Thursday, March 24, 2016
Take interest: Households spending a small fortune on interest
Debt can be a budget buster.
The average U.S. household pays $6,658 in interest each year—which is 9 percent of the average household income ($75,591), according to a recent report by NerdWallet.
If interest payments are weighing you down, consider these tips from Marcie Winkelman, consumer/real estate lending consultant at Dupaco’s Peosta, Iowa, branch:
Consolidate high-interest debt with a Low Interest Consolidation Loan
“Any time you pay interest, you want to pay as low a rate as you can,” Winkelman says. “If you can find a way to consolidate your debt, that’s the best way to go.”
Credit cards, especially store cards, and other unsecured debt carry higher interest rates. Find out whether you’re a good candidate to consolidate your high-interest debt by utilizing one of the following:
Reevaluate your spending habits and learn how to reduce debt
When you restructure your debt, it’s also important to take a closer look at how you’re spending your money.
Be open to cutting unnecessary expenses to put less stress on your budget. If your debt includes credit cards, shred them, Winkelman suggests.
A free Dupaco Money Makeover can help you review your entire financial picture, using strategies such as budgeting assistance and developing a savings plan to help you meet your financial goals.
Winkelman recently began using a spreadsheet to track every dollar her family spends. While she doesn’t plan to do this long-term, it’s been an invaluable experience.
“It takes a little discipline to take a really good look at what you’re spending,” she says. “But it’s been good for me. When you keep track of your spending this way, it makes you more cognizant of where your dollars are really going.”
Empower yourself with financial education
As a Dupaco member, there are a variety of ways you can learn how to build your credit score to pay less interest in the future.
During a free Credit History Lesson, a Dupaco professional will review your credit report with you one-on-one and provide confidential tips on how to drive up your score.
Members also have access to free credit score monitoring through Dupaco’s Bright Track, available within Shine Online Banking. Not only does Bright Track provide access to your credit score, but it also provides tools to help you improve your score.
“Bright Track is making people much more aware of their score,” Winkelman says. “It’s a great tool to take advantage of.”
By Emily Kittle