Graham Stephan discusses the alarming level of personal debt among Americans and offers a 7-step guide to paying it off. He emphasizes understanding your debt, tracking spending, categorizing needs vs. wants, cutting unnecessary expenses, considering debt consolidation, choosing a repayment strategy (snowball or avalanche), and if needed, increasing income. He advocates for consistent effort and prioritization of debt repayment to achieve financial freedom.
Here are the key facts extracted from the text:
1. The average American is $38,000 in personal debt.
2. The average revolving credit card balance is over $6,700.
3. 70% of people who took out student loans graduate with an average debt balance of $29,800.
4. Mint.com is a recommended resource for tracking spending.
5. Personal Capital is a recommended resource for tracking spending and is more comprehensive than Mint.com.
6. You Need a Budget (YNAB) is a recommended software for tracking spending and budgeting.
7. YNAB requires a $7 monthly fee after the free trial.
8. Debt consolidation can lower interest rates and save money.
9. Balance transfers to a zero-interest credit card can save money on interest.
10. Personal loans can have lower interest rates than credit cards.
11. The Snowball Method involves paying off smallest balances first.
12. The Avalanche Method involves paying off debts with the highest interest rates first.
13. The Vertex Debt Calculator can help determine the best method for paying off debt.