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Debt Payoff Methods That Work: Take the 2019 Debt Payoff Challenge

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Debt Payoff Challenge
Paying off debt is difficult, but there are ways to make the experience a bit less painful. One of the most popular debt payoff methods is joining a group of like-minded individuals who share the same goal to get out of debt in 2019. A debt payoff challenge can ease some of the stress of paying down debt and provide support along the way.

You may have heard of the infamous 52 Week Money Challenge, which helps you save money over the span of a year (or whatever timeframe you choose). Just like saving money, you can pay off debt with a similar challenge.

What is a Debt Payoff Challenge?

This debt payoff method is similar to a money challenge except you’re paying off debt instead of saving money. Often, debt payoff challenges occur with a group of people.

Believe it or not, debt payoff challenges have proven to be successful, and have helped consumers pay off thousands of dollars in debt. It turns out, that if you approach paying off debt as a game or competition, difficult and daunting tasks like saving money or paying off debt become more interesting and easier to accomplish.

The Debt Payoff Challenge 2019

Just like money saving challenges, you can alter the debt payoff challenge to suit your specific needs. For instance, this year, you can take a 12-week debt payoff challenge and focus on smaller debts instead of the larger ones (i.e., student loans). If you have a debt amount less than $10,000, you could set your goal to pay off 35 percent ($3,500) of it over 12 weeks.

Many participants opt to snowflake their debt (one of the most popular debt payoff methods) when possible while sticking to a strict budget to reach their goals. It’s often helpful to use a downloadable debt payoff chart like this one to keep track of your progress.

Debt Payoff Challenge
It’s important to keep in mind that you can (and should) alter the challenge to suit your needs. For instance, extend the challenge over six months or a year, if that works better for you.

If you’re interested in taking part in the 12-week debt payoff challenge (or any debt payoff challenge) for 2019, here are some tips and ideas to keep in mind:

Pay the Smallest Debt First

This is often the most important piece of advice if you’re working toward paying off debt. First, it’s recommended that you have e a $1,000 emergency fund in place before tackling any debt. Then, you can begin paying off your small debts. For instance, if you have a couple of $100 medical bills that you need to pay, take care of those before tackling the rest of your debt. This tactic makes paying the big stuff easier because you’re no longer weighed down by the smaller amounts, and you get a sense of accomplishment early on.

Paying Off the Highest Interest Debt

Next, you should identify the high-interest debts you owe and pay those. For example, after paying off your small debts, work on credit card debt or student loan debt. If you have multiple debts accruing interest, you will want to focus on paying off those with the highest interest before the others.

Snowflaking Your Debt

You may have heard of “snowflaking” your debt. This means that any additional money outside of your base salary (i.e., birthday/holiday money, bonuses, additional income) goes toward your debt. If this type of debt payoff method interests you, you may want to also try the Debt Snowflake Challenge to pay off your debt this year.

Make the Debt Payoff Challenge a Priority

If you’re going to be serious about paying off your debt, any debt payoff methods you try should take priority. You should also create a new budget for the year, specifically with paying off your debt in mind. This could mean including a category for “additional bills” each week where you enter your debt payments. You might also need to scale down a few expenses such as transportation, entertainment, and beauty to make room for your debt payments. Or, even look for ways to make extra money.

Don’t Stress Yourself Out – Kill Your Debt

Although paying off your debt is a priority, be sure to make time for fun. If you spend all of your money paying bills and paying off debt, you’ll be miserable. When you make your budget out for your debt payoff challenge, be sure to budget some cash for entertainment or something you enjoy. After all, being well-balanced is important to personal finance.

Looking for a debt payoff challenge group? Join our forums and start paying off your debt today.

Photo: Sean MacEntee

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7 in 10 Would Rather Skip Buying Christmas Gifts: Here Are Some Alternatives

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alternatives to buying christmas gifts

It’s no secret that exchanging gifts and gift-giving are a huge part of the holiday season. However, if you’ve found yourself less excited about the entire process of exchanging gifts, you should know you’re not alone. It turns out, a lot of people would prefer to give up gift giving if their families allowed it and if they had any alternatives to buying Christmas gifts.

Nearly 70% Want to Skip Buying Christmas Gifts

According to a holiday survey in an online Harris Poll on behalf of Suntrust, a surprising 7 in 10 people said they’d skip gift-giving this season if it were okay with their friends and family. And, it isn’t just the Grinchy types who hate the season. For the most part, they would rather spend the time actually doing something with their friends and family members than on buying or making gifts.

Holiday Stress and Debt Compounded

For a lot of people, the holiday season comes with stress and anxiety. When you add the obligation of gift exchanges, a large number of Americans face a tremendous amount of financial anxiety. This means not only worrying about debt and money during the season but also feeling the pressure of spending money on things they really cannot afford.

In fact, this pressure to overspend has been proven to result in a mountain of debt after Christmas is over. And, with as many as 25 percent of Americans experiencing post-holiday depression, gift-giving and the financial aftermath can be especially difficult for many families.

Alternatives to Buying Christmas Gifts

So, if you decide to forego gift-giving, can you still have a joyous holiday season? The answer, of course, is yes. It doesn’t take buying and receiving gifts to enjoy the holidays with your friends and family. Of those surveyed, 25 percent said they would rather use the money on activities and experiences instead of gifts. You might want to consider some of these alternatives to buying Christmas gifts.

  • Take a family trip or plan an activity. It can be as large or as simple as you all agree on, from doing an escape room together to taking a family trip skiing. In any event, it might be cheaper even if each family covers their own expenses, than buying each person a small gift. Plus, you can plan the event at any time of the year – it doesn’t necessarily have to be on Christmas day – which could save you money as well.
  • Have dinner and watch a movie. You don’t have to skip the entire Christmas day festivities. You could still get together for a holiday meal and then plan to watch Elf, A Christmas Story, or any other of your favorites.
  • Volunteer together. An activity that not only teaches children the importance of volunteering is helping out over the holidays. Sure, it might be difficult explaining that they’re helping feed people who can’t afford a Christmas dinner instead of receiving gifts, but the feeling you get from helping make someone else’s Christmas a little brighter might make up for it.
  • Pay down debt and save together. This might not be an alternative that sounds like fun either, but in the end, it might bring everyone more joy than exchanging gifts. Of those surveyed, 37 percent said they would rather pay down debt and 47 percent said they would save money or invest. Each person/family can use the money they’d use for gifts to either pay down debt or save for a big family trip or event later.

Don’t forget that finding alternatives to buying Christmas gifts doesn’t necessarily mean you have to completely skip out on giving toys and gifts, especially to the kids. If you only replace gift-giving among the adults, it can make a significant difference to those with large families and huge networks of friends.

This Season Find What Works for You and Your Family

It isn’t too late to reach out to your friends and family members and come up with a different plan. Remember that Christmas and the holiday season are supposed to be joyous and happy. Don’t spend it worrying about the money you feel obligated to spend on gifts.

Would you give up gift exchanges if your friends and family members agreed to it? Share your thoughts in the comments below.

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The Grace Period For Student Loans Is Coming To An End

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grace period for student loans

For those who graduated in May, the grace period for student loans is ending. Many graduates will find their first payment date approaching in late December to early January. With nearly 40 percent of student loan borrowers expected to default on their loans by 2023, it is important to know when your payment is due as well as the different options you may have.

What is the Grace Period For Student Loans?

Many students have a grace period of six months after graduation to make their first payment on their student loans. Folks who graduated in the spring will begin receiving statement letters in the mail this month.

That is, unless you received a Perkins loan (a specific type of federal student loan). If you received a Perkins loan you generally have a nine month grace period.

What Now?

If you’ve received that first bill in the mail, don’t panic. Now is the time to take stock of your loans and create a plan. Know how much you owe and who your servicer is. The servicer company typically will handle sending out statements, collecting payment, and managing your account. Borrowers with multiple loans may have more than one servicer. Check the student loan website to see a full list of loans and servicers.

During this time you should also be sure your student loan servicers have all of your current contact information. This includes a valid email address, home address, and telephone number. Giving them your current information will prevent you from missing a payment.

Private Loans

It is important to note that the federal student loan website will not have any information about your private loans if you took any out for school. If you don’t have the original loan documents, you can reach out to your alma mater to get copies. However, you’ll likely want to begin payments on private loans as well because their grace period is also likely approaching.

Payment Options

If you’re already feeling overwhelmed, remember you have options. Generally, borrowers are automatically enrolled in a 10-year repayment plan. You can get as much as 30 years to repay your student loans.

Some borrowers may find that a 10-year repayment plan is too high of a monthly payment than they can afford. If that’s the case you can request a temporary postponement of payments.

You can also apply for an alternative plan with overall lower monthly payments or income-based payments. This can bring your monthly payment down drastically and, sometimes, lead you to making no monthly payment. It is important to note that this can extend the amount of time you’re paying on loans though.

Each payment plan has different criteria to be deemed eligible. However, having an open line of communication between you and the lender is never a bad idea.

Repayment options can be a bit confusing and, for the most part, many students are required to find everything out for themselves. Even though it may feel awkward to talk about your debt situation with someone over the phone, it is better to explain it than risk going into default.

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Here’s How To Get Help With Your Medical Bills

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places that help with bills

About 26 percent of Americans between the ages of 18 and 64 struggle to pay their medical bills. That is 52 million people who don’t know how they will cover the costs of simply maintaining their health. If you feel like you’re drowning in your medical debt, there are places that help with bills. Let’s take a look.

Places That Help With Bills

Searching for places that will help you pay your medical bills is easier than you’d think. In fact, there are usually quite a few local organizations that will be happy to help you back on your feet. Some will even provide personal financial counseling to ensure you don’t find yourself up to your neck in debt again. Below are a few places you may want to reach out to if you’re having trouble keeping up with medical bills.

Churches

Local churches are known to help people out with just about anything. They will often lend a helping hand with housing, transportation, food, and, on occasion, they will also help you pay medical debt. This usually only applies if you attend the church regularly. However, if you know someone within the church, it is possible to receive some help that way too.

Crisis Assistance Ministry

Not every city has a Crisis Assistance Ministry. However, if your city does, it’s one of the few places that help with bills. Crisis Assistance doesn’t just help you pay bills either. They help you get back on track by providing counseling to ensure that once you have recovered, you don’t end up in the position again. On top of helping with medical bills, they also help with food, transportation, and housing, as well as job placement.

Government Assistance

There are some government programs that can assist you in paying your medical bills. The U.S. government has programs to assist with paying utilities, prescriptions, and telephones. It is important to note, however, that you will need to meet certain criteria to receive this assistance. In most cases, you need to have income 135 percent or less than the federal poverty guidelines.

Salvation Army

Helping meet basic needs is the entire goal behind the Salvation Army. Although they may not be able to help pay your bills in every instance, they are a great organization to reach out to if you are in need.

Local Action Agencies

Most of these are small non-profit organizations that help with paying different bills, food, and basic necessities. These are often like Crisis Assistance or similar organizations. Search for non-profits in your area to see what may be available.

The 2-1-1 Program

United Way offers a 2-1-1 program that helps individuals locate the help they need in their immediate area. This service is available 24 hours a day, seven days a week. Learn more about the 2-1-1 program here.

Final Thoughts

Each of the organizations listed above are places that help with bills, food, transportation, housing, rehabilitation, and more. If you’re ever in need, don’t feel like you are alone. These organizations were put in place to help YOU (and others) when you’re in need. Don’t hesitate to get assistance.

If you’re looking for some additional suggestions and personal finance advice, head on over to the Saving Advice forums. 

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Undebt.it Review: A Free Tool to Help You Get out of Debt

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undebtit review

I don’t like admitting it – I sometimes have a problem tracking my own debt. Ultimately, people like you and me do our best to handle our debt obligations. However, sometimes, it can just be too much. So, I began looking into various debt management apps. One app that I learned about, Undebt.It, really stood out to me. It’s a free debt management app that helps you to inescapably and efficiently track all of your debt.

Undebt.It Review: How It Works

Undebt.It is a debt calculation, tracking and payment planning app system. It allows you to efficiently input every debt payment obligation that you have in your life. Undebt.It is a powerful debt payment reminder service that stresses the need to pay off all debt. It’s essentially a de facto debt payment manager.

All you have to do is register on the site and input your basic information, like your income, budget, and debt information. The app helps you calculate how much you can realistically pay each month based on your income. You can create a personalized spreadsheet where your balances, minimum payments, and interest payments are calculated.

The app sets a reminder to pay bills based on your preferences. What impresses me about Undebt.It is that your sensitive financial information is secure because you don’t need to provide it. Yes, you must input debt repayment figures to create a chart. But, you don’t have to enter your bank account, credit card, or affiliated password information ever.

The Good

It’s free. The app creates debt reminder and tracking tables that help you visualize your upcoming payments. You can create debt repayment reminders based on customizable tier systems. The Debt Snowball system lets you pay off debts with the lowest balances as a priority. The Debt Avalanche method tackles debt with the highest interest. Or, you can focus on debts based on monthly payments or your debt-to-interest ratio.

Undebt.It lets you design your debt reminder system on your terms. The app allows you to track your spending and purchasing habits. You can study your spending habits to curtail new debt accumulation. Or you can check your credit utilization details. Undebt.It has many debt tracking features that help you pay off debt and better understand how you accumulate it.

The Could-Be-Better

Once you register and access your personal dashboard, the experience can be overwhelming. There are a lot of options, features and charts for you to peruse. You definitely must be committed to learning about the app. Not impossible, but a lot to absorb. Then again, have you ever put all of your bills together to understand them? Undebt.It’s layout may be confusing at first, but it is worth mastering so you can develop a system to help you reduce your debt.

My Verdict

I highly recommend it. It’s free, full of informative options, and is customizable to your debt reminder needs. You don’t have to input your sensitive financial information, just your debt amounts. Also, you can even upgrade to an app with extra features for a dollar a month. Undebt.It makes your debt reminders inescapable and efficient. Get it today. If you don’t manage your debt, it ends up managing you.

Interested in an easy and free way to get your debt under control? Try out Undebt.It here.

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This Man Escaped His Student Loan Debt By Moving to the Jungle

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Student loan debt

Just months ago student loan debt reached a high, ugly milestone of $1.52 trillion. Unsurprisingly, many people find their student debt to be overwhelming, leading to depression and suicidal thoughts in some individuals. In fact, people who are undergoing serious financial stress are eight times more likely to have suicidal thoughts – and some engage in extreme behavior to avoid paying.

Growing Student Loan Debt

Student loan debt has seen a 145% increase in the past decade with no signs of slowing down any time soon. In many cases, individuals carry more student debt than they do in auto loans or credit card debt.  For some individuals, the weight of their personal student debt is too heavy for them to carry. Chad Haag was one of those people.

Chad Haag Delt With His Debt by Fleeing the Country.

Haag considered living in a cave in the United States to escape his student debt. According to Yahoo Finance, he already knew a friend doing it. However, for Haag, this wasn’t leaving his problems far enough behind. He wanted to get as far away from his debt as possible.

After majoring in philosophy in college, he held a student loan balance of about $20,000. While that is pennies compared to many other borrowers in the U.S., Haag pointed out that not being able to a land a college-level job made his $300 monthly loan payment devastating to his finances. He was only making $1,700 per month, living with his mother, and rarely going out with friends. “I couldn’t make the math work in America,” Haag said.

Running to the Jungle to Get Away From Debt


He relocated to a jungle in India to escape his student loan debt. In an interview, he said, “I’ve put America behind me.” Now, thousands of miles away from where he once lived in constant anxiety from his debt, Haag says his loans don’t even feel real to him anymore.

His student loans are on their way to being in default and they only thing Haag has to say is, “It’s kind of like, if a tree falls in the woods and no one hears it, does it really exist?” Of course, this kind of care-free attitude has not come without its trade-offs.

Where Haag is living is far from his Colorado home. He is living in a concrete house in a village in India. The house only costs about $50 per month and Haag says he sees elephants outside his home regularly. Haag also referenced the poor living conditions in some areas of India, stating, “Some toilets here are holes in the ground you squat over.”

Food quality can be a problem as well. He recently ate spoiled goat meat that landed him in the emergency room. However, dreams that would have escaped him in the U.S. because of his debt are now becoming realities for him in the jungle of India.

He has gotten married and he and his wife have plans to own a home soon. Currently, he has a five-year spousal visa and has plans to renew it when it comes time. Haag has absolutely no plans to return to the U.S. or repay his student loan debt.

student loan debt

Is This Responsible?

There is no doubt that many Americans find this type of behavior abhorrent. Student loan debt is only expected to continue to rise in the years to come with estimates projecting students will owe $2 trillion by 2022.

Half of the student loan borrowers haven’t paid a single dollar towards what they owe five years into repayment. Another 40% of those loans are expected in be in default by 2023.

However, moving away from the problem doesn’t make it go away. If anyone is moving away, like Haag, to escape their debt, they’ll find that if they ever return to the U.S. their debts will not be gone.  Given the structure of many loans, debts are in fact more likely to grow than be excused. Compound interest, late fees, and collection charges are all typically added to your balance if payment is not made.  In addition, late payments will impact your creditworthyness.

Not only will it not go away, but running away will make it worse. The best thing you can do is work out a debt repayment plan that works for you.

How to Keep Your Student Debt Manageable

Many people look at student loan debt as “healthy debt.” And while it is much “healthier” than, say, credit card debt, or even an auto loan sitting on your credit report, it still is a huge responsibility. If you or someone in your household is getting ready to head off to college or go back to school, consider thes money-saving tips.

  1. Go to school in-state. It has been common knowledge for years that going to school closer to home costs less money. If you aren’t getting a full-ride out of state, keep your eye on public schools closer to you. A private university’s tuition sits around $34,740 per year on average. An out-of-state public university isn’t much cheaper at $25,620. However, community colleges and in-state public universities are priced at $3,570 and $9,970, respectively. That’s much less in tuition.
  2. Stay at home to avoid room and board fees. Another great thing about going to school closer to home is that you can stay at home. This will save you thousands of dollars on room and board every year.
  3. Oh – and bring your lunches. It can also save you a ton of money on food. Instead of throwing money at a meal plan or eating on campus every day, you can bring your own lunch and save hundreds of dollars per month.
  4. Take a fast-track in your program. Depending on what your career goals are, you may consider asking someone at the university about a fast-track course for your degree. This will shorten the amount of time you’re in college, making tuition much cheaper.
  5. Avoid private loans. If you can help it, don’t take out any private loans. These are typically higher interested and begin to accrue interest while you’re still in school, unlike loans available through the U.S. government.
  6. Consider taking on work-study or paying your tuition in cash while you’re in school. It’s also possible to work while you’re in school to pay off the remaining tuition you owe. Many schools will work with you on monthly payments to remain in class and will apply funds made through work-study programs to these payments. You can also hold a job off-campus to raise additional funds. This way, you can leave school without owing any money on student loans.

Student Loan Debt Repayment

Remember, if you are feeling overwhelmed by your student debt you have options. Before taking off to India or another remote jungle, consider the options below.

  1. Get more time. Although it is not optimal, may be able to extend the repayment period on your loan to give you more time. Periods for repayment start at 10 years and go up to 30 years, depending on the amount and your ability to pay.
  2. Take a couple months off. You can get a couple months off from paying your student loan if you need it.  If you or your partner lose a job and you need a couple months to get back on your feet, you can ask for a couple of months off (most of the time) it is granted. Keep in mind, your loan will still be accruing interest during this time.
  3. Income-based payments. Talk to someone at the bank or company you received the loan through about income-based payments. If you believe your payment could (and should) be lower, talk to someone about adjusting it based on your income. They’ll do what they can to help you.
  4. Financial crisis assistance. If you or your family have faced a serious financial crisis, you can also ask for some time off. This is a bit longer of a period of time than the “couple months off” listed above and, similarly, your loans will still be accruing interest. However, it will keep your loans from going into default.
  5. Keep communication open. If you keep communication open between you and your loan officer, you will be able to work on repaying your student loans. In many cases, these individuals are understanding and will work with you based on your individual circumstances.

All in all, student loan debt is just another type of debt that can help or hurt your creditworthyness. However, it is nothing you should feel like you should run away from. Tackling it head-on and paying it down is the only thing that will truly make your debt nightmare go away.

Readers, what do you think about this man running away from his student loan debt? 

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