Assignment 6 Credit Crush

Dave Ramsey and The Credit Crush Assignment Video

Remember Billy and Sally?

Let’s spend a few minutes recalling their stories.

Last week – Part One: You Spent some time Researching Your Financial Future:

In order to get full credit in that assignment, you needed to research the following information:

• Your Annual Income AFTER you graduate

• Based on your major

• Based on your industry

• What is the average % of one’s income spent on Housing costs?

• What are the basic categories needed in every household budget?

• What are the average costs for each budget category?

  • Housing

  • Food

  • Utilities

  • Clothes

  • Taxes

  • Phone

  • Insurance

  • Maintenance

  • What are you missing?

    ---

    Remeber to Update your Detailed Expenses (20 Point Deduction)

  

Capstone Next Steps

Last week, you were asked to assume you already graduated and you are earning whatever amount you hope to be earning once you’ve landed your dream job.

Your Income

• What is the average income for your major?

• What income are you using for your plan?

• What % of your income are you using for your mortgage in this assignment?

You Made 3 Big Purchases for This Week’s Assignment:

1. Bought your dream house

2. Bought that car you always wanted

3. Racked up some serious debt on your New Credit Card

You Took Out a Mortgage on Your New Home

• What % of your income did you havel go toward your Mortgage?

• You were supposed to buy the biggest house you could afford.

• You may have bought the smallest, cheapest house you could find if you wanted fewer points on last week’s assignment.

• You should have updated your plan with Your Mortgage Information

  • Total Purchase Price of your Home

  • How Many Years for your mortgage

    • 30 years

    • 15 years

You should have commented about

Your New Home, and Mortgage

• Why did you choose your house

• How did you come up with that mortgage payment

• What Interest Rate are you using on your mortgage?

• How many years is your mortgage?

You should have commented about

Your New Ride

• Why did you choose that car?

• How did you come up with that financing?

• What is the interest rate on your car loan?

You should have commented about

Your Credit Card

• What is the balance on your “pretend” credit card for this week’s assignment — I’m looking for anywhere from $5k to $25k for most students

• How did you come up with that interest rate? (I’m looking for any where from 12% — 30%)

4 Screenshots should have been Included from Your Planning Portal

These 4 Screenshots should have been Included from Your Planning Portal

• Income

• Mortgage Loan

• Car Loan

• Credit Card Account

This Week’s Assignment: Credit Crush

Rewrite Your Article

I don’t care how many words, but do include a title, screen shot of week 6 quiz, and your comments addressing each element above.

Now that you’ve had more time to reflect on your life after you moved out on your own, invested in your dream house, purchased your cool ride, and racked up some credit card debt, its time to learn a few debt payment strategies to help you move toward your goal of becoming a millionaire by age 50.

 

Tell me what you learned this week about Debt Payment Strategies and which one you found to be most effective for you:

• Same Priority for All Debt

• Highest to Lowest Interest Rate

• Lowest to Highest Balance

The Big Idea

The Credit Crush Assignment is all about understanding the cost of credit and how to apply simple strategies to eliminate debt so that you can build wealth. In this week’s assignment, you’ll be working with the 3 big purchases you made last week:

1. Your Dream Home

2. Your Dream Car

3. Your Credit Card Spending Spree

Desired Outcomes

• Understant the 3 Simple Strategies for Debt Management

• Eliminate Debt/Become 100% Debt Free

• Build Wealth by Investing Instead of Paying Interest

Step One — Review Your Data Cards and Update if needed!

• Mortgage

  • Loan Type = Mortgage

  • Original Amount of Loan

  • Monthly Payment

  • Balance

  • Interest Rate

  • Loan Term — 15 or 30 Year

• Car Loan

  • Loan Name = Type of Car

  • Loan Type = Car Loan

  • Monthly Payment

  • Balance

  • Interest Rate

• Credit Card

  • Account Name

  • Balance (at least $10k)

  • APR — Annual % Rate (at least 10%)

  • Student Loan (optional)

Step Two — Take BEFORE ScreenShots of Your Data Cards

If your data cards were correctly completed from last week’s assignment, just pop those images into this week’s article. If you made updates to your data cards, be sure to create a new, updated screenshot of your data cards:

• Mortgage

• Car Loan

• Credit Card

• Student Loan (optional)

Step Three Review Debt Management

Before You Apply Any Action Items, review the following elements in the Debt Management section of your plan. You’ll need to grab a “BEFORE” screenshot of these elements.

• Strategy

  • Balance of selected debt — grab a screenshot

  • Payment

  • Proposed payments for next month — grab a screenshot

  • Details — Before (Annual works better than Monthly)

Remember to Grab a “Before” Screenshot of each of your Data Cards which you will compare with the “After” Screenshots.

BEFORE

AFTER – This is the most important Screenshot

Mortgage

Don’t forget — grab a screenshot!

Car Loan

Don’t forget — grab a screenshot!

Credit Card

Don’t forget — grab a screenshot!

Student Loan (Optional)

Don’t forget — grab a screenshot!

Step Four — Review Action Items

• Proposed payment strategy

• Current total monthly payment

• Proposed total monthly payment

These are the same because you have not yet applied any payment strategies.

Payment Priority Options

• Same Priority for All Debt

• Highest to Lowest Interest Rate

• Lowest to Highest Balance

Step Five — Time to Crush Your Credit!

• Change Payment Priority

Select the best strategy for your plan and explain why you chose it and provide a brief discussion comparing each of the above payment priority options.

Compare Before and After

• Mortgage

  • Don’t forget — grab an AFTER screenshot!

• Car Loan

  • Don’t forget — grab an AFTER screenshot!

• Credit Card

  • Don’t forget — grab an AFTER screenshot!

• Student Loan (Optional)

  • Don’t forget — grab an AFTER screenshot!

Step Six — Tell Me What You See

• Mortgage

• Car Loan

• Credit Card

• Student Loan (optional)

• Overall Results

• Total savings of How Much $$$

• Debt Free in ?? Months Sooner

Final Steps

— Add Assignment 6 Quiz Screenshot

— Add Assignment 6 Class Collaboration [Comment] Screenshot

Post your brief comments about what you learned this week about:

Payment Priority Options

• Same Priority for All Debt

• Highest to Lowest Interest Rate

• Lowest to Highest Balance

You can post in Money Study Group, on FB, or in YouTube — just grab a screenshot and include in your assignment.

Submit Only One PDF File to Canvas