![]() ![]() As a result of these arrangements, Author may financially benefit from referring potential clients to Empower and/or be incentivized to present blog content that is favorable to EPW. Additionally, in a separate referral arrangement between Author and Empower Personal Wealth LLC (“EPW”), Author is paid $70 and $150 for each person who uses Author’s webpage (to register with Empower and links at least $100,000 in investable assets to the Empower Personal Dashboard™. ![]() Author is not a client of Empower Advisory Group, LLC ("EAG"). ![]() Empower compensates Author for providing the content contained in this article. Tori Dunlap of Her First $100k (“Author”) uses and recommends the free Empower Personal Dashboard™. An honors graduate of the University of Portland, Tori currently lives in Seattle, where she enjoys eating fried chicken, going to barre classes, and attempting to naturally work John Mulaney bits into conversation. A Plutus award winner, her work has been featured on Good Morning America, New York Magazine, Forbes, CNBC, and more. After saving $100,000 at age 25, Tori founded Her First $100K to fight financial inequality by giving women actionable resources to better their money. Tori Dunlap is a millennial money and career expert. Know that you have resources on your side, such as financial professionals and free tools like the Empower Personal Dashboard. There’s no magical debt elimination button. Where you might get tripped up: stay consistent. This is why we set aside an emergency fund first, to cover us should something happen. It’s super hard to dig yourself out of a hole while at the same time, shoveling sand back in it. While we will be aggressively paying down our debt, it’s EXTREMELY important to not go into more debt, especially more credit card debt. In other words: Emergency Funds are for emergencies, credit cards are not. Do not try to aggressively pay down both at the same time, and do not spread your money between both of them! (This does not mean you stop paying your minimum payments as you should always pay at least your minimum payments on all credit card debt you have). Regardless, though, you need to pick one to focus your energy on. Personal finance is, yep, personal - choose what’s right for you. However, if you know you need to be seeing progress in order to stay motivated and to keep going- you may want to consider getting rid of the debt with a lower balance ($4,000) first. Many forms of advice would tell you to start paying down the one that’s costing the most interest, so in the above example, you should pay down the debt with 22% interest. Now you’re going to organize your debt in two ways: first by interest rate, then by the current balance.įor example, you may organize your debt like this:Ĭredit Card 1: 18.5% interest. You can log this in a spreadsheet, a notebook, or link your credit card accounts to Empower’s free financial dashboard to see your balances all in one place. This money step is a little like ripping off a Band-Aid…Grab yourself some wine and check your debt balances. You can also call customer service and ask. The easiest way to check your interest rate is by logging on to the company’s online platform and finding it there. This is one of those money steps that many people avoid, either because they don’t understand exactly what interest is, or simply don’t want to look at it (both are understandable.) The first step to paying off debt is knowing what your interest rates actually ARE. What to do with your debt, and when… Step 1 Student loans’ interest rates can range from 3-7%, making them much less expensive than credit card debt.īecause you have debt from two different sources, it’s important to figure out which one is more expensive for you right now so we can start paying that off first. Typically, credit cards can have an interest rate between 15-30%, which is usually considered high-interest debt. This is a question that I frequently hear - when you have any sort of debt, it’s hard to know what to do first (especially when it feels like you’re drowning.)Ī good way to determine what sort of debt you pay off first is the one that’s costing you the most, in other words, the one with the highest interest rate. So far, I’ve been putting an extra $50 towards my student debt, and then an extra $50 to my credit cards - is this a good idea?” All of it seems equally overwhelming, and I don’t know where to start. When you have two pieces of debt, how do you know which to pay off first? I have $35,000 of student loan debt, and $15,000 of credit card debt on two different cards. ![]()
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