Tag Archive for: smart with debt

The Biggest Mistake I Made with My Debt in 2024

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Today we are going to discuss the biggest mistake I made with my debt in 2024. Even the most careful people can miss something small. That’s what happened to me this year. I thought I had everything under control, however one mistake cost me over $2,000 in extra interest. The good news? I learned a simple fix that anyone can use to save money and take back control of their debt.

Let’s break it down so you can avoid making the same mistake I did.

What Happened: Ignoring the Numbers

At the start of the year, I had a small mortgage of $55,000. It was an adjustable-rate mortgage at 8.125%, and I didn’t want to refinance because the balance was small. I also had a HELOC (Home Equity Line of Credit) with a fixed rate of 3.99%.

Here’s where I went wrong: I didn’t move the mortgage balance to my HELOC. At the time, it didn’t seem like a big deal, however over the year, I ended up paying over $2,200 in extra interest. That’s money I could have used for:

  • A family vacation
  • Christmas gifts
  • Paying off debt even faster

One quick switch could have saved me hundreds every month.

A Simple Fix: Move Debt Down to Lower Rates

This mistake got me thinking about other types of debt, like credit cards. Many people carry balances on credit cards with rates as high as 24% or even 29%. But you don’t have to keep paying those high rates.

Instead, look for ways to move your debt down to lower interest rates. Here are some options:

First, Personal Lines of Credit

  • Offered by banks and credit unions
  • Often between 10% to 13% interest

Second, Home Equity Loans

  • Fixed or adjustable rates
  • As low as 5% to 7%

Finally, 0% Credit Cards

  • Promotional offers (usually 12-18 months)
  • Watch out for transfer fees (around 4%)

Real Example: Saving $200+ a Month

Let’s say someone has $25,000 in credit card debt at 24% interest. Here’s how much they pay each month in interest:

  • Credit Card (24%): $500/month
  • Personal Line of Credit (13%): $281/month
  • Home Equity Loan (7%): $146/month
  • 0% Card (with a 4% fee): $0/month (after the transfer)

By moving the debt to a personal line of credit, they save over $200/month. Over a year, that’s $2,600 in savings! If they move to a 0% card, they save $6,000.

Why This Matters

Debt can weigh you down, but small changes can give you more money to:

  • Enjoy life (take that vacation!)
  • Save for the future
  • Pay off debt faster

Every dollar saved on interest is a dollar you can use to improve your life.

The Lesson: Check Your Debt Often

The biggest mistake I made in 2024 was not paying attention. Even a small mortgage or a small credit card balance can cost you thousands if you don’t move it to a lower rate.

Here’s what I recommend:

First, Review your debt every few months.

Second, Find better options: Look for lower rates, personal loans, HELOCs, or 0% cards.

Third, Make the switch: Don’t wait! The sooner you act, the more you save.

Be Smart with Your Debt

Debt isn’t the enemy. When you use it wisely, it can not only help you save money, but  to enjoy life more. But you have to take control. Don’t let the banks keep your hard-earned cash.

If you want help finding better options, check out our free tools at SmartWithDebt.com. We have calculators and guides to show you how much you can save.

Don’t wait like I did. Learn from my mistake and start saving now. Here’s to a smarter, debt-free 2025!

Watch our most recent video today to learn more about: The Biggest Mistake I Made with My Debt in 2024

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Pay Off Bad Debt

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Bad debt can feel like a heavy weight on your shoulders. High-interest credit cards, payday loans, or personal loans often come with big monthly payments that barely touch the balance. But there’s good news, you can pay it off faster with a plan.

Start by listing your debts, including the balance, interest rate, and minimum payment. Once you see it all in one place, focus on one at a time. Many people start with the smallest balance (the snowball method) or the highest interest rate (the avalanche method). Pick what works for you and stick to it.

Here’s an example: Lisa had three debts, a $500 credit card at 18% interest, a $2,000 personal loan at 12%, and a $10,000 car loan at 5%. She decided to tackle the $500 credit card first, paying extra every month while keeping up with the minimums on her other debts. Once the credit card was gone, she used the freed-up money to attack the personal loan.

It’s about building momentum. Each win helps you stay motivated. With a plan, bad debt doesn’t have to hold you back. You can take control and start working toward financial freedom!

Contact Us Today! 

Do you have “good debt” or “bad debt” in your life? Contact us today to find out more! 

Free Tools For You! 

We also have free tools available! Accelerate Debt Payments Calculator to see which option is best for you! 

Learn more!

Visit our YouTube channel to learn more about using debt instead of letting debt use you!

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Save Money with a Home Equity Loan

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Today we will explore how you can save money with a home equity loan. A home equity loan can be a smart way to save money while reaching your financial goals. Think of it like borrowing against the value of your home, but at a lower interest rate than many other loans or credit cards.

Example:

Here’s an example. Let’s say you’ve been dreaming of renovating your kitchen, but the cost is holding you back. Instead of putting the $30,000 project on a high-interest credit card, a home equity loan could help. With rates often lower than credit cards, you save big on interest, keeping more money in your pocket.

Another use:

Another way to use a home equity loan is to pay off higher-interest debt. Imagine you have $20,000 in credit card debt with a 20% interest rate. By replacing it with a home equity loan at, say, 7%, you could save thousands in interest over time. That’s money you could invest, save, or use to enjoy life.

Be careful:

But be careful! Borrowing against your home means your house is on the line if you don’t pay it back. Always run the numbers and have a plan before jumping in.

A home equity loan can unlock financial opportunities. Whether it’s funding a project or cutting down expensive debt, it’s a tool that could work for you.

Contact Us Today! 

Do you want to find out more about saving money with a home equity loan? Contact us today to learn some tips that can help you to achieve your goal quickly and easily!  

Free Tools For You! 

We also have free tools available! Accelerate Debt Payments Calculator to see which debt option is best for you! 

Learn more!

Visit our YouTube channel to learn more about using debt instead of letting debt use you! 

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Which is Best: Points or No Points?

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When getting a loan, you often hear about “points.” But what are they, and how do you know if they’re worth it? Which is best for you, points or no points? Let’s break it down.

What are they?

Points are upfront fees you pay to lower your loan’s interest rate. For example, let’s say you’re getting a $200,000 loan, and one point costs 1% of the loan—or $2,000. Paying that $2,000 could reduce your monthly payments because of the lower rate.

Be careful!

But here’s the catch: You need to stay in the loan long enough for the savings to make up for the cost. For instance, if paying points saves you $50 a month, it’ll take 40 months to break even ($2,000 ÷ $50). If you sell or refinance before then, you might lose money.

No points? That’s simpler. You’ll pay less upfront but may have a higher monthly payment. This can be a good option if you plan to move soon or want to keep your cash for other investments.

Which is best?

So, what’s best? It depends on your goals. Do you want to save now, or over the life of the loan? Knowing your plans can help you decide.

This choice might feel tricky, but with the right math and planning, you’ll find what works best for you!

Contact Us Today! 

Not sure which loan is best for you and your needs? Contact us today to find out more about how to turn your debt into your friend instead of your enemy! 

Free Tools For You! 

We also have free tools available! Accelerate Debt Payments Calculator to see which debt option is best for you! 

Learn more!

Visit our YouTube channel to learn more about using debt instead of letting debt use you!

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Credit Card Debt: How to Save Thousands Every Year

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Today we are going to discuss credit card debt and how to save thousands every year! The end of 2024 brought a surge in holiday spending, leaving many with growing credit card debt. With interest rates on credit cards skyrocketing, it’s crucial to make smart moves to reduce your costs. Let’s explore how to pay less interest, keep more money in your pocket, and get out of debt faster.

Step 1: Move Down the Ladder

Credit card interest rates are often the highest—averaging around 25%. If you carry a balance of $10,000, that’s $2,500 in interest annually! However, by moving this debt to a lower-cost option, you can save big.

Example: Credit Card to Personal Loan

  • Credit Card Interest: 25% = $2,500 per year.
  • Unsecured Personal Loan: Average rate ~13%.
    • New interest = $1,300/year.
    • Savings: $1,200 annually or $100/month.

That’s $100 back in your pocket every month—money for an extra night out or to pay down your debt faster!

Step 2: Leverage Home Equity

If you’re a homeowner with equity, consider a home equity loan or line of credit (HELOC). These loans typically offer lower rates, making them a great option for consolidating credit card debt.

Example: Credit Card to HELOC

  • Credit Card Interest: 25% = $2,500/year.
  • HELOC Interest: 8% = $800/year.
    • Savings: $1,700 annually.

Tip: Be cautious when using home equity. Don’t fall into the trap of paying off credit cards only to run them back up. The goal is to reduce your debt, not create more!

Step 3: Use 0% Balance Transfer Cards

Many credit card companies offer 0% APR on balance transfers for a limited time. Even with a 3% transfer fee, the savings can be huge.

Example: Credit Card to 0% APR Card

  • Credit Card Interest: 25% = $2,500/year.
  • 0% Card Fee: 3% = $300 (one-time fee).
    • Savings: $2,200 in the first year.

By paying off the balance during the 0% period, you save thousands in interest and accelerate your debt repayment.

Avoid Costly Mistakes

While these strategies can save you money, it’s important to avoid common pitfalls:

  1. Don’t Reuse Paid-Off Credit Cards: Stick to a budget to avoid accumulating new debt.
  2. Choose the Right Option: For example, a mortgage refinance might not make sense if your current rate is under 4%.
  3. Stay Focused on Repayment: Lowering your interest cost is just the start—commit to paying off the debt.

Make 2025 the Year of Financial Freedom

By moving down the ladder, you can reduce interest costs and get out of debt faster. Every dollar saved on interest is a dollar back in your pocket, helping you enjoy life more.

If you need help exploring these options, visit SmartWithDebt.com for personalized advice. Let’s make this the year you take control of your finances!

Share the Knowledge
If you found this helpful, share it with others! Help them get into good, healthy debt and save thousands every year. Together, we can keep more money in our pockets and less in the banks.

Watch our most recent video: How to Save Thousands Every Year to find out more!

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