How to Pay Off Debt – the Right Way

Are you up to your eyeballs in credit card debt? You’re not alone. According to Business Insider, the average American household with credit card debt owes upwards of $16,000.

Like anything else in life, the key to paying off your debt is having a plan. Most people blindly pay what they can on their bills, with little-to-no thought on how they are allocating their payments. This ultimately costs them time, frustration, and hundreds of dollars in interest.

Luckily for you, the professional financial planners at American Investment Planners, LLC are here to help. This proven four-step method will allow you to pay off your debts as quickly and efficiently as possible.

Step 1: Stop adding new debt.

If you are serious about paying off your debt, the first thing you need to do is stop adding to it. Leave your credit cards at home the next time you go shopping, or cancel, freeze, or cut them up if you need to.

Step 2: List each of your debts in order of interest rate.

Make a list of all of your debts, including car payments, student loans, credit cards, store cards, and anything else which isn’t a mortgage. Now rank all of these debts in order of interest rate, with the highest rate at the top of your list.

Step 3: Pay all of the monthly minimum payments.

When compiling the aforementioned list, be sure to include a column for minimum monthly payment. This is the amount you will pay every month towards all of your debts, except for the one at the top of your list…

Step 4: Put extra money towards the debt with the highest interest.

This is where that list of interest rates comes in handy. Once you have made the minimum payments on all of your debts, put your remaining money towards the debt with the highest interest rate. Most people pay off their debts in order of total amount owed, starting with the smallest sum. While this allows you to close small accounts quickly, paying off in order of interest rate guarantees you spend the least amount of money possible.

Bonus Tip: Lower your interest rates and consolidate your debt with balance transfers.

A balance transfer is the process of moving your credit card to another bank in exchange for a lower interest rate. When utilized correctly, balance transfers could save you hundreds (or even thousands) of dollars in interest fees. Shop around to get the lowest interest rate for the longest duration possible, and be sure to read all terms and conditions to avoid hefty fees.

American Investment Planners, LLC has been helping families across the country pay off their debts for more than 30 years. Our professional financial consultants will sit down, examine your current debts, and work together to construct a repayment plan that meets your needs and budget.

To schedule an appointment with one of our advisors, please call (516) 932-5130 or email info@americaninvestmentplanners.com.

6 Characteristics of People Who Are Debt-Free

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

Ever wonder what people who are debt-free have in common? Could it be that they are just naturally better at handling money? Or, are there certain traits or characteristics that they possess which help them manage their finances to a greater degree? We did some research to find answers to this, and here's what we were able to come up with thanks to time.com's Money:

1. They focus on the details. Those who are in good shape with their finances tend to be extremely detail-oriented, and are committed to keeping track of every financial move they make - if asked, they can most likely tell you where every penny came from and where every penny went.
2. They're practical. Everyone would love to have a fancy car and designer clothes, but making big purchases that are sometimes unnecessary is an easy way to fall into debt. That said, debt-free people are usually very practical with their purchases, and realize that no-name brands or less expensive items can work just as well as the more costly alternatives.
3. They're willing to wait. People who are debt-free understand that instant gratification isn't always possible and recognize that sometimes, they will have to save their money and wait. For example, if they are looking to take a family vacation this year but the funds just won't be around until next year, they'll hold off until their finances permit.
4. They understand credit cards. Credit cards are actually embraced by many people who are debt-free, but the difference with them is that they understand exactly how credit cards work and realize that if they do not pay their balance in full, they'll wind up spending more. That said, they aren't afraid to use credit cards, but they use them wisely.
5. They're savers. Even if there isn't much to save, people who are debt-free save as much money as they possibly can so that they're prepared for anything that comes their way. Unexpected emergencies are a source of debt for many people, but those who are debt-free work hard to prepare themselves for anything and everything.
6. They're responsible. Most importably, people who are debt-free are responsible and understand that it's up to them to keep themselves in a stable financial position. As a result, they also aren't afraid to accept responsibility for any financial mishaps and realize that they are the ones who control their financial success.

Although people who are debt-free tend to share many of the same qualities, we at American Investment Planners LLC know that being financially responsible may also require the help of a professional. If you have questions or concerns about your finances and need some help getting on the right track, our advisors are here for you! To make an appointment with us, please call (516) 932-5130 or email info@americaninvestmentplanners.com today.

5 Ways To Avoid Debt While You're Young

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

Until you become financially independent, it can be easy to spend or ask for money without thinking - if you don't have any bills to pay, your money is yours to do what you please, right? Maybe so, but unless you start adopting good financial habits early, getting used to this mindset can easily send you in the wrong direction, the direction that leads you to debt.

If you recently started college, graduated college, started a first job or moved into your own home or apartment, now's the time to really buckle down and make sure your finances won't wind up in the negative zone - here are a five ways to start doing so:

1. Avoid credit cards until you're really ready. Credit cards are important in the sense that they can help you build your credit and provide a safety net for emergencies, but they also make it tempting for you to go out and spend money that you don't have. Unless you feel like you can avoid this type of temptation, hold off on getting your first credit card until you feel like you are truly financially responsible.
2. Keep track of your spending. Knowing how much money is coming in and out is one of the easiest ways to keep yourself from going into debt - this is where creating a budget comes in. If you don't know how much money you owe in expenses each month (we're talking student loans, car payments, rent, etc), it can be very easy to spend too much recreationally and leave yourself with less than is needed to cover your bills. Bonus tip: when creating your budget, it doesn't hurt to overestimate your expenses and underestimate your income; in fact, it can really help.
3. Make yourself a schedule. If all of your monthly expenses aren't due on the same date, create a schedule that outlines exactly when all payments must be made. By being organized, you can prevent yourself from missing payments - remember that missing just one payment is all you need for things to spiral out of control.
4. Have an emergency savings fund. As soon as you can start putting some money aside for emergencies, do it. Even if it's as little as $5.00 a week or $25.00 per paycheck, having cash set aside for real emergencies can help you stay on track when you need to the most.
5. Talk to a professional. Financial planners are not just for those who have a ton of money to protect. If you want to really do everything that you can to avoid debt while you're young, you'll want to meet with a financial planner so that you can develop a strategy for how you'll pay down outstanding debts and save for the future responsibly.

If you don't already have a financial planner, contact the team here at American Investment Planners LLC! We pride ourselves on our ability to create strategies for any and all short and long term financial goals, and would love to be able to help you next.

To set up an appointment or to learn more, please call (516) 932-5130 or email info@americaninvestmentplanners.com today.

Tips For Paying Off Your Debt

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

Debt - a word many of us fear all too often. When it comes to feeling financially stable, realizing that you owe more than you have can be pretty intimidating and leave you feeling at a loss for what to do next. However, if you've ever been in this situation, know that you're not alone and rest assured that there are plenty of ways to get out of it - you just need to know what to do!

If you've come here today looking for ways to get back into shape financially, check out our tips for paying off your debt below:

1. Set a budget: First and foremost, you'll need to set a budget for yourself that leaves you with enough money to start paying back what you owe. Keep in mind, though, that you will still have other expenses to care for, so you may need to make some adjustments to your current spending habits. For example, if you tend to spend a lot on things you don't need, see where you can cut back to dedicate some of that money to the bills that are piling up.
2. Look at interest rates: If you have several loans that need to be paid back or are a holder of multiple credit cards, see which one is charging the most interest on your outstanding balances. Since interest is directly related to how much you are required to pay back over time, your best bet is to start focusing on those bills that accrue the most so that your debt doesn't continue to increase.
3. Put the cards away: While you're working on paying off your debt, it may benefit you to take credit cards out of your wallet. This way, you won't be tempted to swipe and therefore will help you avoid having a bigger balance to deal with. Of course you may want to have one for emergencies, but if you do not give yourself the opportunity to use them, then you can work on keeping your debt from rising.

For more tips on how to pay off your debt, check out this article from U.S News & World Report MONEY.

So, what strategies do you use to pay off debt or to keep your debt at a minimum? If you're struggling with financial planning and are looking for a solution to help you get back on the right path, contact American Investment Planners LLC today! We are a team of financial planning gurus and can help you develop a strategy that keeps all of your finances in check. To speak with a member of our team, please call (516) 932-5130 today.

Common Causes Of Falling Into Debt

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

If you ask anyone what their biggest financial fear is, we are certain that the majority of the answers you receive would somehow revolve around debt. While the type of debt and degree of debt may vary greatly between each individual, the theme of debt alone is likely to be present in any conversation you have with others about financial concerns. 

Now let's get to the real question - what causes someone to fall into debt in the first place? To provide our readers with an answer, we put together the following to outline three of the most common reasons people find themselves in a financial frenzy:

1. Excess Spending: Probably the most common cause of falling into debt is failing to spend wisely and using credit cards too haphazardly. Although they are easy to use and extremely convenient, credit cards can be your biggest enemy when it comes to your financial status. By swiping your life away, it's likely that you'll find yourself with more bills than you can handle relatively quickly.
2. Unexpected Spending: When unfortunate situations like natural disasters and family emergencies happen, many find themselves needing to spend money on things that they weren't expecting to. What's even more unfortunate is that most of the time, these expenses are quite costly, making it difficult to maintain a steady financial status. While most of us generally try to avoid thinking about the potential for these types of events to unfold, it's important to have some type of savings in place to prepare for the unexpected.
3. Medical Spending: Believe it or not, medical expenses are one of the largest contributors to debt and an individual's decision to file for bankruptcy. Though these expenses may not pop up often, when they do, they can be extremely difficult to manage - even when insurance is covering much of the cost.

Here at American Investment Planners LLC, we understand what a difficult experience falling into debt can be. Therefore, if avoiding debt is one of your biggest financial goals, we encourage you to meet with our team to learn more about how we can create a financial plan that incorporates various savings programs. By preparing and planning ahead of time, you can work to reduce your chances of falling victim to these pitfalls.

For more information about the services we offer, please give us a call at (516) 932-5130 or email info@americaninvestmentplanners.com.