Paying off $30k in debt made EASY with the right tools. Velocity Banking = Financial Peace
Summary
TLDRIn this video, Christy Van from Fantastic Finances helps an elderly man manage his overwhelming debt. With a personal loan of $26,000 at 11.99% interest and a dental bill adding to his stress, Christy devises a plan using his line of credit. By strategically paying off the loan and managing cash flow, the man reduces his debt from a 10-year burden to just 14 months, illustrating the power of financial planning and the effective use of banking tools.
Takeaways
- 👴 The elderly man in the video has a personal loan of $26,000 with a monthly payment of $378 for 10 years at an interest rate of 11.99%.
- 💸 He also has a $4,050 dental bill that contributed to his total debt of over $30,000 with a combined monthly payment of $1,078.
- 🏦 Despite feeling overwhelmed, he has a line of credit with a zero balance and a $15,000 limit, which can be used to manage his debt.
- 💡 The financial advisor suggests using the line of credit to pay off the personal loan to avoid interest payments after the 0% introductory period ends.
- 💼 The man's monthly income is $4,746, and his expenses are $3,465, giving him a cash flow of $1,281.
- 🚀 By paying off the personal loan with the line of credit, his cash flow increases to $1,981, which can be used to further reduce his debt.
- 📉 The financial plan involves strategically using the line of credit and monthly income to pay down the balance and reduce interest charges.
- 🏠 After paying off the personal loan, his monthly expenses decrease by $700, reducing his new expenses to $2,765.
- 📈 The plan is to continue using the line of credit and monthly income to pay down the balance, with interest charges calculated based on the average daily balance.
- 🎉 The man is projected to pay off all his debt in just 14 months, instead of the original 10-year timeline, significantly improving his financial situation.
Q & A
What is the main concern of the elderly man in the video?
-The elderly man is concerned about paying off a personal loan of $26,000 for 10 more years at the age of 70s, with a monthly payment of $378 and an interest rate of 11.99%.
What additional debt does the man have due to dental work?
-The man has an additional debt of $4,050 for his anesthesiologist bill due to dental work, which contributed to his overall debt of over $30,000.
What is the man's monthly income and expenses?
-The man's monthly income is $4,746, and his expenses, including rent and food, amount to $3,465, resulting in a cash flow of $1,281.
How does the line of credit help the man in the video?
-The man has a line of credit with a zero balance and a limit of $15,000, which can be used to consolidate and pay off his debts more efficiently.
What is the strategy suggested to pay off the personal loan quickly?
-The suggested strategy is to use the line of credit to pay off the $26,000 personal loan, which will eliminate the high interest payments and increase the man's cash flow.
How does paying off the personal loan affect the man's monthly expenses?
-Paying off the personal loan reduces the man's monthly expenses by $700, as he no longer has to pay the $378 monthly payment on the loan.
What is the man's new cash flow after paying off the personal loan?
-After paying off the personal loan, the man's new cash flow increases to $1,981 per month.
How does the man's balance on the line of credit change over time as he pays off his debts?
-The man's balance on the line of credit fluctuates as he uses his income to pay down the balance and as interest and expenses are added. It starts at $4,050 and gradually decreases over 14 months.
What is the approximate total interest paid by the man over the 14 months to pay off his debts?
-The man pays approximately $41 in interest over the 14 months to completely pay off his debts.
How does the man's financial situation change by the end of the 14 months?
-By the end of the 14 months, the man has paid off all his debts and is left with a zero balance on his line of credit, only needing to cover his monthly living expenses.
What is the main message Christy van wants to convey to viewers about managing finances?
-Christy van emphasizes the importance of understanding and utilizing financial tools, such as lines of credit, to manage and pay off debts efficiently, leading to financial peace and a better life.
Outlines
📈 Financial Strategy for Debt Relief
Christy Van from Fantastic Finances introduces a case study of an elderly man with significant debt. The man has a personal loan of $26,000 at 11.99% interest with a monthly payment of $378 for 10 years, and additional debt of over $30,000 with a combined monthly payment of $1,078. Despite his concerns, Christy points out that he has a line of credit with a zero balance and $15,000 available, which can be used to alleviate his financial stress. The man's income is $4,746 per month with expenses of $3,465, resulting in a cash flow of $1,281. Christy suggests using the line of credit to pay off the personal loan before the 0% interest period ends in December 2023, which would not only eliminate the loan but also increase his cash flow to $1,981 per month.
📊 Step-by-Step Debt Elimination Plan
The summary details a step-by-step plan to eliminate the man's debt using his line of credit. Christy outlines how to use the available credit to pay off the $4,050 debt, which would then be moved to the line of credit, and how the man's monthly income and reduced expenses would be used to further pay down the balance. Each month, the man's income is applied to the line of credit, reducing the balance and the interest charges. By the end of the plan, the man's expenses decrease due to the elimination of the loan, and his balance on the line of credit is significantly reduced, showing a clear path to becoming debt-free.
🚀 Accelerating Debt Payoff with Monthly Payments
This section continues the financial plan, showing how the man's monthly income and reduced expenses are used to consistently pay down the balance on his line of credit. The process includes calculating the interest for each month based on the high balance and then subtracting the man's expenses to determine the new balance. The strategy is repeated monthly, with the man's income being used to reduce the balance and the interest charges being calculated based on the reduced balance. By month 13, the man has paid off his personal loan in full, and by month 14, he has a zero balance on his line of credit, significantly ahead of the original 10-year plan.
🌟 Achieving Financial Peace and Empowerment
Christy concludes the video script by emphasizing the importance of taking control of one's finances and using available tools effectively. She celebrates the man's achievement of paying off his debt in just 14 months, instead of the projected 10 years, and encourages viewers to learn from the example. Christy offers her services for those who need further assistance but also assures that the information provided in her videos is sufficient for viewers to manage their finances independently. She expresses her desire for everyone to achieve financial peace and to embrace a better life, starting with the mindset change facilitated by understanding and applying financial strategies.
Mindmap
Keywords
💡Velocity Banking
💡Line of Credit
💡Cash Flow
💡Personal Loan
💡Interest Rate
💡Monthly Expenses
💡Debt Management
💡Income
💡Dental Expenses
💡Debt Consolidation
Highlights
Christy van from Fantastic Finances helps an elderly man manage his debt.
The man has a personal loan of $26,000 with a monthly payment of $378 for 10 years at 11.99% interest.
He also has a dental bill of $4,050, adding to his financial stress.
The man's total debt is over $30,000 with a combined monthly payment of $1,078.
He has a 0% interest line of credit for six months, expiring in December 2023.
Christy suggests using his line of credit to pay off the personal loan to avoid future interest.
By paying off the loan, his cash flow increases by $700, totaling $1,981 per month.
Christy outlines a plan to use the line of credit to consolidate and pay off all debts within 14 months.
The man's monthly expenses decrease as loans are paid off, reducing financial pressure.
Each month, the man's income is used to pay down the line of credit balance, reducing interest charges.
By month 11, the man's personal loan is fully paid off, eliminating the $378 monthly payment.
The man's expenses are recalculated monthly as his debt decreases, further improving his cash flow.
By month 14, the man's line of credit is paid off, and he only needs to cover living expenses and minimal interest.
Christy emphasizes the importance of using available financial tools effectively.
The man's 10-year loan is paid off in just 14 months, demonstrating the power of strategic financial planning.
Christy encourages viewers to take control of their finances and apply the strategies discussed in the video.
The video concludes with Christy expressing joy for the man's financial turnaround and offering support for viewers.
Transcripts
hello and welcome back to my channnel I
am Christy van with fantastic finances
and on this channel I teach velocity
banking so today I was working with an
elderly man who is trying to figure out
his debt and he's feeling overwhelmed
but when I saw what he already has in
his possession such as the line of
credit I realized that he doesn't have
any problems he just feels like he does
so let's talk about exactly what kind of
issues he feels like that he's having
currently so he has a personal loan at
$26,000 with a
$378 a month payment it's for 10 years
at
11.99% you have to understand this man
is in his 70s and he's concerned about
paying on a personal loan for 10 more
years he shared with me that he had to
have a lot of dental work done it cost
him so much money this
$4,050 is just his anesthesiologist bill
that's crazy crazy right so he is now in
over his head at
$30,000 plus of debt that has a total
monthly payment combined of
$1,078 a month so he's feeling like he's
in a little crunch but this one is at a
0% for six months but that six month
ends December of
2023 guess what this is the middle of
October 2023 so he doesn't have another
enough time to pay this off before that
0% turns into interest and starts eating
him up but we have a plan because he
already has this line of credit in his
possession with a zero balance so he has
$15,000 to work with so he is in great
shape and doesn't even realize it his
income is at
4746 he has 3465 in expenses every month
and that includes his rent food and
these expenses and he has a cash flow
currently of
$1,281 so knowing that he has the
$155,000 available the very first thing
that I suggest he would do that I would
personally do myself is I would pay off
this personal loan he needs to get rid
of that we don't need to be throwing
interest on him at the end of December
we need to be getting that out of his
way so if he takes the $115,000 limit he
has and pays off the $4,000 50 that
means that he'll have a balance on his
line of credit of
$4,050 okay but what did that do besides
just pay off that loan it gave him $700
in cash flow on top of the 1281 that he
currently has now he has
$1,981 in cash flow that's going to do
nothing but knock this off right but
what else can we do
we can take
$110,000 of this line of credit and also
apply it to here so now he has a
$116,000 balance here he still has the
monthly payment because he's not paid it
off yet but we're going to add the
$10,000 that we used to pay down this
loan his balance now on the line of
credit is
$4,050 next he will bring his income of
$4,743 and place it all into this line
of credit now this line of credit is
currently at
11% okay so we're going to figure that
interest next but what happens when this
income goes in well it's going to knock
off any payment that he would have for
this line of credit so figuring the
interest at 11% on the high balance
would be approximately
$129 but is he going to pay that no he's
not going to pay $129 in interest
because he is knocking the balance right
down with his income meaning his balance
now is
9304 meaning that that interest charge
is going to be less because the bank's
figure on the average daily balance but
I'm going to go ahead and figure on the
high balance and I'm going to put
$129 for for his interest on this
account even though it's not going to be
that high so his balance now is at
9433 now we can't forget his expenses
he's going to have monthly expenses like
I said earlier he pays his rent his
electric bills his food his gas so he's
going to have the expenses that he
currently has at
3465 but it's no longer 3465 is it no
because when he paid off this loan here
his expens came down so you would do
3465 subtract the 700 that he was
currently paying his new expenses are
2765 I hope that makes sense so we will
add the
2765 in his new
expenses bringing his balance to
$1,198 month two we're going to do it
again we're going to bring his income
into the account making his balance
7462 so we're going to have to add more
interest for month two so I'm going to
take that off of the high balance of
$1,198 so he'll pay approximately
$112 in interest bringing his balance up
to
$757 remember we have to add those
expenses in again at
2765
making his balance now
$1,339 so the
$1,339 is now the beginning balance at
month three so his income is going to go
into this line of credit again bringing
his balance to
5593 so we have to add some more
interest again so I'm going to take it
off of the high balance of
10,339 and that's going to give him
approximately
$96 in interest we're going to add back
in his expenses at
2765 bring in his balance back up to
$845 this month we're going to bring in
$5,000 more from that other personal
loan so if you remember here the balance
was 16,000 and now it's going to be
11,000 because we're adding 5 more, into
this personal loan bringing his balance
back up to
$3,454 we're going to now bring in month
four of his income so the
4746 goes in
again meaning his balance is now
8708 we're going to add some more
interest I'm going to figure the 13454
at the 11% interest rate so that we get
a charge of approximately only
$125 we're going to go ahead and add his
expenses back in again which is the
2765 bringing him back up to
1,598 Bringing In His income again for
month five
4746 bringing his balance down to 68
52 so in month five he can add $5,000
more dollars to pay on to that personal
loan that will bring the personal loan
down to
$6,000 his balance will now be
11,852 so I'm going to take the interest
off of the
11,852 meaning that's approximately
$19 in
interest then we're going to add in his
expenses again
2765 for the month bringing him to a
balance of 14,000
$726 in month six his income is going to
go in again bringing him down to
$980 so I'm going to take the interest
off of the high balance at
14726 times the 11% which is going to
give him approximately
$135 in
interest plus We'll add in his expenses
again
2765 bring in his new balance to
12,880 month 7
4746 of income goes in again bringing
his balance to
8134 we're going to add in the interest
and I'm going to take it off of the high
balance for a total of approximately
$118 in interest plus his
2765 and expenses that he does have to
pay his balance will be $1
,7 then guess what in month eight we're
going to do it
again
4746 bringing him to $
6271 that's eight we're going to add in
the interest that I'm taking off of the
11,017 he'll pay approximately
$11 in
interest then he's going to add back in
his living expenses bringing his balance
back up to
9137 in month
nine his income is going to go in again
bringing his balance down to
4391 we have to add some interest so I
took it off of the high balance bringing
him to approximately $84 in interest for
month9 his balance is now at
$4,475
we have to add his expenses in again
bringing him back up to
$724 in month 10 we're going to bring in
his income again of
4746 bringing his balance down to
2494 we're going to add the interest
we'll take it off of the 7240 giving him
approximately $67 in interest let's go
ahead and add in his living expenses
again bringing his balance back up to
5326 in month 11 his income of
4746 is going to go in again bringing
his balance to
$580 right here is where we're going to
pay off his personal loan in full so
we're going to add in the
$6,000 pay of personal
loan that means that this 378 is now
gone the 6,000 is paid in full he's paid
a total of
$26,000 his expenses at
2765 now come
down making his new monthly expenses
2387 now we're going to show his balance
at
$658
6580 being his new balance we're going
to add in his new expenses at
2387 plus the interest which I'm going
to figure the interest off of the 6580
which gives him about $61 in interest
bringing his balance to
$9,250 month 12 his income at
4746 is going to go in again bringing
his balance down to 4
3282 so we've got to add in some
interest so we're going to figure that
again off of the
$928 meaning he'll pay approximately $83
in
interest plus we've got to add his
expenses at 2387 again bringing his
balance back up to
6752 month 13 his income goes in again
bringing his balance down to
$26
do you know what I'm thinking I'm
thinking what you're thinking that wow
he has almost paid this debt off that
was supposed to have taken him 10 years
to pay off right we are at month 13 but
let's finish so I'm going to figure the
interest off of the high balance meaning
he'll pay approximately $62 in interest
plus his expenses
2387 bringing him to a balance of
4455 what happens in month 14 what
happens in month 14 what happens in
month
14 right the income of
4455 is all that is needed for month 14
now he is at a zero balance he will now
only pay his
2387 in expenses plus interest of about
$41 approximately this is it guys this
is it so so he has paid off all of his
debt in 14
months 14 months and about $41 in
interest left and now he is just back to
paying his monthly living expenses when
we went over his
scenario he was so relieved to know that
this 10-year loan that he was in where
he just had to have his teeth
repaired is going to be paid off in 14
months he was one happy camper and I am
so happy for him I am so happy for all
of you guys that call me you run through
these scenarios with me you get excited
when you see that you're not stuck in
debt forever you're not 75 stuck with
all of this debt wondering how you're
going to pay it off in 10 years the joy
that I hear in your voices brings
absolute joy to me it's not magic it is
just math we were just not taught how to
use the tools that are at the bank for
our use I want you to learn this I want
you to take control of your finances
today tweak them just a little bit just
like he did all he did was transfer
these loans into a line using his incom
and cash flow to completely knock that
out I'm happy for him and I know that
you are too thank you so much for
joining me today if you have any
questions or comments please feel free
to leave them below I have services at V
fantastic finances.com if you do need me
but the videos teach you everything you
need to know so you don't need to pay
any Guru for their information you've
got the information take it and run with
it I want to see everyone in financial
peace and I know you can do it I know
you can and I am so excited to hear your
stories I hope you guys have a terrific
week I pray for each one of you every
day and I am praying that you get this
concept as Concrete in your mind change
that old mindset and get on to a great
and better life because guess what today
is the first day of the rest of your
life and I want you to have the best
life ever thank you again and I will see
you in the next
video
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