Paying off $30k in debt made EASY with the right tools. Velocity Banking = Financial Peace

Summary

In 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

00:00

📈 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.

05:03

📊 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.

10:03

🚀 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.

15:06

🌟 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.

Keywords

💡Velocity Banking

Velocity Banking is a financial strategy that involves using a line of credit to pay off debt more quickly, by leveraging cash flow to reduce interest charges. In the video, Christy van explains how this method allows an elderly client to manage his debt more effectively, especially by using his available line of credit to pay off a personal loan faster than the original 10-year term.

💡Line of Credit

A line of credit is a flexible loan from a bank that allows the borrower to draw up to a certain limit as needed. In the video, the elderly client has a $15,000 line of credit with a zero balance, which Christy suggests he use to pay off his existing debts. The line of credit helps reduce his monthly expenses by consolidating higher-interest debt into one manageable account.

💡Cash Flow

Cash flow refers to the amount of money available after all monthly expenses are covered. It plays a crucial role in the Velocity Banking strategy. In the video, the client has $1,281 in positive cash flow, which Christy emphasizes as key to reducing his debt faster by applying this excess money toward paying down the balance on the line of credit.

💡Personal Loan

A personal loan is a type of unsecured loan with a fixed interest rate and repayment period. The elderly client in the video has a $26,000 personal loan with a 10-year term and an interest rate of 11.99%. Christy helps him plan to pay it off much sooner by using his line of credit and cash flow to eliminate the interest burden.

💡Interest Rate

The interest rate is the percentage charged on a loan or line of credit, which adds to the total amount to be repaid. In the video, the client faces varying interest rates, including 11% on his line of credit and 11.99% on his personal loan. Christy explains how minimizing interest payments by reducing the loan balance quickly will save him money in the long run.

💡Monthly Expenses

Monthly expenses refer to the regular costs the client incurs, such as rent, food, and utilities. In the video, the client has monthly expenses of $3,465, which include the debt payments he's struggling with. Christy helps him reduce these expenses by eliminating the personal loan and consolidating payments, allowing him to free up more of his income.

💡Debt Management

Debt management involves strategies to handle and reduce outstanding debt. The video showcases how the elderly client, who feels overwhelmed by his $30,000+ debt, is guided through a debt management plan using Velocity Banking. Christy helps him restructure his debts, lower monthly payments, and ultimately pay off his loans in 14 months rather than 10 years.

💡Income

Income is the total amount of money earned by the client each month. In this case, the elderly client has an income of $4,746 per month. Christy uses his income as a tool in the Velocity Banking strategy, advising him to direct all of it into the line of credit to reduce the balance and lower interest charges.

💡Dental Expenses

Dental expenses are the costs related to the client's necessary dental procedures, which contributed significantly to his debt. In the video, the client incurred a $4,050 bill just for anesthesiology, pushing him into debt. Christy addresses this specific expense in the broader context of managing his overall financial situation.

💡Debt Consolidation

Debt consolidation is the process of combining multiple debts into a single loan or line of credit to simplify payments and potentially reduce interest rates. In the video, Christy suggests the client use his line of credit to consolidate his personal loan and other debts, making it easier to manage and pay down his overall balance.

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