Here’s a scary figure for you.

According to this article from CNBC, the average consumer debt for a U.S. household is an astounding $90,460. Consumer debt includes various products like credit cards, mortgages, car loans, and student debt.

Having some debt is not a bad thing (mortgage and student debt, particularly) – as long as you can stay on top of it.

What really hurts is unnecessary high-interest debt like credit cards – with the range being about 12%-25%.

If your debt gets out of control, you could be paying a fortune in interest fees, so your quick tip for the day is to pay off high-interest debt as soon as you possibly can.

Let’s do a little case study, and I think you’ll see why this is a wise course of action:

Joe and Moe both owe $10,000 on a credit card with a 17% annual interest rate.

Joe makes the minimum monthly payment of $150. Moe is absolutely crushing it by paying $750 per month.

Joe will take 17.2 years to pay that debt off and pay $20,819.96 in interest fees alone.

Moe will take 15 months to pay off his debt and pay just $1,162.12 in interest!

(You can find out what your debts are really costing you by using an interest calculator like this one. You just need your balance and interest rate to figure it out.)

It can seem super daunting to figure out which debts to pay off first and how it ties in with preparing for the really good stuff – retirement.

The good news is that if you’re reading this – you know someone who can help you put all the pieces of the financial puzzle together to create a plan you can stick to and count on. Call 513-563-PLAN (7526) or click here to book a chat today.

Regards,
Nikki Earley, CFP®