Homeschool Math: Steps to Get out of Debt
If you're a busy family trying to make ends meet, you've probably struggled with debt at one time or another. A plan to get out of debt makes a excellent homeschool math lesson for your kids. Don't hide the struggle from them, but don't frighten them with all of the gory details either. If you need to get out of debt, you need a plan. The steps to get out of debt look different for everyone. Everyone has different debt, different income, and a different set of life issues. Talk about a family budget with your kids and then follow the steps below to get out of debt. Everyone working together toward the same goal is the first step on your debt free journey.
Debt to Income Ratio Calculator
You may want to take the steps to get out of debt if you are in the market for a new home. In this case, you'll want to start with a debt to income ratio calculator. Seeing it all laid out before you eyes puts it all in perspective. Where can you save, how can you improve your credit score, and how much money you will need to save. These questions can be overwhelming because the often contradict each other. To buy a new house, you'll want to pay down your debt, but you'll also want to save for a down payment for your home. Which should you do first? How long will it all take? This makes for a relevant and useful homeschool MATH LESSON. Wells Fargo offers instructions on how to figure your debt to income ratio and a free debt to income ratio calculator to check your work. Here's another debt free calculator from CNN.
Start with a credit app like Credit Karma. These aren't completely accurate, but they give you good idea of where you stand in the world of credit scores. You'll also see any negative marks against you. The big credit reporting agencies, Experian, TransUnion, and Equifax, allow you to check your scores and dispute anything that you find in error. Sometimes, you might find duplicates or items assigned to you that really belong to someone else. In this case, you'll want to speak to a legal firm that can quickly help you sort it all out. You can do it yourself, but it's much easier to pay for a service to do it for you. Lexington Law is inexpensive and gets the job done quickly and efficiently. You'll want to give yourself at least 3 months of the service (depending on how much work needs done.) They tend to work on one credit reporting agency at a time. It's fun and rewarding to watch your credit score improve. You'll also see weekly dips that will let you know where you need to cut back or do better.
Another option is debt consolidation. This is a great option for people who are overwhelmed by debt collectors calling, sending letters, and generally harassing you for payments. This can make anyone crazy. If you use a service to consolidate your debt, they'll set up a monthly payment and take care of notifying debtors and paying your debts each month. Many people feel overwhelmed at the amount of bills they have to pay and can't keep on top of it all without getting late fees. Rather than paying the debt collectors, some people put their head in the sand and do nothing. This, of course, ruins your credit and your chance for a car or a home in you future. So, if you have difficulty keeping organized letting the professionals deal with your debtors may be the best option for you. You also might want to check into these debt relief services.
It's better to come up with a long term plan that you can manage than to declare bankruptcy or ignore your obligations. A budget is a great way to stay on top of things. Teaching your kids how you budget the bills is a fun way to teach them about finances. Young adults are often surprised at the cost of utilities and groceries and don't plan for these things when they go to rent or buy a new home. Keep a worksheet of your weekly and monthly expenses on the fridge and let your kids see how that new video games fits into the bigger picture. Get a free printable household budget worksheet pdf.
You can open a child's bank account and connect it to your own. Our bank, sent the kids their own ATM cards for their accounts. I can easily move money from my account to theirs or vice versa if they've earned enough to buy the latest video game. If you aren't comfortable with that, there's nothing like a good old fashioned piggy bank or giant glass bottle to see your pennies adding up while saving for that big item.
So, make it a family affair. There's no better homeschool math lesson than the life lessons based on real life events. The more kids know about the real world, the better they will be able to navigate it as young adults.