Certified financial planner David Jackson met with Philippe Brunelle and Autumn Knowlton with an initial goal of addressing debt and savings...
Certified financial planner David Jackson met with Philippe Brunelle and Autumn Knowlton with an initial goal of addressing debt and savings.
The two owe about $55,000 to 15 creditors, from a loan from a friend to student loans.
“They were feeling completely overwhelmed,” said Jackson of Harvest Capital Advisors in Bellevue.
“There was a real sense of hopelessness. Once we walked through how to get moving on this, they completely lit up.”
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• Paying off smaller debts first, by setting aside $800 a month for payments, “giving them small victories,” he said.
• Make minimum payments on the larger debts while paying off the smaller obligations.
• Use the money saved from paying these debts to “snowball” into reserve funds that can be applied to pay other debts and save.
• Create savings by making an initial investment of $1,000.
“They wondered if they should use everything to pay off debt,” Jackson said. “But if something goes wrong, say an engine goes out in their car, then they haven’t saved anything and it’s a psychological defeat.”
• Put 5 percent of their pay into their employers’ savings plans. Even though the funds aren’t matched by the employers, Jackson advocated the move to get them in the habit of saving.
• Stop using all credit cards. He said studies show people spent as much as 18 percent more using credit cards compared with using cash or debit cards.
• Set up a $1,700 monthly budget for discretionary expenses that can grow or shrink depending on their financial needs and goals.