Escape the debt trap:Real Life Story

At Super-Advice we are about all things financial, but more importantly, helping people understand so they can get ahead financially.

Today we are going to share with you a real life situation that occurred at Super-Advice where we helped a couple to get out of their debt trap.

The debt problem

Meet Nathan and Kirsten, they had a problem.

Nathan “We never have any money.”

Nathan “We would like to use our savings to wipe out our overdraft”.

Kirsten“concerned about using the savings to wipe out the overdraft because what happens if an unexpected expense comes along?”

We did a budget

The first thing we needed to determine was how well they understand the movement of money in their household.

To do that, we made a budget and we were able to determine they made this much money every month. We were able to determine they cost this much money every month, and they had a surplus of around $800 every month. So you can see there, if they stuck quite strictly to that, $800 should be stacking up behind them every single month.

We looked at what they owned and we looked at what they owed.

In the “owed” department was this really gnarly, ugly looking overdraft that their home loan provider had given them, and it was (brace yourself) $37,000 deep!

The plan

Now. The plan ended up like this. We are gonna follow this budget and we’re gonna follow it religiously and seriously for a year.

We are gonna look through your assets, and low and behold, in those assets was a vintage car and the value of that vintage car was the same as the overdraft at$37,000.

It was our recommendation to liquidate or to sell that vintage car and wipe out that overdraft. As they’d been living in an overdraft,you can imagine massive fees, like 8.5% per annum, charged on $37,000.

It’s gonna be very hard to get ahead.

So the overdraftt has been wiped out.

There were also goals of Kirsten’s to build a new deck with a pool on it. And, and a couple of other things. So our suggestion was, let’sold back on any new purchases.

Let’s wipe out all of that debt. You can get yourself another vintage car in the future. And luckily, there was no sentimental value to it.

So what happened is these guys now have a plan to get out of that hole of debt.

Stay diciplined

We had a good talk about not using debt anymore, overdrafts loans, credit cards, just don’t use them, just save your own money by using a budget and use your own money.

Delayed gratification!

Work for future you

From problem to solution we were able to give a real sense of relief to this couple and you could see it on their faces and it makes us feel good knowing we have really helped.

Their anxiety was lifting away because they now had a plan all laid out that they simply had to follow and work towards for their future selves..

That’s a wrap

So what do you think? Has this helped?

If you need any financial help or advice please get in touch with us at Super-Advice.

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