2 of 5 Questions To Help You Get Out Of Debt

What Is Your Debt Vs. Income Ratio?

After you helped me understand the reason's for your debt, I would then ask you "what is your debt vs. income ratio".

I would ask your debt vs. income ratio to plan your strategy for victory in your war on debt .

In Glenda's case, her total debt was only around $1,800. She owned her home and car, so that wasn't a problem financially. The problem was that the majority of Glenda's debt was from interest was being stacked up like sand bags on the shore.

Glenda's was making $1,980 per month so a $50 payment wasn't hurting her finances in the short term. But in the long term, her interest rate of 29.99% was defeating her dreams for early retirement.

I asked my self, "what can I do to help her get out of debt"? In Glenda's case, I recommended that she do a balance transfer to a card with a lower interest rate. The problem was Glenda was once bitten by a credit card and now twice shy, so she declined that offer.

Plus, honestly a lot of my client's are skeptical about everyone, because they trusted themselves or someone else before and ended up in debt.

I tried to convince Glenda that moving her money to a lower interest rate card would save her all of her interest - every single penny. I had some cards in mind that provide Glenda with world-class service and have great long term low interest rates.

Glenda didn't want another card. Period.

I said "OK, you're the client, let's move forward," and I gave her my final option. But this option was awesome.

I recommended that Glenda make a statement payment plus $30 every month, meaning that Glenda would pay $30 more than her minimum credit card payment each and every month, until the bill was paid.

Glenda said, "oh my" when I showed her how making a minimum payment plus $30 every month, would reduce her total payment's on that credit card from 1,242 payment's to only 55 payment's.

Glenda was shocked and amazed when I showed her that by making her minimum payment's plus $30 each month, would save her $29, 316 in interest.
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Glenda agreed that she could easily make an extra payment of $30 every month.

What I did was show Glenda, in living color what she could do to eliminate her debt in a fraction of the time, without defeating her dream of an early retirement. But what it was based on was her debt to income ratio.


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