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Financial Cleanup: Spring cleaning should include finances

In our last two articles we discussed budgeting and saving money.

One item that can affect our ability to budget and save money is our use of credit. Many financial experts state the average credit card debt for Americans is a little over $10,000. One of the problems with credit card companies is that they allow for a small minimum payment, which entices us to extend repayment of the debt.

When using the average annual percentage rate as stated by, of 14.49 percent, and applying a minimum monthly payment of 2 percent, which is $200, it would take you 31 years to pay off a $10,000 credit card (with the assumption no new charges are made to the account, and you would pay $14,256 in interest charges. But if you add an additional $25 dollars to the minimum monthly payment you would pay off the credit card in 5 years and have $4,422 in interest charges. An extra $25 each month trims off 26 years and $9,834 of interest charges!

The use of credit is not bad. It's our reasoning behind the use of credit that can get us into trouble. In class we emphasize the need to live within our monthly income. When we start living outside our income the financial crazy cycle begins which creates financial stress and anxiety. This in return creates stress in marriages, parenting and work environments. These stressors can be compounded by loss of employment, illness, death and divorce, just to name a few.

One of the greatest financial strains is when a family is facing possible foreclosure of their home. If you are currently past due on your mortgage loan or if you foresee that you will not be able to make your next mortgage payment, we highly recommend that you call us at HAPA. We are the agency designated to provide Pre Foreclosure Counseling for Hubbard and Becker County. These services are offered to you at no charge and we can help you understand possible options and also help you communicate with your lender.

In closing, here are just a few tips for improving your debt situation:

Start by having a conversation with your family. Let them know that your goal is to reduce debt which might mean less money for recreation and material goods. Remember, not everyone in the family may be on board with this, but keep in mind that moving your family towards financial stability is the right thing to do.

Stop taking on new debt.

Create a simple budget that allows you to pay debts on time and includes additional payments to reduce debt quicker. Go to for a great visual tool in reducing debt quicker.

Continue to put money in savings. You are bound to have future emergencies. By having money in savings you are more likely to be able to cover the crisis without taking on new debt.

For more information and updated financial resources visit our website at

Tina Peterson is the Executive Director of HAPA (Human Achievement & Performance Academy), a non profit organization. HAPA provides financial counseling and education to adults and life skills education to youth. To learn more call 237-4114.