Join our participants as they reduce debt and increase savings with the help of Summit financial coaches.
Idah's Journey:
importance of financial education
My biggest takeaway from this week is the importance of financial education. Growing up, financial conversations were not a part of everyday family talks. They were more of a closed-door adult conversation, and from the few conversations I was able to listen to, I learned that my family did not have enough money and did not have solutions. From a very young age, I knew that I couldn't get most of the things I needed and that was it. Anytime I needed something, I always thought about it thoroughly before bringing it up. My first option was always to try enduring through it, unless there was absolutely no other way out. Now that I think about it, when I started making my own income, I didn't necessarily leave that “endure and work with what’s there” attitude. All these years I have been in the USA, I knew that there were financial specialists and coaches available, but I have always held the attitude that my financial situation would work itself out. Now, I have options and there are ways to help reduce my financial burdens. But, the only way to understand these options is through financial education.
After my meeting with my financial coach Brooke this past week, I was amazed by the options available for me to reduce interest payments and in turn, monthly loan payments. For example, I didn't know that I could refinance my vehicle through an auto equity loan with a very low-interest rate. Taking advantage of this would allow me to consolidate a couple of my high-interest debts and save nearly $80 in monthly payments, not to mention the savings in the cumulative interest!
Another technique that I am adopting is the “debt snowball.” This is when you pay off the smallest debt first and then once it’s paid off, use the available amount towards paying off the next smallest debt, up until you pay off your largest debt. Although I knew about this concept previously, I had always thought it made more sense to pay off high-interest debts first, but doing this makes it take much longer to pay off anything because the high-interest debts are usually the high-amount debts as well. With guidance from Brooke and after analyzing the numbers, it makes so much sense to do the snowball technique. In the next couple months, I get to attack my smallest debt! This is going to work out perfectly because I took advantage of Summit's current auto promotion and I don't have to make my first loan payment for 90 days. So in the meantime, I will use that loan payment amount to pay off my smallest debts.
I believe it’s so important to know your options. Whether its debt consolidation, loan refinancing or switching savings techniques, it’s worth it and it adds up even if it helps you save a small amount. Out of curiosity, if you could share one piece of financial advice, what would it be? Feel free to comment on my social media. I would love to hear your thoughts and learn something new!