards debt payments. The PowerSave tab helps users jump start their savings and have a plan for the money they will save using the site. There are also six different Calculators to play around with and an Education Center with great resources on all types of personal finance topics.
Tap into the power of Powerpay.org today. The debt-elimination possibilities are endless!