Perfect Storm for Debt

Show Notes

Perfect Storm for Debt With Neile Simon

A perfect storm may be coming that could make this Christmas shopping season difficult for folks with student loan debt. Neile Simon joins us today with the details today on Faith and Finance.

Neile Simon is a Certified Credit Counselor with Christian Credit Counselors, an underwriter of this program. Neile has been following events that affect consumer debt and she’s here today with another report.

CONSUMER DEBT AND ITS IMPACTS:

Neely explains the resumption of student loan payments in October after a three-year forbearance, highlighting the collective federal student loan debt at 1.7 trillion affecting 14 million Americans.

Monthly payments averaging $503 are expected due to inflation, contributing to a monthly outflow of seven to eight billion dollars towards student loan debt.

INFLATION AND CONSUMER SPENDING:

Despite a high annual inflation rate of 8.5%, consumer spending has increased by 4.9% compared to last year.

Neely emphasizes the trend of people living beyond their means, increasingly relying on credit cards, with average credit card interest rates now at 20.24%.

ADVICE FOR THE CHRISTMAS SHOPPING SEASON:

Neely advises against falling for retail discount offers through opening new accounts.

She recommends preparing a Christmas budget using the envelope system to control spending.

For gift-giving, Neely suggests setting spending limits, opting for gift cards, or making inexpensive gifts while managing budgets for decorations and holiday food.

ADDRESSING CREDIT CARD DEBT:

Christian Credit Counselors offer a debt management program to reduce payments and interest rates, aiming to clear debt 80% faster.

Neely underscores the importance of the program in settling debts in full and mentions a free consultation service to educate consumers on their options.

She reflects on Proverbs 3:27, emphasizing the organization's commitment to aiding individuals towards financial freedom.
 

On today’s program, Rob also answers listener questions: 

• I'm trying to pay off my house at age 45 and considering taking a loan from my 401(k) to do so; is this a good strategy?
• With an upcoming move, I'm wondering whether to buy a new home with cash from selling my current home and a car accident settlement, or take a small mortgage and invest the settlement money.
• My 19-year-old daughter has no credit; how can I help her build credit, and is adding her as an authorized user on my credit card a good idea?
• Recently divorced after 44 years with a sizable settlement, should I buy a home, pay rent, or invest, considering I only have Social Security income?
• I have a daughter in college without any credit history; should I add her to one of my credit cards as an authorized user to help her build credit?

RESOURCES MENTIONED:

• Christian Credit Counselors
• Find a Certified Kingdom Advisor 
• NerdWallet

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