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Controlling Debt

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Most everyone now has to manage a monthly budget. Wages and income are not increasing for most people and the cost of living continues to go up. If a family has ongoing debts such as a mortgage or loan payments, there needs to be a way to save money on theses debts if possible.

There is an internet financial program that was developed by the Utah State University Cooperative Extension called Power Pay. This program is free to use and you can go online and find it under powerpay.org. You can do a monthly budget on this site and it will tell you what percentage that you are spending on housing, transportation and other household expenses. There are calculators that can help you compart mortgage loans or car loans. The most important calculator will help you determine when a loan will be paid off if you add an additional payment or payments.

More and more people are trying to get out of debt and pay off their mortgage sooner rather than later. As a general rule, the longer the term of the loan will determine the greater savings for paying extra payments. For instance, paying an extra mortgage payment per year will reduce years off of the end of the mortgage loan. If your loan permits extra payments, all that you have to do is take one payment and divide that number by 12. Take that amount and add it to your monthly payment principal. This will yield one extra payment per year. Check with your loan provider and see if they have any penalties for pre-payment. You can use the power pay calculator to see just how much you will save and how early the loan will be paid off.

You can also use this web-site to determine savings. Just think how much money we can have if we pay off our debts early and commit that money to a savings or retirement account. One of the most underrated sources of financial information is your local banker. Banks and Credit Unions have financial products that everyone can use and most of these products are insured by FDIC. As a general rule, the older the age of the investor, the lesser amount of risk that they should assume because they do not have as many years to recover from a bad investment. This is where your banker can really come in and help you develop a safe savings strategy.