Mike & Sarah are a young family who recently purchased their first home. They also each had a considerable amount of student loan debt from attending college together. Along with their mortgage and student loan debt, they had a car loan and two credit cards containing a balance that they found difficult to pay off each month. By not paying off the balance each month, they were paying high interest to their lenders that they could be adding to their savings.
Big picture, Mike and Sarah were going to be making debt payments for at least 29 years. Paying this amount of debt for 29 years would reduce their ability to efficiently save for their kid’s college education along with their retirement.
After meeting with Merrimack Wealth Management and implementing Your Family Bank with a goal to pay off their debt quicker, Mike and Sarah were able to pay off all of their consumer debt (credit cards and auto loan) in less than 2 years.
They were then able to save and redirect the credit card payments including interest powering down their student loan debt. Mike and Sarah were able to pay off their student loans in a third of the time. Sarah’s would have taken 8 and a half years to pay off, she paid them off in just over 2. Mike’s alone were going to take 22 years to pay them off. He paid them off completely in 5 years.
What was more important is that while they worked to pay off all consumer and student loan debt, they were setting themselves up to pay off their mortgage sooner. They found that they would be mortgage free in 15 years vs. their scheduled 29 years or payments.
Rather than just consolidating their debt, Mike and Sarah ELIMINATED their debt and were able to put over $5,500 back into their budget each month for emergencies, college and retirement savings.