How to Organize Your Debt Payoff | Sarah Niensteadt | Skillshare

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How to Organize Your Debt Payoff

teacher avatar Sarah Niensteadt, Debt Coach

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Taught by industry leaders & working professionals
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Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

7 Lessons (11m)
    • 1. Intro To Debt Repayment Course

      1:19
    • 2. Overview Of Debt Repayment Course

      0:24
    • 3. What is a Debt Organizer

      1:42
    • 4. Why you need to organize your debt

      0:40
    • 5. How to fill out the Debt Organizer

      3:38
    • 6. Looking at an example

      2:16
    • 7. Homework

      1:09
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About This Class

This personal finance class on debt will teach you how to beat debt by showing you the importance of tracking all your loans in one place. If you have debt, this class is for you. After taking this class, you will be able to set up the debt organizer which puts all your debt in one place, giving you a quick snapshot of your progress towards your goals. The organizer will also give you a true picture of your story and hold you accountable along your journey. Coming from someone who has paid off more than $84,000 in student loans, this step is crucial to the debt repayment success. The organizer is also a great starting point for your money days.  

Prepare to learn about managing & eliminating debt by learning:

  • What is a Debt Organizer
  • Why it's Important to Organize Your Debts 
  • How to Fill Out the Debt Organizer
  • How to Understand Your Numbers  

As a class project you will be filling out the debt organizer that you will use to better understand your entire debt picture and help you set accurate, achievable goals.  This was a crucial piece that helped us pay off our more than $84,000 in student loans. 

Meet Your Teacher

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Sarah Niensteadt

Debt Coach

Teacher

Hello, I'm Sarah.

Being told you will have student loan payments forever was just something my Husband and I were not willing to accept. Student debt became a large stress point in our everyday lives. We started this journey 5 years ago after sitting down to develop a plan to change our life forever in just 52 weeks. Since the start of our journey, we have paid off over $84,000 in debt. Today, we can successfully say we no longer live paycheck to paycheck.

Take your organized debt and turn it into a plan with our 7 Day financial boot camp!

My mission is to provide structured courses that can help anyone improve their financial situation. 

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Transcripts

1. Intro To Debt Repayment Course: Hi, I'm Sara. And if you struggle like with debt like me, then my courses are for you. When my husband and I graduated from college, we had $84,000 in student loan debt and we were just completely overwhelmed. We were being told that we would have to have our student loan payments for the next 10 years of our lives, and it was just something that we couldn't accept. Living paycheck to paycheck is something that we didn't enjoy, nor did we want to do for the rest of our lives. And student loans and other consumer debt became a very large stress point in our lives. And so we decided to develop a plan that then successfully paid off all of our student loan debt. Our mission with these courses is to provide a structured program that can help anyone improve their financial situation. We are dedicated to educating people about basic financial topics that we wish someone would have taught. Tow us in college or before we want to elevate anyone's financial future by using our resource is to improve their knowledge and skills. We want to teach these courses because we want everyone to have the same financial freedom that we do 2. Overview Of Debt Repayment Course: Welcome to Day two of your seven day financial boot camp. Hopefully you had success picking your money day. If not, please keep working on it as it is super important that you have that time allocated to talking about money. Well, what are we going to be working on today? Today is going to be about your debt organizer. 3. What is a Debt Organizer: So what is the first question? Meaning, What exactly is a debt organizer? Well, this is the spreadsheet that my husband and I developed as we were in the process of writing down all of our student loans along with prioritising, which loans we were paying off as we started our debt free journey. So one of the positives about the debt organizer is that all of your debts are going to be listed in this spreadsheet in one spot, so you can pull this up and you can see exactly how much that you have and exactly what type of information Maybe you need to know about certain loans. Do you need to know which loan has a higher interest rate? Maybe which loan has one of the highest payments, or which loan is gonna be one of the hardest to tackle? One thing that this organizer will also do for you is show you all of the current balances as long as you keep it updated. When we graduated, we had a lot of our loans were subsidized, but we did have a few loans that were ups unsubsidized loans, which means the interest was accruing the day we took out the debt. And so this organizer added, in all of that debt for us, So we knew exactly how much was principal and how much was interest. Another reason that it's important to use this organizer is because it gives you motivation to pick alone and pay it off without seeing everything in one big group. It's hard to know which loan is going to be your priority and how exactly you're gonna work to pay it off. We modified this spreadsheet so that it could fit our needs, and so it showed super important information that we could use to track as we were going down this path. 4. Why you need to organize your debt : So you might be asking yourself, Why do we need to organize our debts? You know, maybe you already have a good idea of how Maney debts that you have, and maybe you have your own method of keeping track of them. But one thing that's important is that all of your debts need to be put in one place so that you know exactly where you are. If you need to look up a quick snapshot or so you know exactly how much progress you've made. The debt also shows the true picture of your debt and where you are and how much more you have left to pay. The organizer also holds you accountable. Okay, let's jump into the debt organizer and get started. 5. How to fill out the Debt Organizer : The first thing that might jump out to you is the this very large number in the right hand corner of your organizer. This number is going to tell you how much money you are going to pay in one year. Now, this number might not seem very important. But what I realized was that when I got through paying off these debts, all of my student loans were gone. I knew exactly how much money I would have to use to go do something every single year. For example, my debt organizer. It was close to $12,000 I knew once I paid off my loans, I would have close to $1000 per month to either go buy a bigger house, a four day care bills, take a vacation by a different vehicle. And so this number here in the right hand column gave me a lot of motivation to keep going . The left hand column is gonna have your loan number, and this will help you keep a lot of your loans organized. If you have more than one lone through a servicer, for example, we had four different loans through Nell met and It was hard for us to know which loans were the priority, but we would separate them out because of their loan number. The next thing you want to put in is your lender, and probably the most important piece will be the loan amount. Now you can put in the original principal amount, and this organizer will actually calculate the total interest that you will pay over the life of the loan. The last column is going to be your annual interest rate. If you don't know the interest rate for your loans, please look it up because it will be important on Day four when going over debt repayment. There is a method about paying off loans that focuses on interest rate, and we will need to know that number. The one nice thing about this spreadsheet is that it will auto populate if you put a specific date in there. So let's say that my first loan I'm going to begin paying off July 1st of this year, and it's a 10 year loan. You can see that if I change any of these numbers, if it's eight years or if it's 10 years, you can see when I put that in there that it will auto populate the total interest, it might be a little mind blowing to you to know how much total interest you're gonna have . Some people tend not to think about it, but I think it's important for you to at least acknowledge that when you are going to maybe pay off this loan, for example, it's almost like paying off a 19 or $20,000 loan. Because by the time you pay off the $15,000 in principle, if you take all 10 years to pay off this debt, it will be more like paying off $4700 interest. So you're adding those two numbers together, and it's almost like paying off a $19,000 loan. If I were you, I would probably prefer paying off $15,000 versus $19,000. Another thing that this will calculate for you is your monthly payment. If this happens to calculate an incorrect monthly payment, feel free to manually put that number right here and it will still total at the bottom. The calculator will also take and multiply your monthly payments in this column to the underneath the annual payment column. Let me go ahead and open up my debt organizer and show you exactly how I put it together. 6. Looking at an example : So here is my husband and I Z original student loan balances. You can see over here in the left column here all of my loans. You can see how I organized by lender here and how I also organized by loan amount. Now, I will encourage you if you want to start with the highest principal amount first, just so you can see and clearly know which is your highest amount or you can also organized by annual interest rate. This will be important as we look at day four, but for now it will be just a Zim Porton to get all of your debts in the organizer. You can also see over here that a lot of our loans were 10 year loans. But we did have a couple of them that were between five and eight years as well. The total interest was also something that was shocking to me because by the time you added in our total loans, along with the interest that we would have paid, we would have paid well over $100,000 if we would have just taken 10 years to pay back our student loans in the second to last COMMENT column You can see that it totaled up our monthly payments, and then over here is where it it shows you your annual payment right here. Here's the number that I was referring to in the beginning of the video that explained how much money we would have left once we actually paid off our student loans. This is a number that I look back now and wished I would have understood the capacity that I would have had the ability to invest, to buy something else to travel to, you know, uses a rental property. And unfortunately, this number did not sink in how much money and how much freedom we would have. One of the most important parts about your debt organizer is making sure that it is filled out as thoroughly as possible and as complete as possible. Feel free to add more columns or rows if you're missing something, or if you need more room and have additional deaths that maybe there isn't room for 7. Homework: So that's everything for day two. What is your homework going to include? Well, first thing you need to do is pull up your debt organizer and fill out all of your debts. The next thing you need to do is also just start discussing which deaths you'd like to pay off. First, we will go through a few scenarios of how to pay off your debts, but in general, have some short term goals about which loans you'd like to tackle First. I know for my husband and I, we wanted to start with our lowest dollar amount first, because it gave us a little bit of motivation. But we'll get into that a little bit more on Day four. The third and last thing you need to do is decide who is going to keep the debt organizer updated and also decide when you plan on updating it. Are you going to do it every single day on your money day are going to do it weekly? As you make more progress towards paying off your loans, you'll find that it's a little bit easier and probably more fun to keep your debt organizer updated. Tomorrow we're going to go over your cash flow