Create a plan to tackle debt


Let’s talk about how to celebrate National Financial Planning Month (October), which aims to “remind us to control our spending and prepare our budgets”.

From my perspective as a fund manager and promoter of financial education, leverage is sometimes necessary (helping to pay for an education that leads to a well-suited career), sometimes vital (helping you buy a home for you. your family), and sometimes just harmful (supporting overconsumption).

Financial planning for student loans is all about staying on top of things. For example, you should be aware that payments on eligible federal student loans, which have been suspended since March 2020, will resume after January 31, 2022. For more on this topic, see

How to repay student loans is another planning point. offers a loan calculator to help you review possible payment plans, as well as an income-based repayment plan. Fidelity Investments also offers a free student debt tool ( to help you consider ways to pay off your student loan.

If you are borrowing money to accumulate more things than you need, is there any planning that you can do? The first step is to do a self-assessment – to identify the problems to be solved.

First problem: reconsider your spending habits. Solution: Buy only what you can afford without going into debt.

Second problem: Not sure about the interest charges. Solution: Look at the interest rates charged by your creditors. And if they are high, plan to find lower options.

High interest debt often involves the use (or overuse) of credit cards. Some credit cards are “more expensive” than others in terms of interest rates. A recent survey from ( found that the highest annual percentage rate (APR) for retail store credit cards was 29.9%, with the average card APR being retail credit at 24.35% and the average APR of non-commercial cards at APR of 19.92%.

As FINRA advises, “few money management strategies are as profitable or less risky as paying off any high interest debt you might have” ( (FINRA, the Financial Sector Regulatory Authority, regulates the brokerage industry.)

When planning for the future, don’t overlook other uses for the money you use to cover debt payments. Think about retirement. For example, if you pay off a credit card with a balance of $ 10,000 and 18% interest, Steven D. Brett, partner at Marcum Wealth LLC, points out, “By getting rid of those interest payments, you get. effectively an 18% return on your money. This means that your money would typically need to generate an after-tax return of over 18% to make investing a smarter choice than paying down debt. For more on this topic, see “Paying Off Debt or Saving for Retirement? (

As for mortgages, this interest rate market offers a number of low interest rate options. The goal is to do your research and find the best financing or refinancing options. Here is a tool for further research from the Consumer Financial Protection Bureau:

In any discussion of debt, good or bad, the starting point should be a thorough understanding of your personal financial situation. FINRA provides a form to calculate your monthly income and expenses at

Take October to create a plan by the end of the month. When you celebrate Halloween, remember that debt doesn’t have to be scary.

If you are interested in promoting financial literacy education, you can help publicize a financial literacy competition that I am sponsoring. Contact your social networks with # 401kChampion.

There is still time for 401 (k) entrants to compete for the 401 (k) Champion Prize, which encourages 401 (k) entrants to share their knowledge about 401 (k) s with each other. To compete for the prize, go to

Julie Jason, JD, LLM, Personal Fund Manager (Jackson, Grant of Stamford) and Author, welcomes your questions / comments ([email protected]). Its awards include the 2020 Clarion Award, symbolizing excellence in clear and concise communications. Her latest book, an organized collection of Julie’s Chronicles, is “Retire Securely: Insights on Money Management From an Award-Winning Financial Chronicist”. To hear Julie speak, visit

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