Resolve to tackle debt this year

Nancy Nelson and Suli Muqit know that changing old financial habits takes work. Over the last year, they more closely monitored household bills and established an emergency fund. Is it time for you to make some changes, too?

Nancy and Suli won a Family Trust contest last year that encouraged folks to set financial goals for the year. And while they didn’t achieve all they wanted to, they did use direct deposit from both their paychecks to create the emergency fund.

“It’s been a tremendous asset,” Nancy said, adding it enabled them to help others in the family. “We were grateful we could do those things.”

Many members struggle with student loans, medical bills and credit card debt. Eating out less and setting priorities are good first steps. Consolidating debt with a personal loan also is an effective tool. Advantages include:

  • Make only one payment – Each credit card payment counts separately on your credit report. Miss three and that’s three strikes against you.
  • Improve your credit score – Paying off credit cards frees up capacity, which counts 30 percent of the score. Having an installment loan also can improve your mix of credit, which counts 10 percent.
  • Get out of debt faster – Your payments may be the same or even a little higher, but you’ll pay less in interest over the life of the loan and you’ll pay the debt off faster.

At Family Trust, our Member Service Consultants can review your credit report to see if you’re a candidate for debt consolidation. You’ll get one-on-one advice for your personal situation so that we can agree on the best plan for you. If a debt consolidation loan is a possible solution, we can help you with the application process. Once approved, we can use those funds to pay off the designated debts for you. You’ll make one payment to Family Trust.

The key isn’t to just pay off debt but to change your spending habits. Consolidating your debts can give you a fresh start but only if you’re committed to developing the required discipline going forward.

You can do it.